I have mentioned before that back when Margaret Thatcher was still in charge of Britain I used to manage a betting shop in Aberdeen. It was thanks to this first career that I first came across the concept of the trifecta.
If you are not familiar with it, a trifecta is an American coinage from the 1970’s and originally referred to a bet that predicted the first, second and third horses across the line in the correct order in a given race. The odds on getting a trifecta right are pretty low and most betting establishments will have a house limit so the risk/reward ratios are not in your favour.
Now, I had forgotten about the word until #1 Son (a linguist) mentioned to me the other week that a trifecta is now used generally to mean the concept of three separate outcomes of which any two are possible but all three are highly improbable. For instance, you can have any two of brains, money or looks but not all three. Go ahead and choose.
In the 18th Century, Adam Smith, David Hume and Immanuel Kant all came to the conclusion that human endeavour is, in essence, based on three things: capital, knowledge and labour. From this flows our perception of the “economy”.* Over the last three centuries, lesser philosophers have tended to emphasise two out of three as if the achievement of the economic trifecta was, well, utopian. Marx for instance initially bored the word to death by picking on capital. If only he had focussed on knowledge and labour perhaps.
A decade or so ago in the early days of Snedden Campbell, when I decided that I was really clever, I concluded that business in general obsessed about capital and knowledge and downgraded the contribution of labour. To me, it stood to reason. My discipline is people so anyone who was not putting finding great people at the centre of their business strategy was clearly insane.
Once I had this bias in my thinking I droned on about it and (like Marx perhaps) found evidence everywhere to support my perception. Business not profitable? Hire the right people to make some sales. Product development issues? You need to find some product developers. Need a strategy? Appoint the right person and you will have one.
My assumption was that everyone played to his or her biases in just the same way that I did. Scientists would try to solve a businesses problems through invention. Accountants would see fiscal discipline as the way to salvation.** And so on.
My pet theory explained a lot. Chiefly it explained why some companies would not so much as give me the time of day even though I had the solution to all their problems in the shape of the brilliant people that I could identify for them. These organisations clearly thought that raising more cash or protecting their intellectual property was their route to riches.
Turns out that I was wrong. Over the last couple of years, I have worked really really hard to spend much more time with business owners and investors in the medical technology industry. What I now realise after spending lots of time in boardrooms, laboratories and intimidating offices with nice views across capital cities is that to be truly successful in business you have to achieve the trifecta.
Now when I look at businesses in MedTech that have really made it I see the same thing. A balance across IP, funding and people. Conversely, when I talk to the survivors of failing or failed companies (it is part of my job after all), I see companies that have not achieved the trifecta. Sure, sometimes not having the right people was the issue but it was just as likely that the original idea that led to the start-up, whilst lovely, just was not able to make money outside the university lab it started in. Okay, with an infinite amount of funding even a turkey might fly but it won’t be very elegant and investors would rather find a prettier home for their client’s cash.
All this is a roundabout way of retelling what Smith et al realised 300 years ago.
To be successful you need to figure out how to win the trifecta. The good news is that there is no house limit.
*Look, I appreciate that this is a wild oversimplification but space and attention spans demand it
**To be fair to accountants they are usually right about this