7 Powers: The Foundations of Business Strategy
Helps identify durable competitive advantages. The 7 Powers framework (created by Hamilton Helmer) reveals the economic structures that protect business value from competition.
seven-powers
Use when asked to "7 Powers", "build a competitive moat", "analyze defensibility", "find sustainable advantage", "economic moats", or "Hamilton Helmer framework". Helps identify durable competitive advantages. The 7 Powers framework (created by Hamilton Helmer) reveals the economic structures that protect business value from competition.
What It Is
7 Powers is a framework for understanding sustainable competitive advantage. The core insight: Business value comes from possessing an attribute that produces higher returns than competitors AND a barrier that prevents competitors from arbitraging it away.
Power = Benefit + Barrier
Warren Buffett famously said: "In business, I look for economic castles protected by unbreachable moats." Power is understanding what makes something a castle (the benefit) versus a shack, and what makes the moat unbreachable (the barrier).
The key shift: Move from asking "What's our competitive advantage?" to asking "What economic structure creates durable differential returns?"
When to Use It
Use 7 Powers when you need to:
- Evaluate a business's long-term defensibility (investment decisions, competitive analysis)
- Design a startup for durability (not just product-market fit)
- Understand why incumbents can't respond to your disruptive move
- Prioritize strategic initiatives based on what builds power
- Identify whether you actually have a moat or just operational excellence
- Plan second acts (new business lines that could develop power)
- Win market share battles in high-growth phases
When Not to Use It
- You don't have product-market fit yet
- The business is purely commodity with no differentiation possible
- You want to justify a strategy you've already decided on
- You're optimizing operations (power is about structure, not execution)
Resources
Books:
- 7 Powers by Hamilton Helmer
- Good Strategy Bad Strategy by Richard Rumelt
- Competition Demystified by Bruce Greenwald
Quick Install
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Create the skill file
Run this command to create the directory and SKILL.md file:
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This creates the directory and an empty SKILL.md file.
Open the skill file
Open the SKILL.md file in your favorite editor:
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Or use code .claude/skills/7-powers-the-foundations-of-business-strategy/SKILL.md for VS Code
Add the content
Copy the skill content and paste it into the SKILL.md file:
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