Over the past year I’ve spent a lot of time thinking about the concept of having a competitive advantage. I’ve come to realize that it’s important in both business and in life.
Having a Competitive Advantage Frees You Up to Dream Big
Having a competitive advantage in one area allows you to do well with relatively less effort, which then allows you to focus on doing extraordinary things in another area. My favorite historical example of this is Benjamin Franklin–a man who became independently wealthy through his publishing business relatively early on in his life so that he could pursue politics without ever being corrupted by money.
The modern day analog to Benjamin Franklin is Michael Bloomberg. According to his biography Mike Bloomberg: Money, Power, Politics, Bloomberg decided to run for mayor only after becoming independently wealthy. (I still think he’s trying to become President although I guess he’s getting old.) You may not have agreed with Bloomberg’s politics but you can’t deny that he was extraordinarily effective at what he sought out to do. He has the ability to say and do things most people wouldn’t have the courage to do.
Society doesn’t just benefit from people who have a competitive advantage. Society benefits from companies that dominate their markets too. Take a look at Google, for example. They’re arguably the most innovative company in the world–they’re undertaking some super interesting and ambitious ventures like creating self driving cars, contact lens that measure blood sugar levels, or robot dogs. They’re able to do this because they have an enormous competitive advantage in their primary business: online advertising.
Not having to worry about making money frees up a company to engage in risky and ambitious projects. But most companies don’t have that luxury. Most ordinary businesses have to focus on reinvesting their earnings just to keep up. In Zero to One, Peter Thiel explains that having a sustainable competitive advantage gives you a monopoly-like advantage over competitors. When you have such a dominant advantage, you don’t have to work or think very hard to easily make money, which frees you up to take on ambitious, world changing projects.
Finding Your Competitive Advantage by Copying Successful People Won’t Work
To acquire a competitive advantage you have to first understand yourself. You should take the time to think about your personality–your unique set of strengths and weaknesses–and figure out where a person with that personality belongs. Society is a large, complex ecosystem where everyone is competing against each other. If you can find a niche that is suited to your personality, you can do very well in life.
I never really appreciated this when I was younger. My approach was to read biographies of people I admired and use their life trajectory as a roadmap for my own life. For example, I remember carefully studying superlawyer David Boies‘ career by reading his autobiography Courting Justice: From NY Yankees v. Major League Baseball to Bush v. Gore. David Boies didn’t do well academically when he was growing up, but after getting into Northwestern Law School he did extraordinarily well. Boies made law review his 1L year, became Editor in Chief, and worked for Cravath, Swaine, and Moore–the top law firm in the country.
But I didn’t realize that David Boies had specific, important talents in relevant areas–talents that I didn’t have. He had a photographic memory over things he read, scored well on his law school exams, and always had insightful thoughts to share in class. I was the opposite: I had trouble remembering things I had just read, felt out of ease during law exams, and never felt I had anything meaningful to say in class. But I still tried to emulate David Boies. I attempted to become Editor in Chief of the Law Review. I applied for a job with Cravath.
I ended up being rejected from both. Even though Boies and I had some similarities, I just didn’t have the same strengths he did. As a result, I wasn’t able to succeed exactly the same way he did. My failures led to lots of disappointment and deep frustration. The problem was that I never took the time to think about what I was good at, and whether following Boies’ career path made sense for me, given my unique strengths and weaknesses.
Taking the Conventional Path Can Be a Bad Decision
Imagine it’s the late 1970s. There’s this kid who is described by his father as the laziest boy he’d ever seen. The kid was a quitter–leaving his first job as hotel maintenance man after working there for only one week. His mother was worried, and encouraged him to learn how to sew and cook for himself because she was worried he wouldn’t get married–after all, the kid didn’t seem to be able to attract any girls.
It’s not hard to imagine the type of advice he would have received from his mentors at the time. Something like about improving discipline, working hard, going to college, and getting a good job.
It would have been hard for him to emulate the successful men around him. Although the kid could have improved his ability to tolerate a job he hated, it would have been very difficult and would require a lot of sacrifice. There’s a good chance he would have just quit somewhere along the way. And even if he could have successfully made it all the way to adulthood following the stable path, it would have been a lot harder and a lot less fun than what he ended up doing.
That’s because for Michael Jordan, “laziness magically disintegrated when it came to sports.” In competitive sports, Jordan’s personality shined–he was ruthless when it came to winning on the basketball court. As a ballplayer Jordan’s negative traits, like being a quitter, being lazy, or unmotivated simply disappeared.
Your personality matters.
Your strengths and weaknesses matter.
Steph Curry knows he’s not Michael Jordan
If Steph Curry tried to be the next Michael Jordan, he would have failed. In Curry’s scouting report, he was described as too small, and lacking superhuman athleticism. They said Curry would have limited success at the next level.
Curry embraced his own unique strengths, such as his shooting skills, quick release jump shot, ball handling ability, and ability to change directions quickly. In this December 2015 interview, Curry describes his training regimen:
For me, that doesn’t mean vertical, it means creating space, being in the best shape I can be so I can run circles around guys on the floor. But the drills I do are pretty much what I’ve been working on these past three or four years: like this drill where I wear goggles with flashing lights that obstruct my vision (while dribbling and passing). Weird, random stuff.
Curry doesn’t waste his time trying to be better at things other people are good at. Instead he focuses on those very specific things he is good at.
Your Unique Combination of Skills and Talents
There are so many examples of others who have found the specific things that they’re good at and focused only on that. Dallas Mavericks owner and billionaire Mark Cuban has admitted in his book How to Win at the Sport of Business that he’s always been a terrible employee. But we know now that he is uniquely talented in creating tremendous amounts of money by forming and selling new businesses.
Your main competitive advantage doesn’t have to be in a specific, narrow domain. It can be a combination of ordinary skills that, when standing alone, isn’t all that impressive. Scott Adams points out in How to Fail at Almost Everything and Still Win Big, you can combine nearly any ordinary skill with another ordinary skill–such as public speaking and/or being able to speak a foreign language–and that combination probably will give you a gigantic competitive advantage.
I think we could all benefit from taking stock of our unique traits instead of trying to change ourselves to fit into some predetermined role set by our employer, peers, or society. It’s tempting to see changing yourself as “self improvement” and that when you improve your weakness, you’re becoming a better person. But really it’s just trying to turn yourself into someone you’re not.