Know Your Competition

Almost all human accomplishments are, directly or indirectly, judged in competition with others. This is most directly true in domains such as sports or entertainment, where awards and trophies go to some, and not others.

What matters here isn’t absolute performance, but relative performance. Absolute performance can often go up and up, yet because it rises with competitors as well, the standards of what counts rise in lockstep. Before Roger Bannister, running a four-minute mile was thought nigh-impossible. Now it happens regularly. The standards get raised, so what determines success as a runner goes up with it.

Even in domains that aren’t directly competitive, there is still a broader, implicit kind of competition. Singular accomplishments are judged on their impressiveness, indirectly, through a complex comparison with other kinds of accomplishments. Learning to speak another language fluently is moderately impressive in North America, where monolingualism is common. But learning to speak several was common amongst the educated elite a few centuries ago in Europe. Thus the friend that speaks a couple languages fluently impresses more in modern America than it would have in seventeenth century France.

I’d argue that even the most private, resistant-to-comparison situations tend to have subtle, unconscious competitive layers. Consider romantic relationships. Only the most crass compete in competitions over who gets the most dates or has the best spouse. Yet, I believe a lot of relationship happiness comes from beliefs as to whether we have a good spouse (in terms of looks, personality, faithfulness).

Since competition, direct or indirect, has a large influence on what we qualify as a success, I think it’s worthwhile to examine. In particular, I think there’s different types of competition and they imply different things we should do about it. If you see all competitive domains the same, you’re bound to draw incorrect conclusions about what action to take.

Level One: Competing Against the Middle

The first type of competition is competing against the middle. This is when being better than average is enough to count as success.

In a career situation, being an employee or freelancer is, in many cases, a competition against the middle. This is because the scale at which people can compete is relatively small, and so the very best performers are often removed from competition because demand for their talents is too high compared with what they can provide.

A personal coach or therapist competes in this domain. You don’t need to be the best possible coach to succeed, because the very best coaches are completely saturated with demand. Because their success can’t scale easily, you can still compete even if you aren’t the best.

This is true in business and career settings, but this level of competition is also present in many other sorts of achievements. Live music, restaurants and original artwork also have limited scope for the greatest successes. Most interpersonal forms of impressiveness (charisma, fashion, humor, etc.) are also limited in this way because people experience them through face-to-face interactions, therefore you’re unlikely to ever be compared on funniness with Chris Rock, or compared on charisma with Bill Clinton, since most people will never have an extended interaction with those people.

With this level of competition, success can often be achieved simply by putting in the effort. Although some skills are possibly more learnable than others, the bar of competition is relatively low, and so it’s not unimaginable for someone with low or moderate talent to compete well here, provided the interest and commitment is there.

Level Two: Competing Against the Top

The second level of competition is competing against the top. This happens when you need to be one of the best in your category to succeed.

Blogging is this kind of competition. As is running any business that sells products. Now, the most successful people can compete with you directly. Readers of this blog can read anyone else’s blog on the planet, so it’s not enough that I be the best writer in my local environment, I need to be the best of your options to attract your time away from people like Tim Ferriss, Malcolm Gladwell or Paul Krugman.

This kind of competition occurs whenever your competitors can scale. Live music can succeed because big successes need to have big concerts, which lose some of the intimacy and connection with the band that a small show can provide. However, once you start selling or streaming your music, then there’s no difference between you and famous bands, so the competition goes up to this level.

Similarly, original art can compete locally, but prints and reproductions compete here as well. The extent that people don’t care about original art can also mean you’re stuck competing at this level whether you like it or not.

This isn’t the highest form of competition though, because niching and differentiation can allow for many more than a single player to stay in the game. I can compete as a blogger against Ferriss, Gladwell and Krugman because my writing isn’t quite like theirs, so it’s possible you might like to read my blog, even if objectively I’m less popular or lower quality.

With this level of competition, it only really makes sense to compete if you’re going to devote yourself completely. You should also consider competing only in areas where you have some natural advantages. In other words, don’t try to compete in an area here if your talents here are low compared to other talents you possess, simply because it is going to make hard success even harder.

Level Three: Competing Against The Singular Best

The final level of competition is when you are competing against the best possible person. This happens when there are weak barriers between categories, so someone who dominates in one niche will likely dominate in all other related niches, leaving little left for you.

Investing is this kind of competition. To earn a risk-adjusted higher rate of return than the market, means that you need to have actionable information about why that asset is mispriced. However, all other investors in the world can potentially do the same—including well-heeled Wall Street financiers with insider information, supercomputers and mathematical geniuses.

This doesn’t mean it’s impossible to beat the market, just very hard. You have to be able to answer not only why a particular asset is priced incorrectly, but also why nobody else has noticed it.

Of course, this doesn’t mean one shouldn’t invest money—the market still has a positive rate of return, so passive investing still makes sense for many. Active investing might also make sense in cases where these assumptions are violated (say the potential pool of investors are limited, or highly-skilled investors are ignoring the opportunity because it is too small, etc..)

With this level of competition, it rarely makes sense to compete at all. If you are going to compete, then there needs to be an overwhelmingly strong rationale for why you are, in fact, the best person in the world, in order to succeed. If that rationale isn’t present, being #10 or #115, which would nearly guarantee success in other contexts, is still a failure.

Example: Physics Success

One way to understand these three levels is to look at success in a field like physics.

Learning physics is a level-one success goal. Implicitly there is some relative performance standards because if physics got easier to learn, people would probably expect somewhat more learning in order for you to qualify has having above-average physics knowledge.

To see the competition inherent here, remember that a thousand years ago nobody had the physics knowledge of the average high-school senior. Most of us have a general gist about ideas like inertia, that electricity and magnets are somehow related or that the earth orbiting the sun is because of the same force as apples falling to the ground. The fact that such general insights don’t count as “knowing” physics is a sign of a relative increase in standards.

Becoming a physicist is a level-two arena. Now, it’s not enough to know physics better than average. You need to know it better than the “top” physicists. You can specialize in narrow areas of research, and thus eke out a living being merely in the top hundred thousand or million physicists in the world.

Winning a Nobel-prize for physics is now a level-three goal. It’s not enough to be good. It’s not even enough to be the best in your subfield. You need to dominate a large and encompassing category to win the prize.

One can see how advice for entering physics might change as one considers what level of success is being sought. If the person has middling or low talent, then level-one success is still clearly achievable with effort. Level-two success might be possible with minor talent, but is more dubious with low talent. Level-three success is basically impossible without high talent, luck and effort.

Optimism or Pessimism? Talent or Effort?

The net outcome of these different types of competition is that your view on the possibility of success will likely flip, depending on which you’re examining.

Level-one competition, which is restricted to a small pool of individuals, and often has the best performers removed because of their limited scope, is an area where most of your competitors may not be trying very hard. You can be more optimistic about success here, relatively speaking, because the barriers to winning the competition are a lot lower.

Similarly, I believe effort, attitude, gumption or any of the other success literature staples is probably quite useful here. Since your competitors may not be setting clear goals, or working very hard, it is often possible to do quite well just by trying harder than most and using a decent, proven strategy.

Level-two competition, which has a much larger scope, but is still limited because there are many different categories and niches one can be the “best” in, is much harder to be successful at. Here, I think effort must be combined with talent or aptitude to be optimistic about success. Success overcoming low natural ability is possible, but it’s no longer the case that you can succeed just by working hard. Your competitors are working hard too, and if they’re naturally better than you, that will only compound their advantage.

In this area of competition, differentiation and specialization is key. You want to quickly find the area you can outperform everyone, and that often means trying lots of stuff until you can find something you can truly be world-class at. This involves both tons of hard practice and testing to find out which skills and assets come easier to you than others. Strengths + deliberate practice = possible, though not guaranteed, success.

Level-three competition is a completely different beast. Here, I’m much more pessimistic about success. Obviously success is possible here, because someone must be the winner. But no longer can you make general statements about everyone being a potential winner. Success here inevitably requires extreme effort and extreme talent.

Similarly, if there are structural advantages that accrue to some people based on certain factors (say where they went to school, access to key mentors or investors) it may be nearly impossible for anyone without those things to succeed here.

Success stories surmounting obstacles to succeed at this scale are less common than ones in which the person had everything going for them and it was still incredibly difficult. If you do read about a case where someone had a high barrier, and overcame it nonetheless, it is more often that their other qualities (talent or effort) were so high as to be outliers. If you are not just more talented than average, but a standard deviation more talented than anyone, then overcoming extreme barriers to success may be in the cards.

First, Know Your Competition

Looking at these competitive ranges, you could either describe me as a self-help optimist—believing in the power of effort, goals and sound methods to be the ultimate determiner of success—or you could see me as an unabashed cynic—believing that there’s no possibility of success without extreme talent and luck.

However, I think if you analyze the type of competition you’re facing, it’s easier to see how the situation can look very different for different people.

This reversal of fortunes and the level of competition changes, is also one of the reason I get frustrated with book titles like Talent is Overrated or ones that focus on genius or inherited advantage to determine success. My feeling is that much of the conversation around these ideas neglects the essential competitive dimensions, and therefore misses the most crucial aspect in deciding whether something depends highly on fixed talents or not.

I think being able to think about the kind of competition you’re facing is a much more powerful mental model than dividing success into “effort/experience” and “talent/privilege.”

Don’t Like the Competition? Change It

For one, you can often change the type of competition you face. For many businesses, starting out in consulting is a softer move than trying to go immediately into products, since the former is level-one competition and the latter is level-two. Alternatively, you may aim for uniqueness (level-two competition) rather than try to be the best in the world (level three).

It goes without saying that competition is just one variable that explains different degrees of success, but it isn’t the only one. Some level-one arenas are still notoriously hard (such as running a local restaurant) and some level-two domains have enough niches to sustain quite a few people in the “top” (such as blogging). As such, it’s always possible that a level-one domain is actually harder than a level-two, or that a level-two is harder than a level-three domain.

However, the level of competition should still provide a useful lens for estimating requirements for success. It is also more accurate within-domains than between-domains. Opening a successful restaurant chain (level-two) is harder than running a successful restaurant (level-one) even if running a successful restaurant is harder than a level-two goal in a completely different field.

Since success is often defined relatively, either directly or implicitly, understanding the type of competition you’re facing is a stronger predictor of the requirements of success than almost anything else.

Are Successful People Just Putting in More Effort?

As someone who writes advice for a living, I’m always interested in the ways advice works, how it gets distorted and what the typical advice-receiver can do about it.

Recently, I came across some research that suggests a new way advice-givers aren’t being totally honest with you: paternalistic advice bias.

Here’s the abstract, from the journal article:

“Despite the near universality of the maxim that one should treat others as one ought to be treated, even well-intended advisers often advise others to act differently than they choose for themselves. We review several psychological factors that contribute to biased advice. Absent pecuniary motives to the contrary, advice tends to be paternalistically biased in favor of caution. Policies that would intuitively promote quality advice — such as making advisers accountable, taking advice from advisers who value the relationship, or having advisers disclose potential conflicts of interest — can perversely lower the quality of advice.”

Biased Advice Leads to Excess Caution

The idea here makes intuitive sense. An advice-giver, whether its someone giving advice in the form of a blog article, or a friend or mentor suggesting a course of action, is not merely transmitting what they know from their own experience.

Instead, there’s a subtle cost-benefit calculation that has to be done when giving advice. And here, there’s a big problem: the flaw of bad advice. If you give someone advice that ends up going disastrously wrong, you might get blamed for that. And the blame, reputationally speaking, might be worse than the benefit of helping you win big.

To use a purely hypothetical example, imagine you have to ask a trusted friend for advice about quitting your job to start a business. Suppose this person knows, privately, that there’s a 30% chance you’ll be a big success and 10% chance you’ll lose quite a bit of money, with the remaining 60% of the time the change is relatively neutral.

Now, if this trusted friend were doing the calculation themselves, they might value a 30% chance of big success more than a 10% chance of a financial blunder. So, privately, that person might go ahead with it anyways.

However, as an advice-giver, they may recognize that in the chance you’re successful you might only thank them mildly for encouragement, a small benefit, but if they go bankrupt they may blame you for goading them on, causing deep resentment or worse. As such, you may advise caution if this person is really on the fence about the decision.

Is There an Anti-Effort Bias in Some Advice?

This finding about advice was risk-aversion, but I can see how it could possibly extend to effort-aversion as well. If the effort itself forms a type of risk, you might caution a middle-route of reasonable effort as opposed to the high-intensity path you might personally take.

I may be over-generalizing the findings here, but this also makes intuitive sense to me. Expending a lot of effort is itself a kind of cost. Just as I could imagine being cautious advising someone to invest hundreds of thousands of dollars in an uncertain investment, I might also imagine being cautious telling someone to invest thousands of hours of effort in a project which isn’t guaranteed to work out.

This suggests to me the possibility that increased effort may be dissuaded against if it constitutes a greater risk.

Alternatively, if effort mostly guarantees success, then more effort would reduce risk and be (perhaps) overly recommended. How this affects advice might depend on the reliability of results after effort. People may recommend working hard at a new exercise plan to get in shape, which is a low-risk move, but not recommend working hard at becoming an actor or actress, which is high-risk.

Anti-Effort Posturing

It’s not related to the study mentioned earlier, but another plausible way advice can seem to reduce the emphasis on effort is when the person who is successful has an incentive to downplay their own effort invested.

This bias doesn’t seem to be one-sided. I think we can all think of situations where people have exaggerated the contribution of their personal efforts (such as the son of a U.S. president boldly claiming to be a self-made man). Others are humble and dismiss the idea that their (very obvious) hard work had anything to do with their successes.

Most people tend to attribute this bias to personality. Some people are braggarts who like to champion their hard work and effort, when they really don’t deserve the credit. Some people are modest and gracious and would rather have circumstances or other people get the acclaim.

While personality may be a factor, I prefer to see it another way. People try to maximize their appearance. Sometimes, claiming to have invested a lot of effort makes sense, especially if it can distract from less praiseworthy causal factors in success such as connections, wealth or inheritance.

However, sometimes claiming to have invested a lot of effort makes you look worse. You would appear more magnanimous by suggesting luck and feigning humility. In some endeavors, suggesting raw talent or intelligence is seen more highly than investing a lot of effort. Presumably the latter implies you made different choices, and therefore have different values, which can sometimes be a source of distrust or resentment itself.

My own experience has shown that in my personal life (less so professionally) there’s a strong social incentive to downplay effort. Being busy and overworked is okay (that’s circumstances), but one must be more careful advertising a self-inflicted ambition that requires immense effort (that’s different values).

Many people I’ve talked to who have succeeded at ambitious projects speak similarly, saying that, while working on such projects, they’re often given a rather uncomfortable reception from people who don’t exactly look up to their intense efforts. It seems weird, forced or unnatural, and they often politely question why this person would bother putting so much effort in.

What This Means for Advice

This all suggests to me, at least, that there’s a large possibility of a fairly invisible layer of people around you putting in a lot more effort than is deemed socially reasonable for the pursuit they are after, and often succeeding at it too.

Advice, especially when passed from person-to-person, may be overly risk-adverse, and encourage low-effort strategies for pursuits where success is uncertain.

The combination of these effects, if one doesn’t see through it, can be to fatally underestimate the intensity and effort successful people invest in their goals which inevitably leads to them doing well.

Ultimately, I think the magnitude of this effect will depend on how big a role these underlying factors play. More certain goals will probably show less anti-effort bias. Goals which are more conventionally appropriate to show extreme ambition in (athletics, academics in many settings, high-effort/high-status career paths such as medicine, etc.) will likely show less of this bias. In these cases, the bias might even reverse with successful people actually working *less* hard than you think.

However weird, risky goals like starting a new business, ultralearning projects and high-variance career paths, might have enough of the opposite bias that success for many people is inhibited simply because they don’t realize how hard successful people are actually working at those goals.

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