Porter noted that powerful and sustainable competitive advantage is unlikely to arise from any one capability (e.g., having the best sales force in the industry or the best technology in the industry), but rather from a set of capabilities that both fit with one another (i.e., that

don’t conflict with one another) and actually reinforce one another (i.e., that make each

other stronger than they would be alone).

Great execution won’t get you anywhere if your strategy is wrong. Understanding this has paid off handsomely for Rudy at several of his investments, including Perceptionist.

Nothing is tougher and more time-consuming than having to replace people who haven’t kept up with the growth of the business.

Articulating a similarly clear and differentiated strategy, supported by a strong core culture that can deliver on the brand’s promises, is the key for any company wanting to scale up.

Our pet peeve is when a company’s leaders think it should grow regardless of profit. This is just reckless, unless you’re a venture-backed firm pioneering new territory. For everyone else, we recommend getting profitable with the work you have, proving you can get to 15% profitability (based on our adjusted Simple Numbers), adding labor to knock profit back

to 10%, and then growing to 15% again. Lather, rinse, and repeat.