Unfair Advantages: How Entrepreneurs Can Use Them to Achieve Business Success
By Dan Fries
The race to business success can often seem daunting, and impossible to swing in one’s favor. It might even look like (from your vantage point) that everyone else is racing ahead by some crazy combination of luck and superior resources. In truth, almost everyone has one or more unfair advantages that they can use to their benefit.
Ultimately, who wins in entrepreneurship is often decided based on who can identify and capitalize on those unfair advantages and who cannot.
Here’s one of the most obvious business lessons that some entrepreneurs don’t learn until years down the road: business is not fair. While there are certain laws that exist to guarantee a relatively even playing field, you can never truly have a purely fair business competition or market environment because of the sheer variety of players and their innate advantages.One of the most obvious business lessons that some entrepreneurs don’t learn until years down the road: business is not fair. Click To Tweet
Does this sound bad? It’s actually not. While some entrepreneurial competitors might have a few advantages over your own enterprises, you, too, have one or more unfair advantages you can leverage to achieve even greater business success.
What is an Unfair Advantage?
An unfair advantage is best understood as a unique advantage, talent, or leg-up that you have working in your corner as you run or start your business. Even better, any unfair advantage is valuable precisely because your competition can’t access it due to one or more factors.
Here are a few examples of unfair advantages:
- You create one of the best machine learning programs in modern history. This is an unfair advantage since even fellow computer science majors may not be quite as intuitively excellent at the subject as you are.
- Your father offers you a startup loan of $10 million. This is an unfair advantage, but it’s also still legal since it’s not cheating in any way.
- You stumble upon a sudden breakthrough in technology through sheer luck and use that to build a digital empire. It was only by luck that you succeeded, but that’s the advantage.
All of these advantages and many others that would take too long to describe can provide serious boosts to a business. If you’re an entrepreneur, identifying and utilizing any unfair advantages is one of the best tactics to grow your business into the future.
Remember: business isn’t fair, and everyone is playing to win.
The MILES framework
But how do you identify what unfair advantages you currently possess if you haven’t reflected on them before? You can follow the so-called “MILES” framework to audit yourself and discover those advantages.
Let’s break down each letter of the acronym one by one:
Money is the first area you should investigate. If you have a nest egg, bundle of cash, or potential loan you can get from a family member, this can be a clear and tangible bonus to your business or startup ambitions. Money isn’t everything for a startup, but it sure does help.
It doesn’t even have to be money you put directly into the business. Save up cash to act as a safety net in case your entrepreneurial enterprise goes under. Just having the possibility of total bankruptcy removed can free up your options for more creative or risky endeavors that could pay off in the long run.
Intelligence and Insight
Intelligence and insight are not necessarily referring to IQ or formal education (although they can play a big role). Instead, intelligence and insight are more relative or contingent on context.
For instance, someone may not do very well in high school, but have a shrewd and intelligent business mind that they can use to create one of the most successful startups of their generation. Insight specifically refers to one’s ability to look at a situation and divine certain instinctual moves, opinions, or ideas that lead to business success. They might see an opportunity for a great website purchase, for example, that leads to big growth.
These two aspects are most often identified by characteristics like creativity, experimentation, and social and emotional intelligence. The last two are particularly important – someone with a good judge of character could have an unfair advantage in that they hire excellent workers every time.
Location and Luck
Location and luck can play a huge role in whether or not your enterprise is successful. Being born with access to some of the earliest computers gave Bill Gates an undeniable advantage before he’d ever dreamed of Microsoft.
Similarly, look at where you live and consider the business advantages that that place might provide. Do you live near Silicon Valley? You can imagine the social benefits that can provide to any software startup.
Luck is a little more intangible, but you’ll know it when you see it. If you end up getting a big break on office space, a loan approval, or anything else, be sure to capitalize on it ASAP.
Education and Expertise
Your education or expertise can also lend you an unfair advantage in some scenarios. A good education is particularly advantageous not necessarily for the raw knowledge but for the social connections it facilitates. There’s a reason why people attend Harvard, and it’s not because of the quality of the classes, it’s because being a part of the Harvard alumni club affords a level of exclusivity and business connections you can’t replicate anywhere else.
Expertise can be acquired both from formal education centers and from any life experience you’ve collected so far. That expertise might bring you a critical insight, give you some industry instinct for your startup, or offer another unfair advantage in some other way.
Lastly, status can be summed up as your perceived ability to add value to customers and clients.
It’s a social benefit, but the more status you acquire, the greater the unfair advantage, and the more easily you’ll be able to acquire things like high-value loans, excellent workers, and so on to help improve your cash flow. Remember, as a golden rule, businesses are worth between two to six times their cash flow. After applying the MILES framework for a six month period, calculate your total cash flow versus where it was six months ago see how far you’ve come along.
How does MILES help you identify and use your unfair advantage?
This is all well and good, but how does the MILES system actually help your business? Here are some more examples:
- Someone’s relative dies and they receive a large inheritance. This money-based unfair advantage will allow them to start their company ahead of schedule
- Someone has excellent emotional intelligence and is able to hire a crack team of chefs to create one of the best restaurants in the world, plus keep them operating well thanks to their inherent leadership skills
- Another entrepreneur is lucky enough to start digital marketing for her father at an early age, which lets them bolster their own business’s creativity
- A banking major goes to Harvard only to then, through a social connection, enter politics
- Someone is born the son of a rich CEO. He lucks into a CFO job, then branches off to start his own, smaller company with the resources afforded by his birth
Use the MILES system to figure out what your unfair advantages are, then leverage those to the best of your ability.
As you can see, each aspect of the MILES system gave the beneficiary unfair advantages that they used to maximize their success. Do your own MILES analysis for your own life, education, and circumstances and see what you can use to accelerate the domination of your industry or niche.