>However, other than a competitive zero sum game would suggest, I actually don't get sad about losing to others in the pool. Instead, being passed by others makes me want to improve my technique and breathing. They motivate me. [...]
>For me, it was to swim faster and to compare my fitness. [...] And why not - there's entirely nothing at stake either.
If there's nothing at stake (i.e. your savings account and investors' money), then Peter Thiel's "competition is for losers" is not applicable to your personal swimming benchmarks.
>But I'll say this: "competition is for losers" is an unnecessary broad generalization
But Thiel's advice wasn't about a broad generalization for living life. His context was talking about a startup business.
This is probably going to be an unpopular opinion, but I would say that "competition is for losers" probably applies to competitive sports as well.
Most of them have very little room at the top. You're likely going to end up spending tons of money and time and not really get anywhere as a professional athlete. Not to mention the risk of injury. I think swimming is pretty safe, but if you look at mountain biking or, gasp, gymnastics, there are competitive sports where you can really damage your body, and your career will be over after just a few years. Then, there's also the issue that working extremely hard to become say, an olympic gymnast, can actually be damaging to a child's mental health (no time to relax and develop socially like the other kids).
So yes, if nothing is at stake, then why not? Go ahead and try to swim faster than your buddies, you'll probably get fitter in the process. But trying to get to the top of a very crowded field, I think you should only do that if you really really enjoy competition for its own sake and you have some kind of a backup plan.
I think competition in its essence is antisocial. If you are participating with the primary goal of winning, you're participating to make everyone else experience a loss.
I understand structuring social events as competitions adds drama and a sense of excitement, but as a parent I really wish people would think twice about it. Perhaps it's possible to just gather people with similar interests and have them share tricks and stories, without an aggressive agenda...
I don't think competing and winning have to be the same thing, they usually aren't. Winning is just an end result, a lot of times you might not have full control over that result. Competing has a lot more to do with effort and mindset. I play a lot of tennis and watch a lot of tennis, at very high levels a match can be decided by less than 10 shots, and those shots might be less than inches from being in or out. But just because the result is an L doesn't mean the competition wasn't high and some of great value wasn't gained for all parties.
Also, competition being anti-social seems like a strange concept. Unless I am only in competition with myself, I do need participation from other parties, and that in itself creates a social environment, for better or for worse.
- Learn to play well with others, even under stress
- Figure out where they can help, and through that, identify their strengths/weaknesses
- Know that they can demand more from themselves, especially under time constraints and can rise to meet those expectations
It's about them seeing things through, be committed to their friends, showing up for themselves and the group.
The drama of losing will happen, probably a lot, but it's OK, because the sun still rises again in the morning and you get a chance again to play and redeem. Such is life.
This way of thinking, which is very legitimate, largely comes from the mythical idea of "sports teaching life" or "the English army came from the fields of Eton". But I have to say that apart from the extremes of the distribution, I have yet to see, after a life in sports, that much of a difference in personality, attitude, "values" between people who did sports extensively and people who did not. Physically, yes, there are huge differences, and it is more than enough and what I like for my kids.
It is all part of the discourse that sounds good in theory and in fact it is value-driven (it sounds good and it must be good), but empirically it does not come up as solid as expected.
That's because you construe competition purely in terms of dominance or something like that. But friendly competition can also be a means of bringing out your best. In other words, two friends can engage in friendly competition for mutual benefit.
You are competing to get better at something, but you better be detached from the result as well.
And the pleasure of competing at a high level in any sports discipline is second to none. You are not doing it for glory, but for the purity of the experience, and there is nothing quite like it.
I think you both agree with BrianOnHN -- I read "competition as sport" as competition for the purposes of entertainment, enjoyment, and fitness rather than for the purpose of winning.
Right, or at least that's how I had understood it. High market saturation and competition in some niche means that even if you can provide the best product, it will likely be only marginally better, which means the market need is largely satisfied. If you look for niches that aren't highly competitive, but neglected, that is an opportunity to provide a good deal of unmet value.
"Competition is for Losers" is an intentionally provocative statement to illustrate a key point for a business: don't be a perfectly substitutable commodity. It doesn't mean "trying / competing for market share is lame."
I mean, this is pretty much what we learned in our very first microeconomics class.
If you're selling a commoditized product, you're in a race to zero profit (firms undercut each other to gain market share until profit is minimal). If you're selling a unique product, you can command much higher margins.
This is why I choose to live in a large city, despite a lower cost of living and other benefits of living in a smaller city or the countryside (latter being where I spent most of my young adult life).
In cities there is competition to be above the rest. Whether in restaurants, art, nightlife, retail, sports, museums, grocery stores, whatever.
In my experience cultural and even mundane experiences and activities are of a higher quality in larger cities because of competition.
The problem in cities is that as they get more expensive, it is harder for businesses like small restaurants or boutiques to afford rent and labor. They get replaced by larger chains with big economies of scale that can absorb those costs. You end up with the same chains in every city. Larger cities still may be the best, but the best stuff can often be found on the peripheries, not the expensive core.
Tyler Cowan makes a good case for dining at strip mall restaurants in the suburbs.
If you’ve been to NYC, L.A., London, and so on, this definitely isn’t true — this seems true of smaller cities like Cleveland, Tampa, and San Diego.
The largest cities are almost entirely void of most chains, as nobody who lives there wants to eat chain food. (There’s usually some chains in the tourist central area, like Times Square in NYC).
I've lived in LA and it is 100% true. You don't get good Chinese food in the city, or even in Chinatown, it is 20 miles east in Monterey Park. If you want great Vietnamese food, it is 20 miles south in Westminster. Tell me where you think locals hang out in LA and I'll show you the chains that have displaced the smaller businesses. Especially true as Covid shutdowns have hammered smaller businesses. I was just in NYC and Soho which at one point was an interesting part of town, is now dominated by chains. Uniqlo, Nike, Sephora, Sketchers, Ray-Ban. It is a suburban strip mall with better architecture. Do you get better Chinese food in Manhattan or Flushing?
The largest cities are almost entirely void of most chains
241 Starbucks in NYC, and they aren't all there to serve locals.
I was going to add a note that Starbucks is basically the one exception to the rule, in almost any city in the world. :)
Look at the number of other big chains in NYC, like Chick-Fil-A, Burger King, Krispy Kreme, Olive Garden, Buffalo Wild Wings, and so on, and you'll see what I mean.
If you ever visit NYC again, I can provide a long list of amazing local restaurants that will beat anything in suburbs regardless of neighborhood! I've lived in many places, and the idea that suburbs food will beat city food, or that cities are all 'big chains,' feels like a distinctly small-American-city sentiment. It literally couldn't be further from the truth with regards to NYC.
> Whatever, no one said that - that's just a straw man.
The comment was in response to your comment on Tyler Cowen's argument for eating at strip malls in suburbs.
> Do you think there is more interesting and authentic Chinese food in Manhattan or Flushing?
There's quite fantastic Chinese food in both. It's certainly more expensive in most parts of Manhattan, but the above argument that the expensive parts of New York City is a bunch of large chains is hogwash! There's great, expensive restaurants. Flushing has great, cheaper restaurants.
The crux of my point is that large cities do not end up dominated by large chains. In fact, walking through NYC or London, you'll see way, way, way less chains than driving through the suburbs.
> They get replaced by larger chains with big economies of scale that can absorb those costs.
Why are the larger chains better able to absorb the costs? Don't they still have the same rent and labor costs? Besides, smaller towns seem to suffer from chains just as much in my experience.
It feels like a particular problem in the US, though Europe has too many chains for my liking as well.
I wonder what laws/regulations are part of this problem, and how they might be changed if we want more independent shops.
Generally good advice there- Some products have price sensitivity among buyers that stops them from maintaining margins when the environment is too high cost. If you can’t go upscale, you’re going to have to cut costs to the bone and/or leverage scale economics.
Oh I have completely the opposite experience. Cities generally have less quality. Precisely because of the massive nature of cities. There is no local quality foods for example because mega-corps are much more efficient and most people choose price over quality. Most forms of entertainment suck because of overcrowding. Just look at nightclubs with their bouncers.
> Cities generally have less quality. […] There is no local quality foods for example because mega-corps are much more efficient and most people choose price over quality.
If you've visited large cities and only found mega-corp food chains and no local quality foods, that's 100% for lack of trying.
What large cities don't have quality food available?
I grew up in the deep suburbs and currently live in one of the largest cities in the US. The difference in variety when it comes to both supermarkets and reasturants is hugely in favor of the city. Growing up there were three grocery stores within half an hour and they all had basically the same items. If you wanted something unusual you'd have to order it. In the city I can head to the Asian market or one of multiple farmers markets or one of the multiple Co ops around me. There are at least 50 reasturants I can get delivered to my house and while some are large chains or fast food, most are not.
When I visit my friends in the suburbs the options are basically limited to American style Chinese, Pizza, or a large chain like Applebee's.
Chicago – More than 500,000 residents (mostly African-American) live in food deserts, and an additional 400,000 live in neighborhoods with a preponderance of fast food restaurants and no grocery stores nearby.
New York City – An estimated 750,000 New York City residents live in food deserts, [27]while about three million people live in places where stores that sell fresh produce are few or far away. [28] Supermarkets throughout New York City have closed down in recent years due to increasing rents and shrinking profit margins, but the disappearance of urban grocery stores has had the most serious impact on low-income communities, especially those that are predominantly African-American (such East/Central Harlem and North/Central Brooklyn).
There's important value in both points of view. So Thiel's point is that competitive businesses, at best, lead to thin margins. Startups should avoid competition, go into a new space, build a moat and enjoy fat margins.
But there's a flip side to that, which is why monopolies are practically synonymous with rent-seeking. Without competition, companies tend to stagnate and the products are objectively worse. This makes the company vulnerable to disruption and is obviously bad for consumers.
There's definitely a sweet spot: some competition so things keep moving, but enough margin that the companies competing are have enough slack to invest in research and hire the best people etc. Companies don't produce their best work when they are at the razor's edge: accountants are running the show, employees feel the squeeze. You know the deal, Malthus covered it pretty well.
The secret is that any given market is not a one dimensional ramp into commodities competing over price. The world is pretty much infinite dimensional from the perspective of creating product differentiation, spinning off new products etc. If you're looking ahead and the only move you see is cutting prices to beat your competitor, you've trapped yourself.
That's where the analogy to competition breaks down, sports are constrained to be one-dimensional competitions. Markets aren't.
I think that's missing the point. Competition is fun for humans (hence sports). But domination of a market is better than continuously competing and struggling for a business. Incidentally though i dont think this business mantra has benefited society. Ruthlessly going after a market and then keeping it stagnant is certainly not progress, but it's how things are done in today's tech and elsewhere.
Basically starting a restaurant in Manhattan is a bad business because of extreme competition competing away all of the profits.
You want a business where you have a moat to generate capital you can reinvest in the business. Not to stagnate others, but because it can lead to better outcomes and better businesses.
Another example where competition has lead to bad businesses are airlines. They all pretend they’re different - but they’re basically all competing on race to the bottom pricing and the experience on all of them suck.
They're cheap certainly, but they're not an example of a good idea for a high growth startup. I also wouldn't personally call the experience great as a user either, but that's subjective.
If you're trying to start a new company, an airline would probably be a bad idea - unless you're bringing something new to the table that others can't easily compete on (like supersonic jetliners maybe, eg the YC company Boom - though even then I don't think they're planning to run their own airline).
The airlines all pretend they're special and unique, but they're basically commodities offering similarly bad experiences (imo) that aren't very differentiated.
Meanwhile when companies are more dominant, like Google, they constantly point to their tiny competition (Duck Duck Go) and talk about how competitive the space is - the opposite of how airlines behave.
If you're trying to build a startup you want something that leads to a Google like outcome, not a United Airlines like outcome.
its a reductionist argument to measure results purely in monetary terms, and again only in MY monetary returns. It reduces system to self, basically. Single organism maximization of "food/fuel" is shark-like, essentially; hint, that is not a compliment!
At crucial junctures in history, the exact wrong move prevails in so many cases, leading to preventable and sometimes tragic consequences. So you the reader really believe that by maximizing your own pile of coins that society prevails? or, you believe that you should be the alpha primate, and that the decaying and treacherous world around you is for the weak? Meanwhile, this man put Palantir Inc on the USA ? Didnt the USA have 'freedom' in the charter? its hardly worth considering in my mind, this Randian extremism, but here we are, so I type.
I suggest getting off of the addictive habits/substances, let go of Ayn Rand, and evolve instead of amplifying this nonsense. The choice is yours.
You're arguing a strawman unrelated to what I wrote.
When figuring out what ideas are good potential options for startups (particularly high growth startups) - you want to choose one where there's a large need and where you have something special that others can't easily replicate/compete away. That's part of the foundation that makes for a good idea (zero to one is a good and a short read - it's worth just reading it).
Your political spin is assuming too much and clouding your interpretation of what I wrote (imo). I also think you likely have a misunderstanding of what Palantir is and what it does, but that's not something I can really address.
Competition is for losers is an observation how many people can win a race vs how many people can lose. Only one can win, the rest lose, which is by definition at least 50% of the participants.
It’s true that competition can be motivating sometimes, and there are lots of great examples of startups beating the competition. Thiel isn’t saying don’t try hard, he’s just saying think hard about picking the race that you’re more likely to win.
This is what I understood from Peter's main point:
- If you're copying or offering relatively the same service/solution as other incumbents, then your startup is a loser (Don't lie to yourself)
- If you want to be a status quo challenger startup but your idea is a copy or similar to another existing provider, then your startup is a loser! (Stop pretending it's your idea but you know you stole from someone else)
- If you don't have an opinion or outlook for a better future; solving real problems; or inventing solutions for problems people/business never knew they had but most appreciate, then your startup is somewhat a loser. (Not everyone should become an entrepreneur, we need a lot more employees!)
Pretty general yes, but the notion is to challenge the creative juices and encourage taking risks. No risk, no reward!
Peter doesn't like "wanna be's" ... Are they a loser by nature for copying ideas, as supposed to original minds? There are a lot "entrepreneurs" with ZERO imagination/creativity, and most constantly wonder why they cannot crack it. So maybe there's some truth to it!
But then again we've seen copycat startups succeed as well!
Bear in mind that his perspective is as an investor. He doesn't want to invest in something that will make the founder rich and happy. He wants to invest in something that will make him rich and happy. There's a huge difference.
He's negative about copycat startups because they rarely make enough money to make their investors happy. He likes monopolies with product:market fit because they generally make investors happy.
However, as a founder, what he likes should be waaaay down our list of priorities. Our happiness and definition of success may not match his. In fact it almost certainly won't. Follow our own dreams, not Peter Thiel's.
I like the author's take on his new thing: don't sell the vision and get investment. Instead, just execute and see where that goes. I look forward to seeing where that goes :)
I have quit my software engineering job to focus full time for the next 4-5 months on creating software in some fairly crowded spaces. I’m banking on my “piece of the pie” theory that if I can just get even a tiny piece of the pie (ie market share, across all of my offerings) that perhaps I can earn enough to be self sufficient and pay the bills at least. The most important factor I reckon is the execution of development and marketing objectives, but it really does feel like a gamble at the moment.
some very large companies have been created in verticals that were already crowded, rather than wide open markets. In these cases, you don’t have to educate the customers, and you don’t have to create new budget line items. You can just replace what is there. A great example is Zoom, which entered a market with webex, gotomeeting, bluejeans, etc.
I agree verticals is too simplistic, but the example of zoom is an interesting one because it still had the differentiator of being consumer focused (which brings a whole list of attributes like price sensitivity, ease of use etc) vs the incumbents that where very enterprise focused.
You still need something unique to do well usually, though that unique thing doesn’t have to be the idea or space.
An organism, individual, species, company, etc. can survive effectively via adaptive radiation into niches where there is less, little, or no competition. This is an effective strategy. However, at a certain point lack of competition leaves them vulnerable to another species, company etc. that has evolved under intense competition.
There aren't any winners in steady state competition, that is, until your average run of the mill grey squirrel is introduced into regions (markets?) where the existing scatter gatherers didn't have any competition. Then they dominate and drive all the competition to extinction.
Sometimes capital accumulation can let a non-competitive company survive the market entry of a competitor that operates more efficiently in a way that is similar to how a species with a large population might have a few members that can compete effectively. But at the end of the day those fat margins will eventually disappear.
This seems to tie into those 'survival of the fittest' claims of the Social Darwinists as an explanation for the distribution of wealth and power in human societies. In reality biological evolution is just 'survival of the fit enough' and is far more complex than these simplistic concepts."
Let's say we rephrase the question along another line:
"Is Cooperation for Losers?"
"Ayn Rand says yes. It's a brutal struggle of all against all for domination and power, and cooperation is only a trick you use to infiltrate and destroy your rivals in the quest for global domination and ultimate power!"
I have a sneaking suspicion that a lot of these arguments are really about the fact that humans evolved from primate ancestors whose social structure was based around alpha dominance in small tribal groups, and that's really the motivating force behind a whole lot of people in business and politics. Unconscious drives and so on.
The newer science says that the idea of an alpha is a myth.
I don't think we have have the conceptual tools yet to describe the specific shape of power a being might have, but it is simply a lot more complex than this -- a combination of cooperation and competition and other relationship positions we haven't thought of.
>For me, it was to swim faster and to compare my fitness. [...] And why not - there's entirely nothing at stake either.
If there's nothing at stake (i.e. your savings account and investors' money), then Peter Thiel's "competition is for losers" is not applicable to your personal swimming benchmarks.
>But I'll say this: "competition is for losers" is an unnecessary broad generalization
But Thiel's advice wasn't about a broad generalization for living life. His context was talking about a startup business.