The ideology of competition

Competition means no profits for anybody, no meaningful differentiation, and a struggle for survival.

When there are two people fighting, usually there is a third person who is gaining from the fight. A good example from history is the competition between Google and Microsoft. They are competing on many products, like text processors or search engines. But the biggest winner of the competition is Apple. The valuation of this company became larger than the other two combined.

We learn to compete early in schools. We are told that we have to be the best to get a good job and be successful. However, is that really so healthy? As we said in the last chapter, in the perfect competition game, there is no profit. Profit occurs when there is a monopoly.

In the 90s, when Peter Thiel was inventing PayPal, there was another company, only 4 blocks away, that was doing exactly the same thing. It was X.com of Elon Musk. They were competing with each other hard, working as much as was possible. Luckily, they decided to meet on neutral ground and establish a 50-50 merger. Thanks to this decision, they survived the crash of the dotcom bubble and created a successful company.

In most cases, competing does not even make sense, as our goal should be building great, new products, not copying what already exists.

Principles to follow