4 Problems with Hamilton Helmer’s 7 Powers (Jeff’s Asia Tech Class – Podcast 62)

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This week’s podcast is on the well-known 7 Powers framework by Hamilton Helmer. I go through some of its limitations and where I think it works best.

You can listen to this podcast here or at iTunes, Google Podcasts and Himalaya.

Hamilton Helmer’s fundamental equation for value creation and capture

Value = M0*g*s*m = market scale * power

  • M0 is market size at time zero. This is about targeting big and growing market opportunities.
  • S is long-term persistent market share.
  • m is long term persistent margins (operational margins after cost of capital).

Hamilton Helmer’s 7 Powers:

  1. Scale Economies
  2. Network Economies
  3. Counter Positioning
  4. Switching Costs
  5. Branding
  6. Cornered Resource
  7. Process Power

From the Concept Library, concepts for this article are:

  • 7 Powers
  • Competitive Advantage
  • 4 Terrains and Strategies (BCG): Predictable vs. Malleable
  • SMILE Marathon

From the Company Library, companies for this article are:

  • Netflix
This is part of Learning Goals: Level 7, with a focus on:
  • 35: Competitive Advantage

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I write, speak and consult about digital strategy and transformation.

My book Moats and Marathons details how to measure competitive advantage in digital businesses.

I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.

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Get a deeper understanding of the strategies and business models of the best digital companies.

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Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

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