Competition Is for Losers
by Peter Thiel · read the original
Thiel's argument that capitalism and competition are opposites. Profits only survive under monopoly, so the goal of every startup is to escape competition entirely: start with a tiny market, dominate it, and expand from a position of strength.
- 1
Perfect Competition Destroys Profits
Under perfect competition all profits get competed away. A business that looks 'healthy' in a competitive market is often just surviving.
- 2
Monopoly Profits Fund Everything Else
Value created and value captured are different things. The airlines create huge value and keep almost none. Google creates less and keeps far more.
- 3
Monopolists Lie: Framing the Market Big
Monopolists disguise their position by describing their market as the union of several large markets, making a dominant share look tiny.
- 4
Competitors Lie Too: Framing the Market Small
Framing your market as a narrow intersection of categories creates fake uniqueness. Customers choose among substitutes, not among your category labels.
- 5
Start Small and Monopolize
The perfect target market is a small group of particular people concentrated together and served by few or no competitors. Dominate it, then expand.
- 6
The Last Mover Advantage
Grand plans beat first moves. The prize goes to the last mover, the company whose position endures, because most of a company's value lies years in the future.
- 7
Competition as Ideology, and How to Escape It
We compete because we imitate each other's desires, not because the fight is worth winning. The most valuable opportunities sit where nobody is looking.