There are two myths as old as time: 1) competition is healthy; 2) winning requires outdoing the competition. Both ideas take root during our formative years in school, and color our decision-making for the worse.
Why competition is (often) unhealthy
Schools drive and reflect our obsession with competition. We are taught to memorize textbook answers to win the prize of higher grades. The way to outdo each other is to do more of the same.
We then apply this to the real world. We watch competitors closely, analyze their playbook, and try to outdo them at their own game. If they have three cool features, we copy them and add a fourth. If they charge $10/month, we charge $8/month.
The dark side of competition is that it boxes our thinking. It makes us operate under zero-sum, destructive terms when the world disproportionately rewards positive-sum, creative moves.
The upside of competition is that it can break through complacency and help us get our act together. If we’re novices, studying the competition is an effective way to level up. But it’s merely the first step. To do anything meaningful, we need to ultimately step out of the shadows of others and into our own.
Aping the competition also has a big psychological drawback. If people already believe the competitor has the fastest offering, convincing them the story is false and that you, in fact, are the real deal is a hard sell. People don’t like to admit they’re wrong. People also don’t respond to marginal improvements. Switching requires an order of magnitude better, 10X better.
There is a viable path off the copycat treadmill. Observe the status quo, and go in the other direction. Tell a different story. If your competitor is the fastest offering, create the simplest offering. The most ideal position is one in which:
- You are uniquely positioned to execute
- That’s very difficult, ideally possible for a competitor to respond to
- And solves a painful, but overlooked problem
There are times when hand-to-hand combat makes sense, but it rarely ends well for the smaller player. Let’s examine why.
David and Goliath
The ancient story of David & Goliath shows up in many modern forms. David was the underdog against the giant, Goliath. Goliath was almost 7 feet tall, hardened in battle, and equipped with heavy armor. David was a small shepherd boy with a bag of stones and a sling.
The battle ended in a matter of seconds. Goliath taunted David, but David stayed focused. He slung the stone right at Goliath’s forehead, instantly knocking the giant down. Some chalk it up to luck, but a closer study of David reveals he regularly fought off lions and bears with his slinging skills.
David did not come close to having the brute strength and size of Goliath, but power comes in many forms including being fast and redefining rules. Here’s a modern-day example.
Amazon and its challengers
Shopify is a powerful testament to the flourishing of e-commerce beyond the Amazon walled garden. It’s also an exercise in genius positioning.
Rather than creating another Everything Store to go up against Amazon, Shopify built tools to equip the millions of entrepreneurs who want to start their own site and control their own destiny, or at least hedge against a sole distribution channel.
By doing so, they’ve made a move that’s impossible for Amazon to replicate because their existence is based on keeping all listings under…. well, Amazon. Amazon benefits from aggregation. Shopify benefits from diversification.
Another often overlooked outcome of the rise of Amazon is the flourishing of local stores. As big-box stores take their final gasp of air, local stores are growing their share of the retail market. How is this possible? As Amazon pioneered infinite shelves, they decimated the big-box stores who were the analog Everything Store. Local stores, on the other hand, are small, nimble, and capable of providing a differentiated experience.
Local stores are part of the anti-Amazon alliance. Rather than having comprehensive, lifeless warehouses, local stores offer the opposite: curated selection of unique goods that symbolize the community.
It pays to be far away from the behemoth lest you get trampled in its wake. It also pays to be in overlooked problem spaces.
In search of 10X better
The idea behind solving painful and overlooked problems is that it’s easier to demonstrate value where there is none previously. Theoretically, any working solution is infinitely better if there is nothing to compare it to. And the users you serve will be massively grateful even when you make mistakes.
It’s also possible to make 10X improvements on existing problems. Google’s results were an order of magnitude better than any competitor. PayPal made eBay much better by allowing sellers to get paid quickly rather than wait for a check to clear.
To gain traction in a known problem space, however, the new solution has to be a no-brainer compared to the status quo. This only happens by taking an unconventional approach, not doing more of the same. If there’s enough interest, I plan to cover how to find these secrets in a future post.
There are Davids and Goliaths all around us. In fact, most of us and the products we build start off as Davids. The most rewarding path is not head-on competition with everyone else. Instead, it’s finding our own version of the sling and stone.