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Thursday, June 7, 2018

Blink: Eight factors will combine to create the first trillion-dollar company.

The Four Horsemen – Amazon, Apple, Facebook and Google – dominate not only our online experience but the whole corporate world. The Four have become the world’s most valuable companies. They’ve reached their success by appealing to our deep human desires while also engaging in some questionable practices. And while there’s no doubt they’ll be around for a while, at some point, one of Four might disappear, or a fifth horseman might arise. In the meantime, it’s best to learn how to thrive in the world they’ve created.

The Four Horsemen dominate the world today. But might a fifth horseman emerge and unsaddle these other riders?

If that were to happen, this fifth horseman could well become the first company with a market valuation of $1 trillion.

According to the author, there are eight attributes that a fifth horseman would need to possess in order to become the first trillion-dollar company. Since “trillion” is the key word, he calls these combined attributes the T Algorithm.

First is product differentiation. Each of the Four offer a superior product – Apple has the iPhone; Amazon can deliver within hours – so a challenging horseman would need a comparably superior product.

Second is visionary capital. The Four all offer a compelling vision for the future – and it’s this vision that attracts investors. Google, for instance, strives to organize all the information in the world, while Facebook wants to connect everyone on earth.

Third is global reach. A trillion-dollar company needs a product that can reach anyone, anywhere. So it will probably have to be at least partially digital.

Fourth is likability. In order to avoid regulatory intervention, the fifth horseman would need a very positive image. Right now, the Four aren’t looking as benign as they once did, and this is the main chink in their armor.

Fifth is vertical integration. For a company to be vertical, it must control different stages in both the production and distribution of its product. The Four all do this.

Sixth is artificial intelligence. The Four are data experts; they collect as much data as possible and, in the process, make their algorithms as smart as possible.

Seventh is accelerant. In order to attract top talent, a fifth horseman would need to be perceived as a company that could accelerate a person’s career.

And eighth is geography. Each of the Four is situated near a prestigious university – Stanford, UC Berkeley, the University of Washington – and they each have cultivated a good relationship with their neighboring academic institution. This allows them to recruit the best and brightest.

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The above excerpt has been taken from The Four book authored by Scott Galloway.

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