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7 Powers: The Foundations of Business Strategy Kindle Edition

4.5 out of 5 stars 1,003 ratings

What are the secrets to making a company enduringly valuable?

7 Powers breaks fresh ground by constructing a comprehensive strategy toolset that is easy for you to learn, communicate and quickly apply.
Drawing on his decades of experience as a business strategy advisor, active equity investor and Stanford University teacher, Hamilton Helmer develops from first principles a practical theory of Strategy rooted in the notion of Power, those conditions which create the potential for persistent differential returns.

Using rich real-world examples, Helmer rigorously characterizes exactly what your business must achieve to create Power. And create Power it must, for without it your business is at risk. He explains why invention always comes first and then develops the Power Progression to enable you to target when your Power must be established: in the Origination, Take-Off or Stability phases of your business.

Every business faces a do-or-die strategy moment: a crux directional choice made amidst swirling uncertainty. To get this right you need at your fingertips a real-time strategy compass to discern your true north. 7 Powers is that compass.
Due to its large file size, this book may take longer to download

Editorial Reviews

Review

"Hamilton Helmer is the best kind of big thinker - he offers great insights that you can turn into real world action. At Spotify the 7 Powers are widely used as we discuss new initiatives. His distillation of the key types of strategic power, how to find them, how to leverage them, and how to maintain them is a fantastic toolset forcompanies at every stage" - Daniel Ek, CEO and Founder of Spotify

"The forces of competition are just incredibly strong. Everyone is trying to eat your lunch, and if you don't read 7 Powers you're going to die alot sooner" -
Reed Hastings, CEO and Co-Founder of Netflix
"7 Powers lays out a clear, compelling and insightful framework forthinking about the persistent sources of competitive advantage. Helmerdraws on three decades of experience to break down how companiesestablish power and shape their industries, illustrating at every turnwith entertaining and illuminating examples" -
Jonathan Levin, Philip H Knight Dean, Stanford Graduate School of Business

"Hamilton Helmer understands that strategy starts with invention. He can't tellyou what to invent, but he can and does show what it takes for a newinvention to become a valuable business" -
Peter Thiel, entrepreneur and investor

"7 Powers provides vital guidance for any business person developingstrategy. I have known Hamilton for over a decade since his time as astrategy advisor to Adobe, and I am delighted that he is now sharing his original and compelling business insights" -
Bruce Chizen, former CEO of Adobe

"Hamilton is a deep thinker who makes a compelling connection between passion and good business. His ideas are well thought out, wise, and oftenchallenging. I always look forward to what he has to say" -
Pete Docter, Pixar director and two-time Academy Award winner for Up and Inside Out

"Making a small number of decisions wisely is far more important than making alot of decisions correctly. Hamilton Helmer explains exactly how theleaders of the world's most successful businesses get that small numberjust right" -
Mike Moritz, Chairman of Sequoia Capital

"Correctly places enormous value on execution and on culture. However, I thinkthis sometimes leads to insufficient importance being placed onstrategy. Hamilton Helmer's deeply incisive work will hopefully helpcorrect that" -
Patrick Collison, CEO and Co-Founder of Stripe Silicon Valley

"7 Powers is a highly innovative approach to understanding some of the key underlying drivers of company value and capturing ideas that certainlyare not very well understood in the markets. And the result has been one of the most exceptional and sustained alpha records I've ever seen" -
Blake Grossman, former CEO of Barclays Global Investors

"This book is a must-read for anyone starting or growing a business. It laysout an elegant and insightful framework that really helped inspire mythinking about building and maintaining strategic advantage in acompetitive landscape" -
Daphne Koller, President and Co-Founder of Coursera

"A startup must have a compelling way of getting traction to beinvestable. Otherwise, it's simply a bleeding hole that burns throughmoney. 7 Powers rigorously lays out the strategies for a company to getthis traction and details what it takes to get there. Anyone starting abusiness should read it" -
Sean O' Sullivan, Founder and Managing Partner, SOSV

"A master in the discipline of strategy, Hamilton has condensed 40 yearsof thought and practice into a single readable book. Read it and to your benefit you will see the 7 Powers everywhere you look"
- Mark Baumgartner, Chief Investment Officer, Institute for Advanced Study

"Mentor has benefited from a continuing consulting relationship with Hamiltonfor the better part of 20 years and has incorporated many of his ideasand principles into the core of our strategy. 7 Powersconsolidates those ideas and principles into a powerful framework andvocabulary to describe and permit analysis of where a company stands inits competitive space. It's a powerful work" -
Greg Hinckley, President, Mentor Graphic Corporation

Product details

  • ASIN ‏ : ‎ B01MRLFFQ7
  • Publisher ‏ : ‎ Deep Strategy LLC
  • Accessibility ‏ : ‎ Learn more
  • Publication date ‏ : ‎ November 16, 2016
  • Language ‏ : ‎ English
  • File size ‏ : ‎ 11.1 MB
  • Screen Reader ‏ : ‎ Supported
  • Enhanced typesetting ‏ : ‎ Enabled
  • X-Ray ‏ : ‎ Enabled
  • Word Wise ‏ : ‎ Enabled
  • Print length ‏ : ‎ 263 pages
  • ISBN-13 ‏ : ‎ 978-0998116327
  • Page Flip ‏ : ‎ Enabled
  • Grade level ‏ : ‎ 12 and up
  • Customer Reviews:
    4.5 out of 5 stars 1,003 ratings

About the author

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Hamilton Helmer
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Mr. Helmer is the Co-Founder and Chief Investment Officer of Strategy Capital. He has spent his career as a practicing business strategist: advising companies, investing based on strategy insights and teaching strategy. At Helmer & Associates (later Deep Strategy), a consulting firm he founded, he led over 200 strategy projects with major clients such as Adobe Systems, Agilent Technologies, Coursera, Hewlett-Packard, John Hancock Mutual Life, Mentor Graphics, Netflix, Raychem, and Spotify. With the Strategy Capital team, he continues to advise the founders of companies such as Brex, Scale AI, Lyft, Convoy, Insitro and Ginkgo Bioworks. In the last three decades he has also utilized his strategy concepts as a public equity investor, first with proprietary accounts and more recently with Strategy Capital. Prior to Helmer & Associates he was employed at Bain & Company. He holds a Ph.D. in Economics from Yale University and is a Phi Beta Kappa graduate of Williams College. Mr. Helmer taught Business Strategy in the Economics Department of Stanford University for a decade until 2018.

Customer reviews

4.5 out of 5 stars
1,003 global ratings

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Customers say

Customers find the book provides a pragmatic approach to understanding business strategy and serves as a useful framework for analysis. They appreciate its readability, with one customer noting it delivers key points in less than 200 pages.

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37 customers mention "Exposition"33 positive4 negative

Customers find the book provides a pragmatic approach to understanding business strategy and offers a useful framework for analysis, with strong insights throughout.

"The book contains valuable information about several strategic advantages for businesses along with examples of how they work...." Read more

"...That said, there are strong insights here. Overall, glad to have read it, not however the thing that I will use every day." Read more

"great book on strategy and highly recommend" Read more

"...The book lays out the fundamentals of business strategy and examines the root source of strategic power for any company...." Read more

27 customers mention "Readability"20 positive7 negative

Customers find the book easy to read and consider it one of the best business books, with one customer noting it delivers key points in less than 200 pages.

"...This book is a must read. I strongly recommend it!" Read more

"...say it is more than just a gem - this is one of the very best business and strategy books written in the past 30 years, up there with Innovator's..." Read more

"...which might feel academic to the more practical reader, but the book is valuable even if you choose to skip that section...." Read more

"...However, it's an unpleasant read...." Read more

Must read strategy book for every founder and investor today!
5 out of 5 stars
Must read strategy book for every founder and investor today!
“Any strategy framework, to be broadly useful to a businessperson, must address all the key strategy issues facing an organization. Hamilton has long been been aware of the deficiencies in existing frameworks. His solution? To forge ahead with entirely novel conceptual advances, and then to bind these together into a united whole.” This is what Reed Hastings, CEO and co-founder of Netflix, writes in the book introduction! The book is an absolute must read if you are a founder building a business or a long-term investor and betting on the durable long-term competitive strengths of the business. Hamilton Helmer, the author, defines the meaning of strategy and power: Strategy: The study of the fundamental determinants of potential business value Power: The set of conditions creating the potential for persistent differential returns and then goes to show that a business derives its Potential Value = [Market Scale] * [Power]. Hamilton lays out the seven sources of Powers for a business, all from first principles, and illustrates these with very good examples from the real world. The seven powers: Scale economics, Network economics, counter-positioning, switching costs, branding, cornered resource, process power. My favorite power is the one called “Counter-Positioning”. I have read all the popular strategy books and I don’t think I have come across this concept as clearly articulated in any other book. He defines Counter-Positioning as follows: “A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.” Here is what Reed Hastings says about Counter-Positioning in the book’s introduction. “Throughout my career I have often observed power incumbents, once lauded for their business acumen, failing to adjust to a new competitive reality. The result is always a stunning fall from grace. A superficial thinker might pin this on lack of vision and leadership. Not Hamilton. By inventing the concept of Counter-Positioning, he was able to peel back the layers into the deeper reality of these situations. Rather than lacking vision, Hamilton established, these incumbents are in fact acting in an entirely predictable and economically rational way. Our earlier battle with Blockbuster bore out this notion” Hamilton is not only an author and an academic. He was also an early investor in Netflix and had tremendous impact on the strategy at Netflix and many other organizations. This book is a must read. I strongly recommend it!
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Top reviews from the United States

  • Reviewed in the United States on December 2, 2019
    Format: PaperbackVerified Purchase
    “Any strategy framework, to be broadly useful to a businessperson, must address all the key strategy issues facing an organization. Hamilton has long been been aware of the deficiencies in existing frameworks. His solution? To forge ahead with entirely novel conceptual advances, and then to bind these together into a united whole.” This is what Reed Hastings, CEO and co-founder of Netflix, writes in the book introduction!

    The book is an absolute must read if you are a founder building a business or a long-term investor and betting on the durable long-term competitive strengths of the business. Hamilton Helmer, the author, defines the meaning of strategy and power:

    Strategy: The study of the fundamental determinants of potential business value
    Power: The set of conditions creating the potential for persistent differential returns

    and then goes to show that a business derives its Potential Value = [Market Scale] * [Power]. Hamilton lays out the seven sources of Powers for a business, all from first principles, and illustrates these with very good examples from the real world. The seven powers: Scale economics, Network economics, counter-positioning, switching costs, branding, cornered resource, process power.

    My favorite power is the one called “Counter-Positioning”. I have read all the popular strategy books and I don’t think I have come across this concept as clearly articulated in any other book. He defines Counter-Positioning as follows: “A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.”

    Here is what Reed Hastings says about Counter-Positioning in the book’s introduction. “Throughout my career I have often observed power incumbents, once lauded for their business acumen, failing to adjust to a new competitive reality. The result is always a stunning fall from grace. A superficial thinker might pin this on lack of vision and leadership. Not Hamilton. By inventing the concept of Counter-Positioning, he was able to peel back the layers into the deeper reality of these situations. Rather than lacking vision, Hamilton established, these incumbents are in fact acting in an entirely predictable and economically rational way. Our earlier battle with Blockbuster bore out this notion”

    Hamilton is not only an author and an academic. He was also an early investor in Netflix and had tremendous impact on the strategy at Netflix and many other organizations. This book is a must read. I strongly recommend it!
    Customer image
    5.0 out of 5 stars
    Must read strategy book for every founder and investor today!

    Reviewed in the United States on December 2, 2019
    “Any strategy framework, to be broadly useful to a businessperson, must address all the key strategy issues facing an organization. Hamilton has long been been aware of the deficiencies in existing frameworks. His solution? To forge ahead with entirely novel conceptual advances, and then to bind these together into a united whole.” This is what Reed Hastings, CEO and co-founder of Netflix, writes in the book introduction!

    The book is an absolute must read if you are a founder building a business or a long-term investor and betting on the durable long-term competitive strengths of the business. Hamilton Helmer, the author, defines the meaning of strategy and power:

    Strategy: The study of the fundamental determinants of potential business value
    Power: The set of conditions creating the potential for persistent differential returns

    and then goes to show that a business derives its Potential Value = [Market Scale] * [Power]. Hamilton lays out the seven sources of Powers for a business, all from first principles, and illustrates these with very good examples from the real world. The seven powers: Scale economics, Network economics, counter-positioning, switching costs, branding, cornered resource, process power.

    My favorite power is the one called “Counter-Positioning”. I have read all the popular strategy books and I don’t think I have come across this concept as clearly articulated in any other book. He defines Counter-Positioning as follows: “A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.”

    Here is what Reed Hastings says about Counter-Positioning in the book’s introduction. “Throughout my career I have often observed power incumbents, once lauded for their business acumen, failing to adjust to a new competitive reality. The result is always a stunning fall from grace. A superficial thinker might pin this on lack of vision and leadership. Not Hamilton. By inventing the concept of Counter-Positioning, he was able to peel back the layers into the deeper reality of these situations. Rather than lacking vision, Hamilton established, these incumbents are in fact acting in an entirely predictable and economically rational way. Our earlier battle with Blockbuster bore out this notion”

    Hamilton is not only an author and an academic. He was also an early investor in Netflix and had tremendous impact on the strategy at Netflix and many other organizations. This book is a must read. I strongly recommend it!
    Images in this review
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    10 people found this helpful
    Report
  • Reviewed in the United States on November 14, 2024
    Format: HardcoverVerified Purchase
    I first heard of Helmers from the Acquired Podcast, so I jumped into the book after having read a lot from Greenwald (Competition Demystified), Porter (5 Forces), and others discussing strategy. I really liked how Helmers and his team simplified a framework without giving up the important nuances of what really matters to business's long-term success/growth/defensibility. Id highly recommend people read this book
    2 people found this helpful
    Report
  • Reviewed in the United States on December 16, 2024
    Format: PaperbackVerified Purchase
    Rehashed Porter, which was rehashed basic micro. The juice ain't worth the squeeze.
  • Reviewed in the United States on February 12, 2020
    Format: PaperbackVerified Purchase
    I work as a venture capitalist in Silicon Valley, and first heard about this hidden gem of a book from a fellow VC. Having now read it, I can say it is more than just a gem - this is one of the very best business and strategy books written in the past 30 years, up there with Innovator's Dilemma, Lean Startup and Good to Great. As you can see from the photo, I've covered nearly every page in notes and highlights. In reading it, I found Hamilton providing both:

    1) Incisive theoretical frameworks for dynamics that I'd observed intuitively in my work as an investor and board member for startup companies but couldn't quite put my finger on explaining. E.g., that individual company leaders are not sources of sustained competitive advantage ("cornered resources" in Hamilton's terms) because their services can be bought and sold and thus their value is arbitraged by the market. (Note this applies even to company founders - "superstar" teams will typically raise capital at much higher prices than "unknowns". Very often the price paid by investors for this talent does not adequately compensate for the market risk still faced by the fledgling company.)

    and 2) whole new ways of thinking about the relationship between market opportunities (what most startups and VCs blindly chase), and the potential for sustainable, differentiated value to be built by a single firm within that market opportunity (Hamilton's concept of "Power"). I can't wait to apply these lessons to my own career going forward, and will be recommending Hamilton's ideas to all companies and entrepreneurs I work with from now on!
    Customer image
    5.0 out of 5 stars
    One of the very best business books I've read in my career

    Reviewed in the United States on February 12, 2020
    I work as a venture capitalist in Silicon Valley, and first heard about this hidden gem of a book from a fellow VC. Having now read it, I can say it is more than just a gem - this is one of the very best business and strategy books written in the past 30 years, up there with Innovator's Dilemma, Lean Startup and Good to Great. As you can see from the photo, I've covered nearly every page in notes and highlights. In reading it, I found Hamilton providing both:

    1) Incisive theoretical frameworks for dynamics that I'd observed intuitively in my work as an investor and board member for startup companies but couldn't quite put my finger on explaining. E.g., that individual company leaders are not sources of sustained competitive advantage ("cornered resources" in Hamilton's terms) because their services can be bought and sold and thus their value is arbitraged by the market. (Note this applies even to company founders - "superstar" teams will typically raise capital at much higher prices than "unknowns". Very often the price paid by investors for this talent does not adequately compensate for the market risk still faced by the fledgling company.)

    and 2) whole new ways of thinking about the relationship between market opportunities (what most startups and VCs blindly chase), and the potential for sustainable, differentiated value to be built by a single firm within that market opportunity (Hamilton's concept of "Power"). I can't wait to apply these lessons to my own career going forward, and will be recommending Hamilton's ideas to all companies and entrepreneurs I work with from now on!
    Images in this review
    Customer image
    52 people found this helpful
    Report
  • Reviewed in the United States on September 22, 2024
    Format: KindleVerified Purchase
    This book should be a new mantra in valuing a business. It provides 7 types of “Power” that any business can tap into for superiority
  • Reviewed in the United States on January 17, 2025
    Format: PaperbackVerified Purchase
    The book contains valuable information about several strategic advantages for businesses along with examples of how they work. However, it's an unpleasant read. It would have been just as valuable if written in a much more readable manner by avoiding big words and unnecessary math.
  • Reviewed in the United States on July 7, 2023
    Format: PaperbackVerified Purchase
    This book was the first business strategy book that really resonated with me. I've tried to read Porter but it's just so dense and built on prior knowledge.

    7 Powers requires no existing knowledge to understand the main points.

    The equations seemed unnecessary and almost silly but maybe that's just me. I have a background in maths and yet I feel like the math added to this book would have been better relegated to a different book, it didn't fit and seems almost to play a role of validating the rest of the content with artificial rigor.
    One person found this helpful
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  • Reviewed in the United States on June 2, 2023
    Format: PaperbackVerified Purchase
    Unless you took advanced math, don't bother reading the sections with formulas, there is not much of an attempt to meet the reader where they are. That said, there are strong insights here. Overall, glad to have read it, not however the thing that I will use every day.
    One person found this helpful
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Top reviews from other countries

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  • Mallika
    5.0 out of 5 stars Finally an intersection between Silicon Valley and Value Investors!
    Reviewed in the United Kingdom on January 25, 2021
    Format: PaperbackVerified Purchase
    I read 7 Powers right through in one sitting. I've compartmentalised Silicon Valley go-go-go culture in one area of my brain, and value investors watching paint dry in another areas. This book is the first one that reconciled the two in my head. Strategy/ power/ moat/ barriers are all subtly different and if you're interested in long term cash flows, I encourage you to dive into this book and incorporate these differences into your investing mental models.

    This book will be good for value investors, tech startup founders and corporate execs. That's a rare trio to serve in one book.

    I found the "counterpositioning" power the most compelling in terms of new thinking. The example given is Vanguard vs asset managers. Previously I'd seen asset managers as choosing to charge active management fees, the counterpostioning chapter made me realise they had no choice.

    While tech founders might find a quick read useful, I would encourage professional investors to read it closely and learn the framework Hamilton Helmer has outlined.

    The charts and "math" are very useful as you go deeper into the concepts, but you can easily gain much by sticking to just the text.
    Customer image
    Mallika
    5.0 out of 5 stars
    Finally an intersection between Silicon Valley and Value Investors!

    Reviewed in the United Kingdom on January 25, 2021
    I read 7 Powers right through in one sitting. I've compartmentalised Silicon Valley go-go-go culture in one area of my brain, and value investors watching paint dry in another areas. This book is the first one that reconciled the two in my head. Strategy/ power/ moat/ barriers are all subtly different and if you're interested in long term cash flows, I encourage you to dive into this book and incorporate these differences into your investing mental models.

    This book will be good for value investors, tech startup founders and corporate execs. That's a rare trio to serve in one book.

    I found the "counterpositioning" power the most compelling in terms of new thinking. The example given is Vanguard vs asset managers. Previously I'd seen asset managers as choosing to charge active management fees, the counterpostioning chapter made me realise they had no choice.

    While tech founders might find a quick read useful, I would encourage professional investors to read it closely and learn the framework Hamilton Helmer has outlined.

    The charts and "math" are very useful as you go deeper into the concepts, but you can easily gain much by sticking to just the text.
    Images in this review
    Customer image
  • Cesar
    5.0 out of 5 stars a great look into Strategy
    Reviewed in Spain on May 15, 2024
    Format: KindleVerified Purchase
    The book explores the true value drivers that enable any company to differentiate and return real value in a clear way with well known examples from leading companies.
  • Karla Zárate
    5.0 out of 5 stars Rápida entrega, buen libro en temas de estrategia
    Reviewed in Mexico on October 9, 2019
    Format: PaperbackVerified Purchase
    Entrega a tiempo del libro a pesar de ser envió internacional. El libro es muy interesante para poder planear a futuro en una empresa.
    Report
  • Achal Kagwad
    5.0 out of 5 stars Read this book after reading Micheal Porter!
    Reviewed in India on May 10, 2024
    Format: KindleVerified Purchase
    [book:7 Powers: The Foundations of Business Strategy|32816087]

    Focusses more on how companies build moats/defensibility in their models. It describes with case studies 7 ways(7 Powers) how companies try to ensure they remain winners in their chosen area of competence. Read this book after the reading Michael Porter as Porter offers building blocks in competitive strategy and this book extends it.

    The book at the end explains the concept of "Power Progression" with these 7 Powers which is intuitive to know and have the framework cemented as a layer in your mental model.

    In Brief the 7 Powers listed are:
    1. Cornered Resource
    2. Counter Positioning
    3. Economies of Scale
    4. Network Effects
    5. Switching Costs
    6. Branding
    7. OE-Operational Efficiency-Process Power

    Must read book for Product Managers, Product Marketing Managers, Key Account Managers, Business Owners and Entrepreneurs.
  • Hirad
    5.0 out of 5 stars Makes a simple, powerful promise. Keeps it.
    Reviewed in Canada on May 23, 2020
    Format: KindleVerified Purchase
    This book is short. It makes a promise to deliver a simple and powerful strategy compass for business owners and investors, and it delivers on that promise beautifully and succinctly. There’s a lot of value packed here. It’ll be one of rare business books to reread front to back every few years.

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