{"id":7263,"date":"2017-12-05T18:16:30","date_gmt":"2017-12-06T01:16:30","guid":{"rendered":"https:\/\/www.scotthyoung.com\/blog\/?p=7263"},"modified":"2019-03-08T04:25:24","modified_gmt":"2019-03-08T12:25:24","slug":"know-competition","status":"publish","type":"post","link":"https:\/\/www.scotthyoung.com\/blog\/2017\/12\/05\/know-competition\/","title":{"rendered":"Know Your Competition"},"content":{"rendered":"<p>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.<\/p>\n<p>What matters here isn\u2019t 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 <a href=\"https:\/\/en.wikipedia.org\/wiki\/Roger_Bannister\">Roger Bannister<\/a>, 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.<\/p>\n<p>Even in domains that aren\u2019t 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.<\/p>\n<p>I\u2019d 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).<\/p>\n<p>Since competition, direct or indirect, has a large influence on what we qualify as a success, I think it\u2019s worthwhile to examine. In particular, I think there&#8217;s different types of competition and they imply different things we should do about it. If you see all competitive domains the same, you&#8217;re bound to draw incorrect conclusions about what action to take.<\/p>\n<h2>Level One: Competing Against the Middle<\/h2>\n<p>The first type of competition is competing against the middle. This is when being better than average is enough to count as success.<\/p>\n<p>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.<\/p>\n<p>A personal coach or therapist competes in this domain. You don\u2019t need to be the best possible coach to succeed, because the very best coaches are completely saturated with demand. Because their success can\u2019t scale easily, you can still compete even if you aren\u2019t the best.<\/p>\n<p>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\u2019re 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.<\/p>\n<p>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\u2019s not unimaginable for someone with low or moderate talent to compete well here, provided the interest and commitment is there.<\/p>\n<h2>Level Two: Competing Against the Top<\/h2>\n<p>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.<\/p>\n<p>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&#8217;s blog on the planet, so it\u2019s 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.<\/p>\n<p>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\u2019s no difference between you and famous bands, so the competition goes up to this level.<\/p>\n<p>Similarly, original art can compete locally, but prints and reproductions compete here as well. The extent that people don\u2019t care about original art can also mean you\u2019re stuck competing at this level whether you like it or not.<\/p>\n<p>This isn\u2019t 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\u2019t quite like theirs, so it\u2019s possible you might like to read my blog, even if objectively I\u2019m less popular or lower quality.<\/p>\n<p>With this level of competition, it only really makes sense to compete if you\u2019re going to devote yourself completely. You should also consider competing only in areas where you have some natural advantages. In other words, don\u2019t 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.<\/p>\n<h2>Level Three: Competing Against The Singular Best<\/h2>\n<p>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.<\/p>\n<p>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\u2014including well-heeled Wall Street financiers with insider information, supercomputers and mathematical geniuses.<\/p>\n<p>This doesn\u2019t mean it\u2019s 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.<\/p>\n<p>Of course, this doesn\u2019t mean one shouldn\u2019t invest money\u2014the 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..)<\/p>\n<p>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\u2019t present, being #10 or #115, which would nearly guarantee success in other contexts, is still a failure.<\/p>\n<h2>Example: Physics Success<\/h2>\n<p>One way to understand these three levels is to look at success in a field like physics.<\/p>\n<p>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.<\/p>\n<p>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\u2019t count as \u201cknowing\u201d physics is a sign of a relative increase in standards.<\/p>\n<p>Becoming a physicist is a level-two arena. Now, it\u2019s not enough to know physics better than average. You need to know it better than the \u201ctop\u201d 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.<\/p>\n<p>Winning a Nobel-prize for physics is now a level-three goal. It\u2019s not enough to be good. It\u2019s not even enough to be the best in your subfield. You need to dominate a large and encompassing category to win the prize.<\/p>\n<p>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.<\/p>\n<h2>Optimism or Pessimism? Talent or Effort?<\/h2>\n<p>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\u2019re examining.<\/p>\n<p>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.<\/p>\n<p>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.<\/p>\n<p>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 \u201cbest\u201d 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\u2019s no longer the case that you can succeed just by working hard. Your competitors are working hard too, and if they\u2019re naturally better than you, that will only compound their advantage.<\/p>\n<p>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 <em>both<\/em> 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.<\/p>\n<p>Level-three competition is a completely different beast. Here, I\u2019m much more pessimistic about success. Obviously success is <em>possible<\/em> 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.<\/p>\n<p>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.<\/p>\n<p>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.<\/p>\n<h2>First, Know Your Competition<\/h2>\n<p>Looking at these competitive ranges, you could either describe me as a self-help optimist\u2014believing in the power of effort, goals and sound methods to be the ultimate determiner of success\u2014or you could see me as an unabashed cynic\u2014believing that there\u2019s no possibility of success without extreme talent and luck.<\/p>\n<p>However, I think if you analyze the type of competition you\u2019re facing, it\u2019s easier to see how the situation can look very different for different people.<\/p>\n<p>This reversal of fortunes and the level of competition changes, is also one of the reason I get frustrated with book titles like <a href=\"https:\/\/www.amazon.com\/Talent-Overrated-Separates-World-Class-Performers\/dp\/1591842948\">Talent is Overrated<\/a> 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.<\/p>\n<p>I think being able to think about the kind of competition you\u2019re facing is a much more powerful mental model than dividing success into \u201ceffort\/experience\u201d and \u201ctalent\/privilege.\u201d<\/p>\n<h2>Don\u2019t Like the Competition? Change It<\/h2>\n<p>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).<\/p>\n<p>It goes without saying that competition is just one variable that explains different degrees of success, but it isn\u2019t 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 \u201ctop\u201d (such as blogging). As such, it\u2019s 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.<\/p>\n<p>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.<\/p>\n<p>Since success is often defined relatively, either directly or implicitly, understanding the type of competition you\u2019re facing is a stronger predictor of the requirements of success than almost anything else.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>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\u2019t absolute performance, but relative performance. Absolute performance can often go up and up, yet because it [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[683,3],"tags":[],"class_list":{"0":"post-7263","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-nc-career","7":"category-personal-development","8":"entry"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Know Your Competition - Scott H Young<\/title>\n<meta name=\"description\" content=\"Almost all human accomplishments are judged in competition with others. 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