Notes On Startup – Ideology of Competition – Building Creative Monopoly

Creative monopoly means new products that benefit everybody and sustainable profits for the creator. Competition means no profit for anybody, no meaningful differentiation and struggle for survival, So why do people believe in competition is healthy?

The answer is competition is not economic concept, its an ideology that pervades our society and distorts our thinking.

We Preach competition, internalise its necessity and enact its commandments and as a result we trap ourselves within it, even though the more we compete, the less we gain, this is the simple truth but we have all been trained to ignore it.

Competition in Education System

Our education system both drives and reflects our obsession with competition, Grades themselves allow precise measurement of each student’s competitiveness.

Students who don’t learn just by sitting still at a desk are made to feel somehow inferior, while children who excel on conventional measures like tests, assignments end up defining their identities and it gets worse as they ascend to higher level of education.

for the privilege of being turned into conformists, students pay hundreds of thousands of rupees as tution fees. Why are we doing this ?

Competition – Marx and Shakespeare models

Marx: People fight because they are different, the greater the differences, the greater conflicts.

Shakespeare: By contrast all combatants look more or less alike, its not clear why they should be fighting, Since they nothing to fight about.

Consider the opening line from “Romeo and Juliet”, Two households are alike, yet they hate each other, eventually they lose sight of why they started fighting in the first place.

In the world of business atleast Shakespeare model proves the superior guide. Inside a firm people became obsessed with their competitors for career advancement. Then the firms themselves become obsessed with their competitors.

Shakespeare model of Competition in Real-world business

Gates and Schmidt that is Microsoft vs Google, they both were in a different world as they started with operating system and search engine respectively. As with all good tragedy, they conflict seems inevitable only in retrospect. As they grew they began to focus on each other and hence we started seeing war like Windows vs Chrome OS, Explorer vs Chrome, Office vs Docs, Surface vs Nexus

Just as a War Costs, it cost Microsoft and Google their dominance: Apple took them all in Jan 2013, Apple market capitalization was $500 billion, while Microsoft and Google together $467 billion.

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Rivalry causes us to over emphasise old opportunities and slavishly copy what was worked in the past

Another Example:

In off 2010 a startup square released a card reader for iPhone, it was a great square shaped product.

Imitators sprung in no time, A Canadian company Netsecure released half moon shaped card reader, Intuit brought Cylindrical card reader, Paypal launched Traingle shaped card reader.

So one gets the sense that Shakespear Saga won’t end until the apes run out of shapes 🙂

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Competition can make people hallucinate opportunities where none exist.

If you can’t beat the rival, it may be better to merge. Thats whay Paypal and did in late 1999 and that helped them to ride out the dot com crash and then build a successful business.

Reference: Book Zero To One By Peter Thiel

Continue Reading – Startup Thinking – Finding out a Secret to build something new

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