Secrets in Business

Contrary to the new wave of building in public and "transparency" - most great businesses are built on some kind of secret(s).

Reflecting on this now, I think a big part of these secrets is less about how to actually run the business. It's more about the strategic relationships and the way they talk about their business that matters.

Monopolies

Google is a great example of a company that keeps many secrets. They're not the only ones, but everyone already talks about Facebook and I don't want to keep thinking about their company.

Google is most interesting because they have a complete monopoly on "search advertising." However, they call themselves an "advertising company" and it makes sense why.

Governments don't like monopolies. Single sources of tremendous power and unfair advantages are bad in a free market because the monopoly can corner the consumers. We'll have no choice but to play by the rules of the monopoly owner.

But Google has a monopoly on search advertising, and their tremendous data-stores mean that everyone has no choice but to play by their rules.

But the way they talk themselves into being an "advertising company" is suddenly very important. Google doesn't have a monopoly on all advertising, just search. The word games really matter, and most governments are full of people too old-world to understand this nuance. Google knows this and that's why they do it.

What's also rarely talked about is why some monopolies are allowed to exist and others are not.

Strategic relationships

As the dominant forces of industry continue funding political campaigns, they have direct access to the people who create the rules of our society.

This is why it's so difficult for Google to make a move now. Once marked a threat for security and privacy, few politicians can take money from them - and it's a huge risk if they do. In America, anything counter to individual freedom (including data privacy) is bad pr.

So what's happened? Take Palantir. They're a massive company worth billions of dollars. More than half of their revenues are from government contracts and they've locked in deals with the ministry of defence.

How do you think Palantir of all companies is landing all this work with these particular clients? They have the strategic relationships that matter. Peter Thiel is an absolute genius for this. Knows the right people and gets the deals done. It's my guess that Palantir is not the only company that could do the work. But chances are, the rules in those organizations are written in a particular way that makes Palantir the standout choice.

There's nothing wrong with this. But it's an important distinction.

Playing the game.

When I was selling VR solutions to enterprise companies, most of the time I rarely ever won big contracts from government groups. Even here in BC, the game goes on.

Our competitor, who won most of those deals, made some interesting hiring decisions. Some of their "partnership people" - aka salespeople - were all ex-government bureaucrats. They were friendly with the higher-ups, knew who's who, and could make a phone call to get the answers they needed on the spot. They were also involved in writing the rules for how these people got hired.

They'd just make a call, get into the group that was being formed around tech, write their rules, and suddenly their company was winning the big contracts.

It's really that simple. Strategic relationships are a game that we all have to play at some point if we want to get ahead. Unless they have no choice but to come to us (we'd have to be so good it's not even comparable), or, the way they're selecting companies falls under scrutiny.

If that company winning those contracts was suddenly "bad pr" for the government folks who keep giving them money, you best believe they wouldn't get those deals anymore.

The game isn't about being the best company with the best price. There's so much more to it than that.

Great big companies win the back of secrets. Bill Gates and Microsoft got their first huge job because Bill's mom was an executive at IBM (the company that hired Microsoft for their first big job).

It's about leverage. Journal about this soon.