Obsidian Memo] The British Empire Playbook: A Military Strategist's Guide to Corporate Strategy in Finance

Personal Note

"I would sup with the devil if it helped defeat Hitler." - Winston Churchill

Hi All,

I have always found the history of colonisation fascinating. As you all know, my theory is that capitalism is a power structure. I was born in Korea, a country that was never colonised by a Western force in its 5,000 years of homogeneous history (other than Japan's 36-year colonisation in the 20th century, which is not a Western power). Whether it was the country's geographic location that granted steering away or some divine protection is up for debate. It was only recently that I began to understand colonisation and the ripple effects that still echo in the world of politics, finance, and international relations. I grew up in Canada and America surrounded by UN diplomats and German and Israeli host families, so the ripple effects were felt less strongly. But once I moved to the UK nine years ago, I started to learn about the nuanced and layered stigma associated with colonisation that is still deeply entrenched in every single part of society and in European, South East Asian, Middle Eastern, Latin American, and African peoples' psyches — which compelled me to revisit things and really delve into this. These dynamics result in sets of guilt, remorse, anger, biases and stereotypes depending on which side you are from - and of course, create completely different understanding of the world and outlook on life as a result.

Why did certain empires and nations lose the war despite having resources, while others won the battle? Most companies fail at expansion the same way Spain and France failed at empire — they go in heavy, spend massively, try to control everything, and collapse under their own weight. Britain didn't win because they were the strongest. They won because they were the smartest. Here's how you replicate that model in your business.

Enjoy!

I. Strategic Principle #1: Control the Infrastructure, Not the Territory

Britain didn't try to own everything. They owned the means of movement — the ships, the ports, the trade routes. Everything else flowed from that.

Corporate Translation: Don't race to own every market. Own the platform, the distribution channel, or the supply chain that everyone else depends on. Amazon didn't try to beat every retailer — they built the ship lanes every retailer now sails on. If your competitors need to go through you to reach their customers, you've already won without firing a shot.

Tactical Action: Ask yourself — what is the "ocean" in your industry? Who controls the infrastructure layer? If it's not you, either build it or secure access to it before your competitors do.

II. Strategic Principle #2: Never Stop Building the Fleet

Britain had one rule that other nations broke constantly — they never stopped building ships. Other rulers would shift priorities, get distracted, deprioritize the Navy. Britain treated fleet-building as non-negotiable.

Corporate Translation: Your "fleet" is whatever gives you market reach — your sales force, your technology stack, your distribution network, your talent pipeline. Most companies build these aggressively during growth phases and gut them during downturns. That is exactly when your competitors are doing the same, which means whoever keeps building through the hard times owns the next cycle.

Tactical Action: Identify your single most important capability — the one thing that lets you reach new markets. Ring-fence the budget for it. Make it untouchable. When everyone else is cutting, you are compounding.

III. Strategic Principle #3: Let Private Armies Fight Your Battles

This is arguably Britain's most underrated strategic insight. The Crown didn't send soldiers everywhere. They let private companies take the risk, absorb the losses, and do the hard work of market entry — then stepped in once the territory was secured.

Corporate Translation: This is the franchise model, the venture capital model, and the platform ecosystem model all in one. Instead of expanding into every new market yourself, fund or enable others to do it for you. Take a smaller cut, but take it everywhere. Let entrepreneurs carry the execution risk while you provide the "Royal Navy" — brand, legal protection, infrastructure, credibility.

Tactical Action: Before entering a new market directly, ask: can I enable a partner, a franchisee, or an ecosystem player to enter it first? If they succeed, you extract value. If they fail, your core is untouched. This is how Apple built the App Store — millions of developers taking risk, Apple taking 30% of everything.

IV. Strategic Principle #4: Design a Closed Economic Loop

Britain taxed goods leaving the colony. Then taxed them again entering Britain. Then sold them back to British citizens at a premium. The money never fully left the system.

Corporate Translation: The most dangerous businesses to compete against are ones that have built a closed loop — where every customer action generates revenue that funds the next customer acquisition. This is the subscription model. The ecosystem lock-in model. The razor-and-blade model.

Tactical Action: Map your revenue flow and ask — where is value leaking out of your system to competitors, suppliers, or intermediaries? Every leak is an acquisition opportunity. Every place a customer goes outside your ecosystem is a strategic vulnerability and a business model gap.

V. Strategic Principle #5: Make Colonies Self-Sufficient — Don't Subsidize Weakness

Once Britain established a colony, they expected it to sustain itself. They were ruthless about this. No colony became a charity case that drained the empire's resources.

Corporate Translation: Every business unit, every product line, every new market entry must have a clear path to self-sufficiency. The moment you are permanently subsidizing a division, you are not running a business unit — you are running a liability. Great military commanders don't keep supply lines open to positions that cannot hold. Neither should you.

Tactical Action: Set explicit timelines for every new initiative to reach contribution margin break-even. Build in the discipline early. If a unit cannot sustain itself within the agreed window, redeploy those resources to where they compound, not where they drain.

VI. Strategic Principle #6: Use Geography — Attack Where Resistance is Low

Britain avoided landlocked nations that would have required fighting through multiple countries simultaneously. They attacked coastlines — high value, low friction entry points — and expanded inward from positions of strength.

Corporate Translation: Don't attack your competitor's stronghold first. Find the underserved coastline — the customer segment they're ignoring, the geography they haven't reached, the use case they've dismissed. Establish a beachhead there. Build strength. Then expand inward.

Tactical Action: Before entering any competitive market, draw a map of where the incumbent is weakest. Where are their customers underserved? Where are their margins thinnest? Where are they least likely to respond aggressively? That's your landing point. You never fight the war they're prepared for.

VII. Strategic Principle #7: The Snowball Doctrine — Engineer Compounding Momentum

Britain engineered a loop that fed itself: conquest → resources → ships → more conquest. They didn't just grow — they built a self-accelerating system.

Corporate Translation: The goal of early strategy is not profit — it's achieving the conditions for compounding. Every early market you enter should open the door to the next. Every customer should make it easier to acquire the next customer. Every dollar of revenue should lower your cost of future revenue. If your growth is linear, you're working too hard. If it's compounding, you've built an empire.

Tactical Action: Design your go-to-market so that success in Market A creates an unfair advantage in Market B. This could be data, brand, relationships, or infrastructure. If winning in one place doesn't make it easier to win in the next, your strategy is a series of disconnected battles — not a campaign.

The Strategic Summary: Britain's Corporate Doctrine in Seven Words

Control the infrastructure. Outsource the risk. Compound everything.

The empire that wins is rarely the one that fights the hardest. It's the one that designs the best system — and then has the discipline to keep building it even when others stop.

The 22 countries Britain never invaded weren't saved by their armies. They were saved by their geography — they were too costly to reach relative to the return. That's the final lesson: a great strategist always knows which battles are not worth winning.

Other Resources

How Britain Built the Largest Empire in History

• The Late Start Problem: Portugal, Spain, Holland, and France all had a head start in exploration. Britain caught up through smarter strategy, not brute force alone.
• The Navy: Their Foundation: Britain made a deliberate, sustained national commitment to building the best fleet in the world — no other country maintained this consistency. They also got a geographic boost: prevailing westerly winds put them "upwind" of Europe, giving their ships a natural advantage before even leaving port.
• The Secret Weapon: Private Business: This is what truly set Britain apart. Rather than funding everything through the Crown, they let private companies (like the East India Company) take the financial risk, expand aggressively, and keep most of their profits — with the government simply taking a tax cut in return. The Crown offered military protection and legitimacy; businesses provided the energy and capital. It was a model no other empire was using at that scale.
• The Snowball Effect: More land → more resources → more ships → more invasions. Conquered territories were expected to be self-sufficient, so Britain wasn't bleeding money maintaining colonies. They taxed goods coming and going, creating a closed economic loop that kept wealth flowing back home.
• Why the Model Won: Basically, Britain treated empire-building like a business, not just a military campaign. Other empires overspent on administration and wars. Britain outsourced the risk, kept costs lean, and let profit motive drive expansion. The slave trade and cheap colonial labor also massively subsidized the whole operation during its early growth phase.

The result: invasion of 90% of the world's countries — long before planes, trains, or modern communication.

Note) Summary and inspirations were drawn from this documentary video. The summary was put together with AI's assistance and reviewed by a human being, me. :)