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Gulp

“Rather than building factories or hiring a huge sales force, you just license your crucial piece of intellectual property to others . . . Let another company, or many other companies, do all the hard work of making it, selling it, servicing it, and so on.” --Andy Kessler

Although Eat People and Other Unapologetic Rules for Game-Changing Entrepreneurs by the seemingly somewhat dyspeptic Andy Kessler (Portfolio; Penguin; $25.95) is largely about entrepreneurs setting up companies that can scale like mad because they are likely to be services like a website or something in the arena of electronics used to power the former, and even though Kessler is somewhat cavalier vis-à-vis people (“But we climb the steep hill of economic growth by standing on the bloody heads that have rolled from those at obsolete jobs,” he writes, and somehow, his self-referential recovery doesn’t ameliorate it: “Gruesome, the metaphor anyway, but real”), and even though he isn’t a proponent of higher education (“College, when it’s not learning you how to learn, prepares students for the very jobs that Free Radicals are busy getting rid of!”—and, yes, he’s among the Free Radicals), actually makes a valid point that’s worth considering, with some modifications.

Kessler is a proponent of specialization, or of owning a layer of a horizontal stack. And layer on layer it becomes a vertical organization. But because you might have a layer, there’s not the entire burden associated with the other slices. Again, there is his bias against getting his hands dirty—“Rather than building factories or hiring a huge sales force, you just license your crucial piece of intellectual property to others . . . Let another company, or many other companies, do all the hard work of making it, selling it, servicing it, and so on.”

But for all that, there is the important point that you should work to create expertise and capability in a particular area that can then be deployed by your customer in such a way that you both benefit. For example, you could create profound expertise in anything from producing headliners to running computational fluid dynamics. That is of keen value to organizations, especially given the downsizing that’s happened over the past several years, which led to the loss of much institutional knowledge. In addition, the amount of tech has advanced such that new knowledge is always necessary. But while deploying it, try not to step on the heads of others.—GSV