The Book in Three Sentences
In this summary, you’ll learn that behind every success story there’s an Unfair Advantage. For those unfamiliar, an Unfair Advantage is a condition that puts you in a favorable position and the good news is that everyone has one. Examples of unfair advantages include money, education, location, status, and luck.
The Unfair Advantage Summary
What makes some startups successful and others unsuccessful? Not everyone who rises to the top is talented, hardworking, or “deserves” it. While self-discipline, belief, and hard work can lead to success, those aren’t the only paths that will get you there. The path that will lead you to success is using your Unfair Advantage. An Unfair Advantage is a characteristic that gives you an upper hand and it is the foundation of a startup.
Part One: Understand
Chapter 1: Life Is Unfair
Unfair Advantages are all the factors that contribute to success. Despite what we were told at some point in our lives, we don’t have to work hard to succeed, we have to work smart. To be clear, hard work and sacrifice are required for success, but they aren’t the only ingredients that come into play.
Chapter 2: Our Entrepreneurial Journeys
Ash Ali was the son of Pakistani immigrants and was born and raised in Birmingham. At a young age, Ash came up with the idea to sell shoes online, so he taught himself how to make a website. His site was nominated for an award and he soon received offers from other companies who needed help with their websites. Ash moved to London, but when the dot-com bubble burst in the early 2000s, he lost his job and had to move to his parent’s house. This led to the realization that Ash had an in-demand skillset at the right time. He owed his success to a series of variables: he worked at a shoe business that needed a website and he had access to an internet connection. In other words, he was at the right place, at the right time. The skillset he’d developed was his Unfair Advantage.
Hasan was born in Baghdad and his parents wanted him to be a doctor. They moved to England when Hasan was three and he performed well at school. On his way to becoming a doctor, Hasan dropped out of university. He decided to learn how to start an online business. His goal was to create a passive income, but first, he had to learn how to sell. His persistence and charm earned him a few clients, he then learned about SEO and established the passive income lifestyle he’d always wanted. Hasan’s Unfair Advantages were moving from Iraq before the country’s economic decline and the fact that he educated himself and learned from others.
Chapter 3: Success Is Both Hard Work and Luck
Most people believe that financial success and health come from meritocracy (this is the idea that rich people earned their financial success) or fatalism (this is the idea that financial success is unearned and is a product of luck, timing, fate, or natural talent). The truth is that success and wealth are a combination of both hard work and luck.
Chapter 4: Introducing Unfair Advantages
Unfair Advantages are shortcuts you can take in life and that you’re usually unaware of. These shortcuts are usually outside of our control and we must identify and leverage them. We all have unfair advantages: where you’re born; who you know; the amount of money you have; and your interests, skills, or talents. You can’t copy or buy unfair advantages because they’re unique to you. In the business world, you should partner up with someone who has different unfair advantages than you to create balance. Leverage your Unfair Advantages to multiply your impact and achieve your goals. Unfair Advantages complement each other and compound over time.
Part Two: Audit
Chapter 5: Introducing the MILES Framework
The MILES Framework helps you discover your unfair advantages. Apart from your strengths, the framework takes into account your circumstances. There are five categories to consider:
- Money refers to your capital
- Intelligence and Insight refer to what you know, as well as your creativity
- Location and Luck refer to being in the right place at the right time
- Education and Expertise refer to formal schooling and self-learning
- Status refers to your social status, as well as your inner status
Before you look at your Unfair Advantages, try to determine your motivation and your personality. There are five personality types:
- Openness: How open you are to new experiences
- Conscientiousness: How organized, self-disciplined, and goal-oriented you are
- Extraversion: How much you enjoy spending time with others
- Agreeableness: How friendly you are
- Neuroticism: How vulnerable you are to worry, anxiety, or stress
Chapter 6: Mindset
Your mindset allows you to look at your life differently. Being grateful makes you happier, less stressed, and more focused, for example. The authors identify two kinds of mindset: a growth mindset and a fixed mindset. A growth mindset makes you believe that when you’re bad at something, you can acquire it with practice. A fixed mindset makes you believe you’re naturally gifted in some departments and lacking in others. Both mindsets have their strengths and weaknesses, and ideally, you’d balance the two. As an alternative, the authors suggest the reality-growth mindset. This is the ability to accept limits while believing that anything is possible. This mindset has four characteristics:
- Vision: The ability to see something that will exist in the future
- Resourcefulness: The ability to solve problems
- Constant growth and lifelong learning: You must commit to a life of constant growth
- Grit and perseverance: You have to keep going despite some setbacks
Chapter 7: Money
To make money, you need money which would explain why rich people tend to get richer. Sociologist Pierre Bourdieu identified three forms of capital: economic capital (money), social capital (friends), and cultural impact (knowledge, titles, occupation, hobbies, and so on).
Runway time is the amount of time before your company runs out of money and is forced to close down. To continue as long as possible, you have to reduce costs or increase your money. In this case, having a lot of money is an Unfair Advantage. Wealth is also a safety net if everything else fails. For it to be considered an Unfair Advantage, you need six to eighteen months of runway time to start a business. Alternatively, you can build a business that’s cheap and that doesn’t need a lot of money to become profitable.
To increase your income:
- Minimize living expenses
- Learn marketing and sales
- Raise funding
- Learn to code
Chapter 8: Intelligence and Insight
Intelligence is difficult to define. There are different categories of intelligence: IQ, book smarts, street smarts (this is sometimes called emotional and social intelligence), and creative intelligence.
- IQ (or Intelligence Quotient) is a measurement that ranks people’s intelligence. According to some studies, IQ matters and the higher you rank, the more successful you’ll be. There’s still some controversy surrounding IQ though and it won’t likely help you in your business.
- Book Smarts: This is the capacity for theoretical understanding and the belief that you can increase your knowledge by reading books.
- Street Smarts: This is everything you learn outside of formal education. You can acquire street smarts and people skills through experience. It has three components: social and emotional intelligence, common sense, and bullshit detection.
- Creativity: This is about making connections from different fields and finding unique solutions. Creativity can be improved by increasing your knowledge in different areas and fields.
The problem with intelligence is that if you perceive yourself as intelligent, you’re less likely to outsource something to someone who’s more capable.
Chapter 9: Location and Luck
There are benefits to being in a specific place. This is why there are location hubs where businesses cluster together, such as Silicon Valley or Hollywood. Places like that have the right infrastructure, access to investors, highly skilled labor, and knowledge. There’s status and prestige associated with a location.
Timing is important too, but you can get lucky by changing your mindset. This is the idea that your thoughts create luck. The stories you tell yourself (such as “I’m lucky” or “I’m unlucky”) determine your experiences.
In the book, The Luck Factor, Richard Wisman shares the four principles that lucky people use:
- They maximize their opportunities: apart from being in the right place at the right time, you also need the right mindset, so look for opportunities, and if you can’t find any, create them.
- They trust their intuition: trust your gut feeling in personal relationships
- They expect to be lucky: self-fulfilling prophecies exist.
- They turn bad luck into good luck: you can’t control obstacles, but you can control how you see them. Use problems as learning opportunities.
Chapter 10: Education and Expertise
Education is extremely important, but what’s irrelevant is how you get it. There’s a difference between formal education, going to school or university, and informal education, learning by yourself.
Formal education and university degrees have three main benefits: knowledge, network, and signaling. Knowledge refers to the contents being taught: literacy, mathematics, history, and so on. Network refers to having access to other students who also gained entry into that school, as well as mentors and professors. Signaling refers to the credentials or the personal brand you get by attending a specific school.
Expertise is a self-taught process where you learn by doing. To achieve expertise in a given topic, you can learn online, read books, find mentors, or do things yourself by teaching others or offering your skills for free as a way to get some practice.
Chapter 11: Status
Status doesn’t define you, but it’s how others see you. It’s how you dress, stand, talk, your appearance, age, and gender. We’re attracted to high-status people because we associate that with popularity, success, education, and prestige. Status refers to all the assumptions, prejudices, and biases we have. It represents the potential value you can give to others and it comes in a variety of forms: titles, ranks, qualifications, universities, companies, height, beauty, language, race, the place you live, and the car you drive, among others.
According to sociologist Pierre Bourdieu, status stems from three types of capital: economic, cultural, and social.
- Economic capital refers to concrete wealth, such as money, assets, and property.
- Cultural capital is related to your social class. This is reflected in your accent, tastes, hobbies, the way you dress, and your posture.
- Social capital is your network and refers to your relationships and connections.
Unfortunately, status is related to both conscious and unconscious biases, as well as prejudice. People make assumptions about you depending on your skin color, ethnicity, gender, age, accent, religion, sexuality, and class. But in the business world, the characteristics you have don’t guarantee success and diversity helps companies.
Part Three: The Startup Quick-Start Guide
Chapter 12: The Why
Being an entrepreneur is hard. The alternative is being an employee and there are benefits to this. When you’re an employee, there’s a structure and this gives you predictability and stability. Being an entrepreneur, on the other hand, puts you at risk of losing your income, not to mention the stress and difficulties you have to go through.
The most important question you can ask yourself when you launch your own startup is why. For some people, it’s the idea of not having a boss, having the freedom of working whenever and wherever they want, making a positive social impact, or maybe you want fame and fortune. There’s no right or wrong answer, but you have to know your why and you have to define what success means to you. There’s a risk to chasing goals because once you’re about to achieve them, you’ll move the goalpost which means that you’ll never be satisfied. Ideally, success won’t include external measures (money, social media followers, website traffic), but internal ones (helping others, creating the best product you’re capable of). Success should be process-based and not outcome-based.
Chapter 13: The Type of Startup
There are two kinds of startups:
- Lifestyle startups (also known as lifestyle businesses) sustain a specific lifestyle. Law firms, for example, stay small because to have more clients, the firm has to hire more staff which is expensive.
- Hyper-growth startups focus on technology. Examples include pieces of software, photography, films, books, apps, and games. While the initial investment is high, it can then be distributed at a low cost.
Chapter 14: The Idea
Despite what most people think, startups don’t succeed just because they have great ideas. While having an idea is part of the equation, it’s all about execution. Ideas are overrated to the point that you don’t need an original idea to succeed. You can always take something that already exists and improve upon it. Before doing anything, ask yourself what problem you’re going to solve.
You can start by picturing an ideal user. By doing this, you find unmet needs in the market and provide a product or service that meets them. A great way to find this out is by paying attention to people’s problems and frustrations. Never create a solution before looking for a problem.
Chapter 15: The People
Solo founders find it difficult to succeed on their own, so they usually start a team. A startup founding team usually has three members: the creator, the communicator, and the technician. The creator is the person who makes the product. The communicator is the person who sells and markets the product to consumers and investors. The technician takes care of the technical aspect.
Chapter 16: The Business
So you have an idea. Now it’s time to test if people are interested in your product or service. At this stage, you have to build your product and talk to consumers. It isn’t uncommon for companies to pivot (make big changes) as a way to attract more customers. The next step is building an MVP (minimum viable product). This is a simplified version of your product with the core features.
Chapter 17: Fundraising
You might need external funding for your product or service. Fundraising is an intricate process, but your job is to make your product hard to say no to. When pitching an idea to investors, be clear and specific. Also, you must explain:
- What your startup does
- What problem you’re solving
- How big your market is
- What your traction is
- How you’ll make your money
- Who your team is
- Who your competitors are
- What your Unfair Advantage is
- How much money you need
- What you’ll spend your money on
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