For CTOs, founders, and operators deciding what to build, buy, fund, sell, or stop
Native Alpha™
Alpha, in investing, is the return you cannot explain by the market. Native Alpha is the operating version: the unusual advantage already sitting inside your company, your customers, your data, and your relationships, and the discipline of letting it decide what you build, buy, fund, sell, protect, and stop.
If naming the advantage does not change a decision, it is a slogan. That is the only test this brief really cares about. Everything below is written to help you find the advantage, prove somebody outside the room cares about it, and act on it while it lasts.
THE FRAMEWORK
How to use the Native Alpha framework
READ THIS INTRODUCTION FIRST
Native Alpha: Start With the Advantage You Already Have, Not the Opportunity You Just Noticed
Alpha, in investing, is the return you cannot explain by the market. Native Alpha is the business version: the unusual advantage already sitting inside your company, your customers, your data, and your relationships, and the discipline of letting it decide what you build, buy, fund, sell, and stop.
Read the full brief · 16 min →Then, in this order
Learn more about the framework
01
Alpha, Benchmarks, and Why I Borrowed the Word From Investors
Start here if alpha and beta are not part of your working vocabulary. Plain-language finance, no math homework.
7 min read
02
Capability Is Cheap Now. Advantage Is Not.
What AI made cheap, what it left scarce, and how to split engineering effort between the two lanes.
8 min read
03
Someone Outside the Room Has to Care
The evidence ladder, from a compliment at the bottom to a renewal at the top.
7 min read
04
Product-Market Fit Does Not Tell You Who to Sell To
Why the customer with the biggest problem is often the wrong customer to sell to.
7 min read
05
Where Native Alpha Actually Lives, and How It Decays
Advantage hides at small scales, needs protecting where it actually lives, and expires.
8 min read
06
First Principles Got Turned Into a Slogan
First principles finds what is true. Native Alpha asks which true thing is unusually yours.
8 min read
Where this comes from
Chasing Native Alpha
The book-length treatment: how CTOs find the advantage already inside a company, and how to spot false alpha.
The CTO You Actually Need
What changes about the technology executive's job once capability is abundant and judgment is the scarce input.
Background reading elsewhere
Outside sources on financial alpha and on first principles. None of these are mine, and they are worth reading before borrowing the vocabulary.
- Alpha, defined for investors (Investopedia)
Excess return over a benchmark, and how alpha is separated from beta.
- Alpha and beta in portfolio theory (CFA Institute)
Why practitioners work so hard to tell skill apart from market movement.
- Mutual fund performance and benchmarks (SEC investor guidance)
Plain-language regulator material on benchmarks and what returns actually mean.
- First principles in Aristotle (Stanford Encyclopedia of Philosophy)
Where the phrase comes from, long before it reached a strategy offsite.
The executive test
Fourteen questions to answer before a consequential decision
I do not expect perfect answers. I expect explicit ones. Uncertainty is fine when you can name it.
- What unusual advantage already exists?
- Why is it unusual?
- What would be hard or expensive for someone else to reproduce?
- Who cares enough to give up something scarce because of it?
- What new capability makes it more valuable right now?
- What can we know, see, decide, or do because of it?
- What is the smallest credible experiment that tests the thesis?
- What evidence justifies another dollar or another month?
- What evidence would make us stop?
- What rights, relationships, data, workflow position, distribution, knowledge, trust, IP, or economics protect it?
- If this works, how does each use strengthen the next?
- Does AI multiply this advantage or commoditize it?
- Why are we unusually entitled to win?
- What happens if we do nothing?
Based on who we are, what we already possess, and what is newly possible, what can we know, see, decide, or do that others cannot easily reproduce?