The Prince

The Prince is a 16th century political treatise, famous for condoning, even encouraging evil behavior amongst political rulers, in order for them to stay in power.

This distinction is interesting and I’d never thought of it that way.

Machiavelli describes the example of Persia, which, in 323 BC when Alexander the Great died, had no governing ruler. One of his generals soon took over, but the Macedonians expected to lose control of the country they’d previously conquered quite quickly. In the end, they maintained power for another five decades.

This was due to the ruler-servant system in place in Persia before, because Darius III had crushed all political enemies in the country and gotten institutions and leaders to become loyal followers. This made the country very hard to conquer, but once Alexander had control, there were no autonomous regions or rulers left to challenge him for the throne.

Thinking the other way around, a country like France with a ruler-baron system, where the king relies on barons running municipalities is inherently unstable and thus easy to conquer – but hard to rule.

Transferring this lesson to business, you can see the similarity to modern markets. A new market with very few players is easier to dominate, but it’s very hard to keep this dominance, because of all the competition that comes after you, once they’ve discovered it’s a good market.

On the other hand, if you enter a very competitive market, it’s hard to become the industry leader – but once you do, you’ll likely stay ahead for longer, because less new parties enter after you.

There are lots of ways to build an army and Machiavelli explains why some are better than others. For example, hiring mercenaries – soldiers that simply fight for the money you pay them – might be an okay solution for conquering other countries, but not for protecting your own. Since all they care about is money they’ll run away quite fast when things get tough, because even the best salary isn’t worth dying for. A capable mercenary general, who can lead his troops into tough battle, however, might realize he can just as well lead them to fight against you. Since mercenaries are loyal only to money, they’ll empty your pockets in times of peace and be useless in times of war. The same holds true for auxiliary troops from fellow states, who tend to occupy your country after a victory in battle against a common enemy. What good are an ally’s helping troops if they never leave? Just like a good country, a good business needs its own army. Many businesses today try to rely only on freelancers and temp workers – but…