Lenny Rachitsky’s Post

The definitive list of pivots Including how they knew it was time to pivot, how long it took them to pivot, how they found their new idea, and more Don't miss today's post for more: https://lnkd.in/gEY_2bmx

I've got the co-founder of Canva, Cameron Adams, on the podcast this week. What have you always wanted to know about Canva?

Hamilton Helmer is the author of 7 Powers: The Foundations of Business Strategy, which outlines a framework for identifying and developing sustainable competitive advantage. It’s widely considered to be the most important book on business strategy. Folks like Patrick Collison, Reed Hastings, Daniel Ek, and Jeff Lawson credit the book and Hamilton’s teachers for helping them build their companies. In our conversation, we discuss: 🔸 When to start thinking about power 🔸 Which sources of power to prioritize 🔸 The difference between moats and power 🔸 Common misconceptions among companies about the types of power they possess 🔸 How power relates to strategy 🔸 How ICs can leverage insights about power in their work 🔸 AI’s impact on competitive advantages and barriers to entry 🔸 Much more Listen now 👇 - YouTube: https://lnkd.in/gDPA-gC3 - Spotify: https://lnkd.in/g5fBtYKx - Apple: https://lnkd.in/gbf_ujhM Some key takeaways: 1. The 7 sources of power: a. Brand: Your unique brand identity attracts and retains a significant number of customers. b. Process power: You can produce something more efficiently than competitors, and the competitors can’t easily copy the method. c. Cornered resource: You have exclusive access to a vital resource, such as the only rights to a patent. d. Counter-positioning: Your business model/strategy is so counter to that of incumbents that if they copied you, it would hurt their own business. e. Scale economies: You can produce something more cheaply than competitors, on a per-unit basis, because of the scale of your operation. f. Switching costs: Your customers can’t switch to competitors without bearing a significant cost(s). g. Network economies: Your product or service provides more value because of how many other people are already using it. 2. Power requires both a benefit (e.g. lower cost) and a barrier (e.g. switching costs) that prevents others from imitating or neutralizing that advantage. Beware of common delusions, like overestimating the power of branding, data scale effects, or operational excellence. 3. Power is at the heart of any good strategy. It’s something that gives you a material advantage over competitors that is impossible for them to mimic. It requires a benefit and a barrier. As Warren Buffett famously said, “I look for economic castles [benefit] protected by unreachable moats [barrier].” It would be pointless having a moat around an insignificant shack. And it would be pointless having a castle with no moat or protection around it. 4. The first 3 sources of power are rare for tech companies. The company is usually too young to have built sufficient brand love or uniquely efficient processes, and cornered resources are uncommon unless operating in a highly regulated industry.

Love this story from Kayvon Beykpour about meeting Elon right after the acquisition 🤣🤣🤣

New and improved podcast transcripts just went live, courtesy of Substack. Every episode includes high-quality transcripts which you can now expand to be full-screen, easily search for keywords, and click any segment to listen to the audio inline. To find these transcripts, go to any episode page (e.g. https://lnkd.in/gs38r9jR), and click the little hamburger menu above the episode cover art.

One of Annie Duke's top tips for making better decisions: Set "kill criteria" before you launch a project—a set of signals that;; tell you it's time to pivot or stop the project. You can do this as part of a "pre-mortem" meeting, where you think through all the things that could go wrong with the project.

If you're a Senior PM and have wanted to relocate to New Zealand, have I got the opportunity for you 👇

Annie Duke is a decision-making expert, former professional poker player, special partner at First Round Capital, and the author of Thinking in Bets (a national bestseller) and Quit: The Power of Knowing When to Walk Away. She also co-founded Alliance for Decision Education, a nonprofit whose mission is to improve lives by empowering students through decision skills education. In our conversation, Annie shares: 🔸 Her biggest lessons from the late Daniel Kahneman 🔸 How to use pre-mortems and “kill criteria” 🔸 The power of “mental time travel” 🔸 The relationship between money and happiness 🔸 The nominal group technique for better decisions 🔸 How First Round improved their decision-making process using her techniques 🔸 A ton of tactical decision-making frameworks 🔸 Much more Listen now 👇 - YouTube: https://lnkd.in/g3anuten - Spotify: https://lnkd.in/g4u3X2FU - Apple: https://lnkd.in/gNDkaj8f Some key takeaways: 1. Use the “3Ds” framework to make better decisions for your org: a. Discover: Collect individual opinions independently before group discussion and then share these with everybody prior to the meeting. b. Discuss: Compare perspectives within the group, focusing on understanding points of disagreement rather than building consensus. c. Decide: Make decisions independently post-discussion to minimize group influence. 2. Incorporate the word “nevertheless” into discussions, especially when making decisions or addressing disagreements. It acknowledges the other person’s perspective while affirming your decision or stance. 3. Replace confrontational language like “I disagree” or “you’re wrong” with phrases like “I don’t understand” so everyone feels heard and valued. If people feel heard, they are more likely to feel like they contributed to the decision, even when they disagree. 4. Use pre-mortems to set kill criteria. Before starting a project, imagine failure and what early warning signs might have predicted it. Commit in advance to reassess or pivot if you notice those red flags later on. This makes it easier to walk away when sunk costs and overconfidence bias loom large. 5. Know that if you’re considering quitting, it’s likely overdue. Uncertainty, sunk costs, identity, and ownership effects conspire to make us persist with failing efforts longer than we should. We wait for incontrovertible proof to quit. If quitting crosses your mind, examine if you’d start the project today given what you now know.

I’m collaborating with the team at Perplexity on a deep dive into how product managers use Perplexity. We’d love to hear from you. Fill out this short survey if you’re a PM and use Perplexity regularly and they’ll reach out to you for a user interview👇