From Morgan Housel at Collaborative Fund:
Whenever a once-powerful thing loses an advantage it once had it is tempting to ridicule the mistakes of its leaders. But it’s easy to overlook how many forces pull you away from a competitive advantage once you have one, specifically because you have one.
One is that being right instils the confidence that you can’t be wrong, a devastating characteristic in a world where outlier success has a target on its back with competitors chasing in tow.
Another is that success tends to lead to growth – usually by design – but a big organisation is a different animal to a small one, and strategies that led to success at one size can be impossible at another. The career version of this is the Peter Principle: talented people will keep getting promoted until they’re in over their heads.
A third is the irony that people often work hard to gain a competitive advantage for the express purpose of not having to work so hard at some point in the future. And once that goal is met the relaxation that feels so justified lets competitors and a changing world creep in unnoticed.
A fourth is a skill that’s valuable in one era may not extend to the next. You can work as hard and be as paranoid as you’ve always been, but if the world no longer values your skill, it’s a loss.
One-trick pony-ism is common, because a top reason competitive advantages were once valuable is an unshakable devotion to one big idea while rejecting all others.
The last is that some success is owed to being in the right place at the right time. The reversion to reality that unmasks good luck is often only obvious with hindsight.
The idea that advantage has a shelf life is a fundamental part of growth.
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