Monday, March 3, 2008

What Does it Take to Succeed?

Hard work, persistence and passion. These attributes are definitely required but not sufficient. Not sufficient because the more I reflect on my corporate career, my investing life and my forays into small business/startups - the big question that keeps popping up is - what do I bring to the table? In other words - what is my edge?

An edge defines a tangible and obvious benefit. This benefit is what makes you stand out in the crowd. Hard work alone is not an edge, neither is persistence. These are great qualities to have but they do not set you apart from the rest.

To succeed in a career, you have to prove your value to your manager, your team and to your company. The value you provide (real or perceived) has to exceed what the rest of your peer group provides. What can you do to set youself apart from the rest? Is it contingent on the environment, your manager, the business context so there is no one answer but look around you. Why do some team members excel and some don't? They all work hard, have great credentials and work ethic but only a few move up. The edge the successful candidates have runs the gamut from political savvy, competency, commitment, luck, timing, intention...

To succeed in a business you obviously have to provide a product or service that has a perceived benefit above and beyond what is currently available. Wal-Mart's edge is price, Apple excels at innovation and IBM reinvented itself as a global IT player. What affects large business is the same story with a small business. If you compete is a congested market (bakery, motel, sandwich shop) - how are you different from the rest of the established players? If you compete in a new market (blog, social networking, web 2.0) - what benefit do you provide to the consumer? In business (big and small) - you have to define your edge to set yourself up for success.

In investing, the same concept holds. You can chase the next hot stock or investment idea but what are your chances of success? Limited. What everyone knows is common knowledge and common knowledge has no premium. So the question is how do you set yourself up for success? By having an edge - by knowing more than the other investor. And that involves truly knowing more about the business, the sector, the management, the company, the product, the market and the financials. In other words, you have to learn to evaluate the business and buy when you see appreciation potential. Warren Buffett does it very well but others have also figured it out and so can you. It takes education, hard work, persistence and passion, which gives you knowledge - the investor's edge.

When you get an edge, your success is almost guaranteed. That is, till the playing field is leveled and others catch up. Then the race starts again!

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theWild1 said...

great point. especially the part about common knowledge. some of my friends who think they can make money off the stock market are wondering why something is not going up after the story became headline news.

Many people misjudge how difficult the game really is.

dawn said...

Interesting post -
I'm not sure that I agree that, "They all work hard, have great credentials and work ethic..." I think nailing your job is undervalued. When somebody is really excellent at their job - good things usually happen. I'm in total agreement that an edge is a contributing asset to success. A lot of times that edge can be as simplistic as being able to take calculated risks. Most of the people that I know who are quite successful, also have an astounding ability to focus - really focus. They don't waste time on unnecessary elements. I liked this piece - got me thinking! Thanks!