-> *From the Prof G Strategy Sprint* The T-Algorithm, or "Trillion Dollar company algorithm" was developed by Scott Galloway during writing his book [The Four](https://www.amazon.com/dp/B01CZB2X4W). At that time no company was a trillion dollar company, but all four had the makings of one. Scott and company at L2 looked into Amazon, Apple, Facebook and Google, how they got to the trillion Dollar mark and how others could replicate their strategies. The "Elements of Success" they initially identified (and applied to their company L2) were: * A recurring revenue model instead of transactional engagements * A niche focus * Defensible IP * and a Global footprint From there they expanded it to the T-Algorithm. > "It is impossible to get above a 100 million $ market capitalization without achieving a service that almost feel natural, that is part of an instinct, something that is hardwired into you." ## Appealing to Human Instinct [[Google]] pays into the desire to have a super **brain**. It's a service that you can turn to with any question you might have now (or in the future) and it would deliver you an answer and provide clarity. So in the user's perception it acts as an oracle or an interface to a divine, all-knowing being. It provides guidance, instills confidence, answers questions and gives us peace of mind. [[Meta (Facebook)]] is the **heart**, bringing together people and fostering relationships. It offers a platform to transact care - caring for others and being cared for on an emotional level. It catalyzes and reinforces emotions. The **gut** is mostly consumption, describing [[Amazon]]. This is about "more for less" and the hunter / gatherer mentality of providing for oneself and family as well as instant gratification. It is around survival, making it through the winter of hard times, stability and long-term security. The **genitals** represent the urge to propagate as a species, to be seen as a potential mate, to represent desirability, which is [[Apple]]. Appealing to human instincts in a nutshell: * Brain -> Something that makes you feel smarter -> The knowledgeable oracle * Heart -> Something about love and affection -> The relatable host * Gut -> Something more for less -> The endless aisle * Testicles -> Something that shows "you get it" -> The exclusive bubble > "Are you in the business of pushing up perceived value - usually the perception of your [[Brand]] or are you in the business of pushing down - usually costs. That's the business of operations and supply chain." So pushing up (brand creation and evoking emotions) would be aligned with heart or genitals. It's usually about irrational, luxury, high margin + low volume. Pushing down (delivering more for less, quantitative & rational returns) would be gut and brain. It's usually about scale, low margin + high volume. Apart from the Four, every company tries to occupy one of these spaces as part of their [[Business Strategy]]. ## Going vertical The outlier of this model is Apple, which does all four aspects well. Apple has the scale of a gut company, but the desirability of a genital company. In other words: The scale of Toyota with the margins of Ferrari. In fact the Four are so valuable as they extend from their core aspects into the others. See [[Vertical Integration]]. ## Human capital The ability to attract human talent is equivalent, if not more important, than being able to attract capital. This is in line with [[Business Strategy#Sustainability]]. The more talent you can attract the better your company will perform. Giving people the opportunity to accelerate their career is key to that. The model argues that meritocracy is the basis for that with the concept of promoting the best & brightest regardless of their background. It points to "purposeful Darwinism", strong competition and signaling "If you made it here, you are among the elite". I'm not sure I'd go for that, or at least not entirely. There are things like inclusiveness, stickiness and personal fulfillment / self realization that go beyond pure performance based merit. Then again, lifting yourself and others is an achievement and might be included? But the strong competition and "culling of the herd" thing seems antiquated. They do get into "going into a company that buys into your success and believes in you" and point to perks and growth investments - not only money, but learning from others. Sure. Then again that investment is meant long-term, right? Being seen as a (the best) career stepping stone is maybe not a sustainable model. Stickiness comes from: Managers able to grown and get the best out of people, compensation, word of mouth & the experience of others and being gracious in separation.