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Competition is for Losers?

I haven't completed the YCombinator lecture by Peter Theil on "Competition" yet. But the title in itself, has struck me. The first few seconds too. Theil says that you, as a founder of a company, must aim to create a monopoly. You must not be worrying about having competition, because competition is for losers (not really transcribing word-to-word).

The idea of looking at competition this way is fascinating and interesting. I've seen a founder on LinkedIn say that if you have competition, that is good for a business, for two inherent reasons:

  1. The idea is validated if another company is already flourishing in the market.
  2. You can study your competitor and fill in the gaps and problems that they have failed to solve. That makes sense, and rightly so from a perspective of starting your own company. However, Theil's statement starts holding true for ultra-successful startups such as OpenAI, that has thwarted its potential competitors to merely 'other players in the market.'

Also, Theil's statement of being a monopoly does not essentially mean that there is no one else in the market altogether. It's just that the competitors are merely 'other players' and you are not really competing with them. Google can be a great example that satisfies this logic. Google is a go-to search engine for everyone in the world. It is popular to such an extent that even my grandmother, who have never accessed the internet on her own, knows what Google is used for.

There are many alternatives to Google that I know of, but in the search engine market, they are not even close to being a 'competitor,' but are just other players in the market. Be it Microsoft's Bing or DuckDuckGo, nothing even comes close to Google at this point.

(Special mention to Perplexity.ai here. It can give Google competition in terms of end-user experience in search. Not sure how well it can fare in terms of maintaining the whole advertisement ecosystem)

Without digressing too much, I think what Theil says is correct during and after you are done "blitzscaling." In the initial building and growth stages, competition still gives a good roadmap to navigate and prepare for market capture.