00:00 Hamilton Helmer and Chenyi Shi have developed a new framework called the seven powers to help founders answer the question of how to expand the scope of their company.

05:57 Hamilton Helmer and Chenyi Shi have developed a new framework called the seven powers to help founders answer the question of how to expand the scope of their company.

12:49 The seven powers framework is about defending the castle and creating a durable business, and it is important to think about product market fit and power simultaneously rather than sequentially.

19:51 The importance of investing in the right things and the usefulness of the seven powers framework in determining the strategic questions to focus on and the eventual margin structure and competitiveness of a business.

26:14 Understanding the power dynamics of a company can help investors accurately assign a multiple of profit and predict the future cash flows of the company.

32:44 The hosts discuss the importance of understanding long-term competitive outcomes and the value of power in assessing the success of transforming steps in a company's growth.

38:43 Understanding the drivers of power in an established business is crucial when considering expansion into new segments, whether geographic or customer-based, as it determines the potential for success and the risk-reward calculation.

45:00 Understanding the power of your current business is crucial when considering transformation, as it allows you to leverage that power and create a more favorable risk-return prospect for new ventures.

50:47 When considering building a new business that doesn't rely on your current source of power, it is important to evaluate whether it satisfies the same needs or uses the same skills, as pure diversification is typically a high-risk proposition and unrelated diversification is not recommended, while co-action, where there are shared skills but different needs, accounts for the majority of value in new ventures.

57:02 When considering building a new business that doesn't rely on your current source of power, it is important to evaluate whether it satisfies a different need but uses some of the same skills, as this is less risky than pure invention and has a higher chance of success.

01:03:22 The framework for evaluating business development and diversification also applies to thinking about acquisitions, as companies should consider whether the acquisition aligns with their current platform and if it satisfies a different need but uses some of the same skills.

01:09:40 The value of an acquisition is often determined by the ability to find new revenue rather than cost savings, and the cost of that revenue should be favorable, as seen in examples like Disney's acquisition of Marvel and Lucasfilm.

01:15:50 Understanding the extent of a company's power umbrella and expanding into areas where that umbrella extends is crucial for success, as failing to do so can create competitive openings for others to take advantage of, as seen in examples like Blockbuster and the credit card industry.

01:21:42 Understanding the interplay between fixed costs, network effects, and scale is crucial for building a successful business, as seen in the example of Amazon's retail and marketplace businesses.