Sol Orwell, a fellow Canadian, has refused venture capital for his very profitable business, Examine.com, because he doesn’t see an upside in relinquishing control to venture capitalists. He doesn’t need cash—his company makes seven figures per year. He isn’t looking for a quick out or trying to sell—he enjoys his work a great deal. As a majority owner, he doesn’t have to answer to anyone except his paying customers.

Titled Lords of Strategy: The Secret Intellectual History of the New Corporate World

Part 1: The oblique world

3. The profit-seeking paradox

George Merck and Robert Johnson created great businesses which, in consequence, made remarkable amounts of money for their shareholders. ICI and Boeing were more successful as profit-making companies when they ‘served customer’s internationally through the responsible application of chemistry’ or ‘ate, breathed and slept the world of aeronautics’ than when they tried to ‘maximise value for our shareholders’ or ‘go into a value based environment’.

But it was Stewart Resnick who helped me see another even more important fact about the silver machine—that its advantage, though real, wasn’t interesting.

The silver machine’s advantage gives it value, but the advantage isn’t interesting because there is no way for an owner to engineer an increase in its value. The machine cannot be made more efficient.

For Stewart Resnick, and now for me, a competitive advantage is interesting when one has insights into ways to increase its value. That means there must be things you can do, on your own, to increase its value.