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Commoncog This Week
This week's Commoncog piece is free; next week's piece will be members-only.
“This One Can Make Money Or Not?” — When you're running a business, it helps to want to make money.
This marks the end of the Asian Conglomerate Series. Over the past year or so, we've been exploring a series of cases on Asian tycoons and the conglomerates they run. The major contribution that we've made is mostly in How to Become an Asian Tycoon. In that essay we laid out the core arc of every first generation tycoon, and then we proposed a way of evaluating skill, given the presence of corruption.
This last piece is about one idea, hiding in plain sight in all the cases we've done.
There is a concept called ‘being commercial’, which is ostensibly from Goldman Sachs. I think a good definition for ‘commercial’ is something like “you want to make money over the long term.”
The two clauses of this definition are equally important:
- “You want to make money …” — you really really want to make money, as opposed to wanting other things.
- “… over the long term” — you believe that making a fair deal with counter-parties will allow you to make more money over the long term, because it puts you in a repeat iteration game.
Almost all the tycoons we’ve examined in this series are commercial, to varying degrees. This is more profound than first meets the eye.
It turns out — surprise, surprise — that it helps to want to make money when you're doing business for a couple of decades. And while this sounds a little dumb, there are plenty of folks in ostensibly commercial roles who don't actually want to make money.
If we extend this to the startup world, for instance:
- The startup founder who gives interviews, attends events and hosts fireside chats, whose startup has clearly not hit product market fit — is not being commercial. They are likely driven by something else — perhaps the desire to be seen as successful.
- The startup founder who spends a lot of time on Twitter, getting into irrelevant arguments, is not being commercial. They are likely driven by something else: looking smart, or getting things right.
- The founder who is on two dozen podcasts when there is no clear link between the podcast appearance and their commercial interests (i.e. there is no way their ideal customer is part of most of the podcasts’s target demographic), is not doing it for commercial reasons. They’re doing this because they’re driven by something else: perhaps they like the attention.
- The founder who pulls stunts to draw attention to their B2B startup is not being commercial. Or perhaps they are; perhaps they don’t yet understand that attention does not equal purchase intent.
- The founder who is belligerent about creating a successful business and who actively gets into fights with others in their home market (or, worse, their startup ecosystem) is not being commercial; they probably believe that creating a successful startup redeems their outsider status or are acting from a chip on their shoulder; perhaps they believe that success will finally let them feel safe. But this can get in the way of actually building a good business.
This isn't an indictment, of course — it's perfectly possible to build a successful company without being commercial. Chips on shoulders put chips in pockets, as the saying goes.
But of all the possible reasons to keep going at business, again and again, over the full arc of a life, being commercial is probably the best.
Note: members may leave comments under the essay.
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Member Discussions
The Commoncog members-only forum is a private place for sensemaking on business and markets.
Here are a couple of members-only discussions I'd like to draw attention to:
Note that you'll have to be logged in as a member to view many of these threads. You may login here.
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Elsewhere On The Web
Navigating the Mythical Sea of Sameness — Dave Kellogg, writing last year on the (fake) difficulties of differentiating your software product:
Are products really getting so similar that customers can’t see differences among them? Or is it something else?
I think the sea-of-sameness conversation is less about changes in markets, and more about changes in marketers. That is, the staffing profile of today’s software CMOs.
Back in the day, nearly 100% of CMOs came from product marketing backgrounds. Today, that’s no longer true. Because pipeline generation is now the sine qua non of marketing, the vast majority of today’s CMOs come from demand generation backgrounds.
So, when faced with a challenging differentiation problem, it’s a little too easy for them to blame the market and tell the CEO that we’re lost in a sea of sameness.
Kellogg's solution is to go back to basics.
6 Principles of Effective Feedback — Jared Peterson works with Gary Klein, who came up with Cognitive Transformation Theory. (We last talked about CTT in What We Learnt from Speedrunning the Idea Maze).
As you read these principles, think about the training methods you've been exposed to. Think about how you were taught in school.
It's likely many of these principles will not be compatible with the training regimes you've experienced. The most remarkable thing about them, though, is that they describe the cutting edge of expertise acceleration programs.
What is 'the CLA'? Inside the revolutionary coaching method quietly fueling the world's best athletes (archive.is link) — This is content marketing for The Athletic, but it's a long piece that introduces you to 'constraints led approach' — a training method, increasingly adopted in competitive sports, that trains for adaptive skill. CLA is notable to me because it is consistent with the observation that adaptive skill is what differentiates 'true experts' from the merely good.
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The metrics for the Asian Conglomerate Series has actually been pretty bad. Most of y'all aren't interested in the topic.
I am, however, pleased with what we've done. Sitting back now, looking at the 17 pieces and 19 case studies, I think we've contributed something to the body of knowledge around business in Asia.
Some of it is universal. A lot of it has to do with what goes on in my own backyard.
Ok! That's one series wrapped, a few more to go.
Warmly,
Cedric
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