Why Beating the Competition Will only Make you a Winner in a Losing Game
Competition is for losers
To be a success you need to invent a new game and master it
It’s as simple as that. The path to prosperity is one that you walk alone — what you must seek to create is a monopoly . Internally this should always be your goal. Externally you must project an impenetrable facade which bemoans the relentless competition you encounter every single day.
That is how every large business exists today
In many ways, the big 5 — Amazon, Apple, Facebook, Google & Microsoft — have diversified into competition allowing their main areas of profit remain standalone monopolies.
- Amazon is the unquestioned monpoly of online sales + AWS
- Apple is the unquestioned monopoly of hardware + the App Store
- Facebook is the unquestioned monopoly of user data + messaging
- Google is the unquestioned monopoly of search + email
- Microsoft is the unquestioned monopoly of desktop + enterprise
The rest of their activities all overlap by design
That is perfectly defensible platform to operate all counterclaims of monopoly from. Apple and Facebook operate in messaging. Facebook and Microsoft oversee social networks. Amazon and Google compete in the cloud. Google and Microsoft are adversaries in utilities for enterprise. Google and Facebook compete over advertisement.
If you listen to them that is what they will tell you
You won’t catch a whiff of monopoly from the most monopolistic of practices. We are continually force fed information relating to anti-trust and competition laws but how many companies have ever been broken up or prosecuted under these? None. All the might of US government couldn’t break up Microsoft.
That is where you must look for your investments
They are simple to spot. The companies that protest most frequently and loudest about not being monopolies are always monopolies. When companies try to convince you they aren’t something it is to convince prying eyes not to look behind the curtain.
But it is where you must develop your ideas
As soon as a company insists they aren’t a monopoly I start watching them — more often I invest in them
It’s not just about competing on an uneven playing field, it’s about creating the rules of engagement where there are no competitors. That is the reason for the rapidly accelerated growth of modern startups. They are trying to achieve escape velocity to allude the capture of competitions black hole.
Competing for diminishing return is idiotic
That is what most businesses do — they compete for a piece of the pie — succumbing to consumer demand for lower margins. Monopolies never conform to consumer expectation, they set the rules of engagement. They control their end of the bargain and insulate themselves by building canyons around their business model.
The key to success is to grow so quickly that you discourage anyone from competing with you. You insulate yourself through a combination of exponential growth and customer adoration from your product. That is backbone to your monopoly.
The key understanding is that a monopoly does not only arise in markets where there is one business
In the early 2,000’s there were several search engines — Yahoo, Ask, Lycos — but exponential growth enabled google to overcome them all. If you have a differentiated insight or can improve on an existing product by an order of magnitude you can outgrow the competition rapidly.
Growth is a moat
What’s a patent if not a monopoly backed by the government? There are several means to achieving the same goal
Monopoly should always be your intention when starting a business
But you can only achieve that with continued customer support
That is the challenge. You need support from the people who may benefit from you not being a monopoly to remain one.