Alaska Framing Contractor Strategy

Shaan shares a story about a parent he met at his daughter's school who found success by going where the competition was weak.

"At my daughter's school I've gotten to know some of the other parents. One of the guys does framing - I'm so not handy that I don't even really know these terms, but he frames buildings. I asked him, 'How's it going? Where's the project? Have I seen it? What do you do?'

He said he does hotels. I asked if it was one I've stayed in here. And his take was basically: 'Look, I can be the thousandth best framer in California right now, coming in as a new guy into the space who doesn't have twenty years of referral relationships with all the other contractors, trying to scrape and claw to do business with expensive labor here in California, and be competed down to the bare margin because they can bid it out to 30 guys and whoever comes up with the lower priced option is going to win.'

But if he goes to Alaska, it turns out they just don't have very many framers. He said, 'It's easier for me to get on a flight once a month and go to Alaska than it is for me to build that business here.'

When I saw that, I thought: Munger has this great quote - the secret to winning in life is weak competition. It's basically go where there's fish but not other fishermen. He's not innovating, he's not using some new technique in framing. He just went to a place where there's not a lot of people offering that service.

That one principle can be the difference between being the thousandth contractor here with razor thin margins and making great margins and having to get on a flight once a month."