The Barbell Principle

The business world is becoming more like a Barbell structure. You have a big dominant player (or even two) on one side. And on the other side of the Barbell you have a multitude of specialist players who own their niche. 

Take a look at some key industries for example. 

  1. Media=Netflix vs. Youtube Influencers

  1. Ecommerce=Amazon (The Empire)  vs. Shopify (Arm the Rebels)

  1. Venture Capital =Softbank Vision Fund/Sequoia/Founders Fund/A16Z (BIG) vs. Harry Stebbings & his 20MinVC Angel fund & the Angellist Rolling Funds (Small)

It reminds me of some old business strategy books I read. Strongly recommend “The Gorilla Game” by Moore & “The Rule of 3” by Sheth which shaped alot of my thinking here. 

Net net: Don’t get stuck in the undifferentiated middle.

You don’t have the scale or the brand name to compete with the folks at the top. You have too much cost structure and not enough focus to compete to win the niches. 

This is the kill zone in business. Definitely not a place you want to be. If you find yourself in this place, you either push hard and scale to become a top 3 player. Or you completely niche down and dominate this segment. This has been shown over and over in industry after industry.

Listen to this Newsletter: https://listencat.com/the-hard-fork-by-marvin-liao-podcast/

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