Who Builds Durable Ecosystems?

Keep a cool head and maintain a low profile. Never take the lead—but aim to do something big.

Attributed to Deng Xiaoping

Now that some companies have attained the relevance and complexities of megacities and nation-states, we’ve been asking ourselves what we can learn from nation builders about best practices for business builders. There are many types of nation builders. Some are warriors like Genghis Khan or Alexander the Great. Some are peaceful revolutionaries like Gandhi Ji. Others are more technocratic like Deng Xiaoping or Lee Kuan Yew. Some nations, like the United States, are more explicitly the creations of many founders.

Tech company founders can be categorized similarly. And their corporate cultures—each on its own journey and at its own stage of transition—also span this spectrum. Our observation of them reveals various nuances around the following traits and patterns, which are common among durable business ecosystem founders and nation builders.

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Who Deserves to Grow?

I think the greatest masters go on to achieve a kind of selflessness.

Paul Graham, Hackers & Painters (O’Reilly Media, 2004)

The best companies of a few decades ago were like good employees. You know the type. You can count on them to be pleasant, to do one thing well, to play their part, and to stay in their lane—“lane keepers” you might say. But the good employee is not a great business builder. And the best companies of the past—like Adidas, Anheuser-Busch, Coca Cola, Diageo, GM, HSBC, IBM, McDonald’s, Schibsted, 3M, Toyota, Unilever, Wells Fargo, and even Walmart—rarely veered out of their lanes.

Today’s best companies, on the other hand, were born as full-on “wall breakers.” And they continue to break down more walls. Amazon, for example, went from ecommerce, to logistics, to software, to entertainment. It uses the expertise gained in each category to add more value for customers in other areas. Furthermore, it converts customers into partners, who become creators by offering reviews, launching their own stores, creating entertaining content, and developing their own software. Amazon keeps building flywheels that expand its offerings and improve their quality constantly. As a result, it meets a growing number of needs for customers, saving them precious time and mental energy for other experiences.

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Compounding Ownership Density

Nature does not hurry, yet everything is accomplished.

— Attributed to Lao Tzu

The world’s best companies have almost always been architected to improve in quality as they grow in scale. This worked in the past, up to a point. Analog organization structures struggled to scale agility, which prevented them from compounding their capabilities, products, and business models to effectively serve an ever-expanding range of categories, customer types, and use cases. Today’s best companies are defying past limits, requiring a new rubric for understanding corporate excellence.

Our CXC (customer experience compounding) underwriting framework reflects our current understanding of the critical dimensions that build a company’s no-brainer matrix (NBM), which measures its magnetism for an ever-broadening range of consumers and hyper-personalized use cases. This framework evaluates a company’s ability to compound across each corporate dimension, including its intentions, capabilities, business model, and agility to offer a growing number of fast-improving, no-brainer customer propositions.

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Compounding Customer Value

I would like to recapture that freshness of vision which is characteristic of extreme youth when all the world is new to it.

— Henri Matisse

Many investors obsess over variant perception. At TenCore, we have a variant obsession: customer experience compounding (CXC).

From the customer’s perspective, we believe today’s business climate is as exciting as ever. Across multiple product categories, customers no longer need to prioritize just one or two attributes among convenience, selection, quality, price, safety, speed, and reliability. Instead, today’s benchmark (global best) companies delight customers with fast-improving, no-brainer propositions that offer a layer-cake of value across multiple dimensions.

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