Today, the word “monopoly” tends to be associated with negativity. Quite often, when we think of a monopoly, we think of a company that takes advantage of consumers or leverages political connections to strengthen their market power. Per Bylund, an Assistant Professor of Entrepreneurship and Records-Johnston professor of free enterprise at Oklahoma State University, believes this negative connotation is rather unfortunate. In his article, Entrepreneurs Should Aim to Be Good Monopolists, he reasons that businesses should really strive to become natural monopolists. Simply put, an entrepreneur should strive to create a business in which no others can compete with. This will ultimately benefit both the monopolist and the consumer in the long run.
Bylund lays out four principles for entrepreneurs to follow in order to create a healthy monopoly. The first rule is to create unbeatable value. Value creation should drive your business decisions. The second rule is to offer deals. Don’t be a rent seeker. Offer a profitable price that is low-cost to the customer. The third rule is to produce what consumers don’t know they want. Be an innovator and create something that customers need to have. The fourth rule is to be principled. Value creation is what’s important. Do not be lured into cheating the customer. Keeping with these principles, an entrepreneur will be on the right path to building a company that no other can compete with.