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


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


I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.

This content (articles, podcasts, website info) is not investment, legal or tax 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. This is not investment advice. Investing is risky. Do your own research.

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