Lenny Rachitsky: belief

Transcript context

…Did they? They didn't. They said, I hope this online thing doesn't really take off because that would be a pisser because we've got 5,000 stores across America, and we've got all that, and that would be a bummer. And so, they don't do anything for 10 years, giving Amazon the scale, so that Amazon then has this huge scale advantage on this, and network effects, and voila, you've got a competitive advantage that you didn't necessarily completely deserve. You needed the help of the player who stood to lose the most to hope that it wasn't going to happen. Same with Tesla, Tesla got a 10 year headstart, not because the OEMs couldn't, they could have, and of course GM did many, many years ago, create a fully functioning electric vehicle. But they couldn't figure out how the hell you make a buck on it, and so they didn't do it, giving Tesla the ability to establish a brand that people associate with that, electric vehicle equals Tesla, and allow them to jump way ahead, and then have the scale that is hard to hard for others to match. You said something that's really interesting that I think is also really important, which is, you said that just being the best or better is not a solution. You can have a better pet food, you implied that's not going to get you there. Can you talk a bit about that? Yeah. You have to answer a second question I guess, which is, here's the way I'm going to be better, and here's the way somebody else isn't going to be able to simply replicate that quickly. One of my favorite businesses, because I was on the board of Thomson Reuters for 14 years, it was Thomson first and then they bought Reuters, so Thomson Reuters. Best business is a business called Westlaw, and it's the dominant provider of online legal searches. So, if you're a litigator, and you're trying to, you're getting ready for a case, and you need to know what are the important precedents for this case, you go on to Westlaw, and put in some search terms using a Westlaw keyword system to help with it, and you get the five cases that really matter. You can Google it, and do the same thing, and you'll get the 500 cases that might matter. How does Westlaw do that? Well, for now over 100 years, they've taken every case that's come out of the US legal system, had a lawyer, a Westlaw lawyer, write a head note that summarizes what's in the case, using these keywords so that they were searchable, and today, to do 2024, takes 1500 full-time lawyers. So, if somebody else said, this Westlaw business is incredibly profitable, and it keeps growing, and it's awesome, I'd like to be in that business... All they'd have to do is hire 150,000 lawyers full time, and you'd have to create a numbering system and a keyword system that's different than Westlaw's, and then you'd have to do what Westlaw has done for the past 50 years, which is give it free to law schools so that they teach their students before they even get out how to use Westlaw, and all... No probs. That'll be easy, right? Nobody's even tried. Why bother? Life's too short. And that's the kind of capabilities you need to be able to say we'll win by having the searches that make the lawyer's job the most effective. And if it saves them time, it saves them money. And you don't need a huge law library. Law firms used to have these huge law libraries, you don't need one, you need a terminal, or actually, now it's on everybody's PC. And you don't need a bunch of librarians to go and find the cases that you need, they pop up on your screen. That's a great case of competitive advantage.…

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