Getting ahead isn't simply a matter of having a great idea, nor of being intelligent or improving your mastery in your chosen arena. The key is to focus on the edge that you can keep for the longer term. In this episode of Motley Fool Answers, Alison Southwick and Robert Brokamp are joined by former Fool Morgan Housel to talk about figuring out what your sustainable advantages are, both in investing and in life. He lays out five possible advantages that you and the businesses you invest in might already have, or want to cultivate, in service of acquiring an edge. The first: the ability to adjust to changes that catch most folks flat-footed. Some companies are still fighting the battles of decades past, while others see around corners.
A full transcript follows the video.
More From The Motley Fool
-
Why You're Smart to Buy Shopify Inc. (US) -- Despite Citron's Report
-
6 Years Later, 6 Charts That Show How Far Apple, Inc. Has Come Since Steve Jobs' Passing
This video was recorded on Aug. 22, 2017.
Alison Southwick: Having a great idea is obviously the first step in the path to success, but what if that idea can easily be copied by someone else? As Morgan Housel writes in a recent column for the Collaboration Fund -- which we all just learned about -- the key to business and investing success isn't about finding an advantage, but having a sustainable advantage. Morgan is here, today, to talk about five ways that you can maintain a competitive edge -- or that companies can maintain a competitive edge -- in business, investing ... I don't know. Anywhere you want an edge.
Morgan Housel: Stuff.
Southwick: Everybody gets an edge.
Housel: You get an edge, and you get an edge, and you get an edge.
Southwick: Here are five ways to do it. So, before we break it down, why did you decide to write about this topic?
Housel: I think it's important for every investor or every business that is trying to actively compete against other people. That's not every investor, but if you are an active investor, I think you should be able to coherently answer the question, "What is my edge? What can I do better than if not everyone else, what can I do better than most people?" And if you can't honestly answer that question, I think that's a flag that you should try to overcome because basically all businesses are competitive.
The reason I wrote the column is because I found if you ask people that simple question -- businesses, CEOs, investors -- a lot of times they struggle to answer it, not because maybe they don't have an edge but because they haven't thought about it, and articulated it. I just wanted to [talk about] what [some of the most common], sustainable sources of competitive advantage are.