If an economy wants to be an evergreen industry, the more conditions you need to depend on, the better, the less, the better. Many people will think that the more resources you invest, the better. Take money and take people.
actually not. To survive, the fewer conditions you rely on, the better. So, how little is appropriate?
Too small to complete a certain thing with a small factor, must not increase the degree of additional elements (Occam razor principle). The principle of Occam’s razor is the ultimate, that is, the simple one, that is, any rational system, which runs on a basic principle.
At this time, you may ask, what does Jane have to do with business?
Jane’s application in business is characterized by a combination of entrepreneurship, that is, the most important and deadly element of your business success or failure factor – a single element.
What are the signs before the turning point?
Grove’s book “Only the paranoia can survive” refers to the inflection point curve, that is, any enterprise will have an inflection point. After encountering the turning point, the enterprise will either skyrocket or go down. What are the signs before the turning point? Ten times the speed change.
So, is there a ten-fold change in the overall composition, or is there a ten-fold change in a certain element in the portfolio?
The answer is an element.
Because if the overall tenfold change occurs, the result is irreversible. And a single factor has a tenfold change, and companies can also make strategic transformations based on it.
A ten-fold change in a single factor is a precursor to a broken point. In this way, companies can take half a step ahead of others and win strategic preparation.
Grove further uses Porter’s model to demonstrate ten-speed changes, such as when tenfold changes occur in any area of competition, technology, users, suppliers, complementary companies, operating rules, etc., are reminding you – very likely A new cycle is coming, either you are subverting others or others are subverting you.
Many people think that companies only need to work hard to get everything done. In fact, this statement is wrong. Enterprises need to care about macro data, and they need to care about Sino-US trade, because these macroscopic things will remind you that a single factor may have changed ten times, and the whole industry will change accordingly. If this factor has deteriorated ten times faster, what good is it for you to do well?
So I suggest that a company start an innovation conference at least half a year and discuss it with this model.
A ten-speed change in a single factor usually leads to a cycle. The cycle can help us judge the vents. Innovation breakpoints are often closely linked to innovative dividends and enthusiasm. In this sense, in the past few years, Lei Jun proposed that “the pigs can fly in the air,” or “every time you should follow the trend, do not move against the trend” has some truth. Just as Amazon relied on the Internet dividend period, Jobs found the field of smart phones. The US group and the headlines today ushered in the wave of mobile Internet. The development of vibrato is inseparable from the development of 4G and Wifi.
It can be seen that any great product is closely related to a certain innovation breakpoint and a ten-fold change in a certain factor.
No critical point, you work hard to 99% is also equivalent to 0
Then, the company has found a single factor ten times change, found a broken point, and then what? How to break through the broken point? There is a power behind the word breakdown, and I named it the threshold effect.
What is the threshold effect? Most of us believe that life is a percentage. Some people say that I have worked hard to 80%. Some people say that I have worked hard to 99%, but it is very strange that I can’t break through. This is the tipping point at work! After passing the critical point, reaching 101%, it becomes another property. As long as there is no critical point, you are trying to reach 99% and it is equivalent to 0.
Therefore, the real world is not a relationship of percentages, but a relationship of 0 and 1. If you break that critical point, you can live to become 1 and break the critical point. If you work hard, it will not help. This is the threshold effect.
Before the threshold is broken, the red sea is everywhere; after the threshold is broken, one spends a world.
However, the resources of startups are limited. How do you break through the threshold at this time?
Step 1: Find the smallest incision.
Step 2: Force a hole.
Pour all the resources into the smallest incision and puncture it. Don’t think that the incision is small, and then the small mouth, once broken down, is a brand new world.
As you can imagine, Tencent started with QQ, an instant messaging software that developed into the current Tencent Empire. And Ali, the beginning is nothing more than a virtual store that buys and sells things online. After such a tiny click, it brings the entire Ali Empire today.
Therefore, our thinking must not be the static thinking of the two-dimensional plane, but to find a point. After the breakdown, the dimension of the world will be changed from two-dimensional to three-dimensional.
Usually the barrel effect means that the capacity of the barrel is related to the shortest board, so the company must make up for the short board. This sentence is used in traditional management without problems. However, if you use this sentence in innovation, you will never get it.
Innovation is about – long board theory.
Charlie Munger once said that the winning system goes to “nearly absurd extremes” in maximizing single elements and minimizing other elements. And this extreme is the breakthrough point of innovation, breaking through the threshold. Reflected in the barrel effect, it is the average force. If you work hard on average, no one area can break through the threshold. Even if each field is 60 points, you add up to 60 points. But at this time, as long as you have a board breakdown threshold, the board breaks through 100%, and your entire system will be taken to a larger realm and become 1.
Buffett has a classic story.
He asked the investors here: “What do you think are the 20 most important investment areas in the future?”
Everyone wrote it out.
Buffett went on to say, “Okay, choose three out of these 20 areas.”
Then Buffett said a very important word: “Your future life is to stay away from the other 17 areas.”
This is to take one, to maximize the single element. Our resources and capabilities are very limited, you must penetrate it in a small place.
Eric Lace, author of Lean Startup, once suggested that when a company develops a new product, it is not to create a larger, higher, and stronger product than before, but to focus on a certain function of the previous product. Zoom it in to a new whole.
▍Case: How PayPal breaks through the break point
In the case of Elon Musk, he said that the most important insight into the creation of PayPal comes from its birth. We originally planned to use PayPal to provide integrated financial services, which is a large, complex system. As a result, everyone is not interested in introducing the system to others every time. By the time we introduced the small feature of email payment in the system, everyone became very interested.
So, Elon Musk decided to focus on e-mail payments, and PayPal really got a hit. This incident also helped Elon Musk gain a cash return of nearly $200 million.
▍Case: How does the iPod break through the broken point?
While Steve Jobs is doing the iPod, Sony has done CLIE. This product combines Sony’s 50-year high-tech in one. It can listen to songs, record songs, edit songs, record videos, edit videos, put videos, and it can also be a computer. It is small enough to fit directly into your trouser pocket. But it only has one problem, it is too complicated, which makes many people wonder, do not know how to use.
In contrast to the iPod, there is only one poor function: listening to songs. But in 2007, its market share reached 70%, accounting for more than 50% of Apple’s revenue. Therefore, it is the iPod that maximizes the single element of listening to songs, which has made this product and made Apple.
Remember: Sometimes, the technology is too good, but it pushes you into the dilemma.
Today, it seems that in 2012 and 2013, the mobile Internet has just begun, which is the dividend period for mobile users. It is very cheap to buy pre-installed or downloaded. Grasping this window period, there are actually two people who wash the new users on a large scale. One is Wang Xing, he founded the US group; the other is Zhang Yiming, who founded the headlines today.
Today’s headlines will use all of the revenue to buy traffic, and fully seize the innovative dividend when the first wave of Internet traffic dividends comes out.
Please note: Innovation breaks are dynamic. If the single factor of ten-fold change changes, the break point must also be adjusted accordingly. For example, the US group started its group purchase. In 2011-2014, group purchase was a factor of ten-fold change; but in 2015, the group purchase reached the limit, and the US group broke into a take-away.
Don’t think that if you grab a bonus, everything will be fine, and the bonus will expire. So, you must jump out to see if the bonus has changed, what is the next wave of dividends, and what is the bonus.
In short, a single element is divided into two main points:
Point 1: How to identify the break point? The single factor changes ten times faster.
Point 2: How to break through the break point? Maximize a single element.