Succeeding in a competitive field like taxes can seem difficult. There’s no shortage of competition. But plenty of tax business owners do succeed, and very nicely at that. So how can you join those ranks? Is there an easy, paint-by-numbers formula you can use to do it yourself?
Two recent books shed light on the answer. Together, they offer a profound strategy that you may find easier to implement than you imagine.
Peter Thiel co-founded Paypal and was Facebook’s first outside investor. His new book, Zero to One, is based on a class he taught on Startups at Stanford University. But while his credentials are 21st-century Silicon Valley to the core, his secret to success dates back to the robber barons. It’s good, old-fashioned monopoly.
“Competition is for losers,” Thiel told the Wall Street Journal. Perfect competition may be the default state in Econ 101. But monopolies own their markets, so they can set their own prices. And competition, Thiel says, is now a relic of history.
“Tolstoy famously opens Anna Karenina by observing: ‘All happy families are alike; each unhappy family is unhappy in its own way.’ Business is the opposite. All happy companies are different: Each one earns a monopoly by solving a unique problem. All failed companies are the same: They failed to escape competition.”
Sam Wilkin is head of business research for Oxford Economics, a research and consulting firm. His misleadingly-titled new book, Wealth Secrets of the One Percent, skips past the ordinary millionaires who make up the “1%,” and focuses on the few who become obscenely wealthy billionaires.
He finds that behind almost every great fortune is a “wealth secret” designed to defeat the forces of market competition. He echoes Peter Thiel quite bluntly: “Don’t be the best. Be the only.”
So there you have it. The secret to getting rich. Don’t be a competitor. Be a monopolist.
Easier said than done, right? After all, there are literally hundreds of thousands of tax businesses in America, from the “Big Four” giants to startups still working evenings to prepare tax returns at home. There’s no way you can eliminate the force of competition… or is there?
The key here is to pick your battles, and pick them carefully. No, you’ll never be the “only” tax game in town. But how hard would it be to become the “only” tax firm that helps (insert your target market here) accomplish (insert their goal here)?
There’s your formula. As simple as that. I realize implementing that formula is a different story, but the plan itself is easy to grasp. Done right, it will eliminate enough of that competition that you can go about building your business as if it didn’t even exist.
What does that mean for us? Here are three legs to use to build your monopoly stool:
1) Target Market: Pick a specific market (or markets) that is able and willing to pay the fees you want. Professional markets, demographic markets, subculture markets, it doesn’t matter. Pick one and make yourself indispensable to them.
2) Unique Selling Proposition: Once you’ve targeted your market, give them a reason why they should do business with you and you alone. You don’t have to monopolize that market for real, you just have to make them think you’re a monopoly.
3) Networking and Referrals: Focus on networking and referrals. Monopolies don’t have to cold-market because they get all the business anyway!
Peter Thiel is worth $3.3 billion and ranked #284 on last year’s Forbes 400 list of the richest Americans. He’s a pretty sharp guy. And while he may not have had your business in mind, he’s worth listening to!