There are 18 Sources of Competitive Advantage.

Which Ones Do You Have? Are You Maximising Your Use of Them?

The money was there, all that latent power… something waiting to be born, something sleeping. He cradled the unformed dream in his hands and wondered who to give it to.

— Ben Fountain, Brief Encounters with Che Guevara

Sources of advantage are a major component of Step #3 of the “4 Steps to Develop a Strategy”. As I wrote there, “true sources of advantage are ones you can invest in and they become stronger over time. As you increase their value, you can then leverage them for more products, which further strengthens them.” In other words (with apologies to bank robbers), having bags of money is not by itself a source of advantage. Nor is having anything that is equivalent to bags of money, such as a gold mine, a competitive advantage. If you purchase a gold mine, it has the net present value of all likely future mining profits built into its price.

However, if you use money to invest in a gold mine you are uniquely qualified to run, then you have a source of advantage. It’s only a source of advantage if you are a natural owner of the asset.

Sources of advantage also must be something you are uniquely good at relative to competitors. And they must help you win customers.

What are the unique technologies, skills, or resources you have that allow you to help your customers accomplish something 2x, 3x, 5x, or 10x faster, cheaper, or better than they otherwise could? They are the reasons that your customers are buying from you and that’s where your advantage lies. If you can’t think of what your competitive advantage is, start with the fundamentals: why is anyone buying your product? Why are they paying you at all? Are they paying you more than an alternative solution? If so, why?

Note that, for a startup, you may have some of these already or you may simple have a plan to acquire them quickly and then build on them. The main source of advantage for a startup is the ability to see the world in a new way and innovate quickly…