Businesses generally fall under two categories: those that follow a proven business model and those that create a new one. Each has its own set of advantages and challenges, and neither is inherently better than the other.
The first category involves rapid and/or skilled execution of a proven business model. This approach offers the benefits of finding new products and persuading investors based on past successes. However, there are also challenges such as fierce competition and a limited growth cap due to the original enterprise.
For example, Coupang and Amazon may seem comparable on the surface, but Amazon’s profits from AWS far outstrip Coupang’s potential profits from Korea. Moreover, once a business model is proven to be successful, competitors are sure to emerge, leading to intense industry competition.
The second category involves creating a new business model with unlimited potential for growth and improvement. However, this requires a lot of courage and persuasive skills to convince others to support your venture. It can be challenging to maintain your confidence and faith in the face of skepticism from subject matter experts and industry leaders.
Peter Thiel’s book “Zero to One” asks, “What important truth do very few people agree with you on?” This question can help identify the individuals you need to persuade. We can build up on this question by identifying the individuals we seek to persuade. Posit that the people disagreeing with you are not individuals uneducated on your business endeavors, but people that are subject matter experts, intelligent and powerful individuals within the industry you wish to break through into.
While most successful businesses in Korea fall into the first category, creating a business in the second category is essential for reaching the next level. Oh-hyun Kwon, former CEO of Samsung Electronics, emphasizes the importance of “creation” in his book “Insurmountable Gap (초격차).”
As someone who has experienced both categories of business, I am currently building a category 2 business. I’ve learned that the most difficult aspect of business is overcoming skepticism from intelligent individuals. Team members and investors alike are also constantly battered by the same skepticism from intelligent individuals around them.
It takes compelling evidence and unwavering trust to sway people to your side. Ultimately, the key to success requires courage and belief in oneself.