“Competition is for losers.”
Peter Thiel
I fell in love with sports at a young age.
And as we should expect, sports taught me plenty of life lessons.
I learned about the importance of teamwork and sacrifice. I also learned that hard work, determination, and perseverance tend to pay off. But there is one thing sports taught me above all else.
Sports taught me that the purpose of life was competition.
It wasn’t enough to compete on the playing field. I also had to compete with my family over board games, my brother over parental attention, my classmates over class rank, and other coaches over the scarce set of jobs available.
Competitive games like these are zero-sum. One team wins, the other team loses. One person wins Candyland, the other family members lose. I get the job, you didn’t. 1 minus 1 always equals zero.
But in the summer of 2019, I read Zero to One. For the first time ever, I saw that competition was not the positive force I thought it was. I recognized that competition was destructive and often did more harm than good.
This realization is what Peter Thiel speaks to when he says that “competition is for losers.” It’s not that all competition is bad. It’s that those who fail to escape competition die at the hands of zero-sum games.
Thiel’s antithetical solution to over-zealous competition is monopoly.
“Monopoly,” he writes, “is the condition of every successful business…All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.”
Competition is for losers. Those who fail to build a monopoly—to do something so well nobody else can offer a close substitute–will always lose.
And similarly, coaches who fail to escape competition are doomed to fail.
Yes, Coach. I’m Talking to You.
You may already see how this applies to coaching.
Competition is inherent to sport. But coaches often take this too far.
When we refuse to give up our competitive lens off the field of competition, we end up needlessly competing, becoming more and more like our competition in the process.
This leads to us becoming stagnant, ruthlessly fighting with other coaches about increasingly smaller stakes. As a result, our sports go nowhere.
In the same way that all happy companies are different and all failed companies the same, all happy coaches are different: each one solves a similar problem in a unique way. All failed coaches are the same because they fail to differentiate themselves from the crowd.
But before we get to the part about happy coaches, we need to discuss the 3 reasons coaches must stop competing with each other.
1. Competing causes you to become like your competition
“Be careful who you choose as your enemy because that’s who you become most like.”
Friedrich Nietzsche
When we compete with others, we become more like them. This results in a loss of focus on building your own skillset.
To explain this further, Thiel compares two different views on why people compete:
“Why do people compete with each other? Marx and Shakespeare provide two models for understanding almost every kind of conflict.
According to Marx, people fight because they are different. The proletariat fights the bourgeoisie because they have completely different ideas and goals (generated, for Marx, by their very different material circumstances). The greater the differences, the greater the conflict.
To Shakespeare, by contrast, all combatants look more or less alike. It’s not at all clear why they should be fighting, since they have nothing to fight about. Consider the opening line from Romeo and Juliet: “Two households, both alike in dignity.” The two houses are alike, yet they hate each other. They grow even more similar as the feud escalates. Eventually, they lose sight of why they started fighting in the first place.
In the world of business, at least, Shakespeare proves the superior guide. Inside a firm, people become obsessed with their competitors for career advancement. Then the firms themselves become obsessed with their competitors in the marketplace. Amid all the human drama, people lose sight of what matters and focus on their rivals instead.”
In coaching, we don’t fight each other because we’re all that different. We fight because we’re basically the same. In an effort to exaggerate our differences, we compete against each other. As this competition increases in ferocity, we grow even more similar.
It’s a positive feedback loop. Each act of competition leads to increased similarity. That similarity causes more conflict. And on-and-on it goes.
As a result, we end up becoming just like the coaches we fight against. While we might have small differences in philosophies, all this unnecessary competition causes us to become nothing more than interchangeable commodities. We end up with the same views, same certifications, the same styles, and no differentiation.
I don’t know about you, but I don’t want to be a commodity. I prefer to stand out. To innovate.
2. Competition breeds imitation. Imitation prohibits innovation.
A competitive lens fixes your gaze on your competition. Competition causes us to become more like those we’re competing with.
Because of this similarity, those stuck in competition lose the ability to innovate. Many companies today are founded on the premise of “It’s like Company X, but different.” We focus on making marginal improvements to our competitors. Thiel would argue that these marginal improvements are not real innovation.
Thiel explains this innovation vs. imitation duality in a simple X-Y graph.
Innovation is vertical progress. It’s doing something new. Inventing the printing press, for example.
Imitation is horizontal progress. It’s doing something that’s already been done before, only marginally better. It’s the 100th printing press. It didn’t bring anything new to the world.
In coaching, this duality exists in the area of certification courses. Coaching certifications are valuable because they raise the standard of knowledge for the coaching community. The knowledge within essentially becomes the “table stakes” of coaching.
Unfortunately, that knowledge is not innovation. It’s copying something that’s already proven to work (or perhaps not even proven).
In fact, for every additional person who gets the same certification, your certification becomes less valuable. It’s a reverse network effect.
So this begs the following question: In what circumstance should you get that certification?
Is this an argument that certifications are useless? Far from it! In the right context, they are beneficial. We just need to think about them in the right way–as horizontal–not vertical–progress.
We become like those we compete with. It’s impossible to innovate when you’re consumed with your competition. And in this competitive cycle, nobody comes out a winner.
3. Perfect Competition isn’t so perfect
Think back to Economics 101. Remember that in a perfectly competitive market, none of the firms truly win. One or two might be the “industry leader” due to solid marketing efforts but it’s hard (impossible) to separate the best from the average from the worst.
For example: Who’s the best of Great Clips, Sports Clips, Supercuts, or any of the other general hair salons in business? It’s hard to tell.
This situation plays out for coaches, too.
It goes something like this:
- We compete with other coaches for jobs, status, etc.
- We become more and more like the coaches we compete with.
- Instead of innovating, we all end up looking pretty much the same.
- Nobody in the competitive mindset differentiates themselves, someone outside the competition comes in and gets the job, recognition, etc.
We can escape the destructive force of competition, imitation, and stagnation. If you focus on competing with other coaches, you’ll all end up with nothing. Competition breeds zero-sum thinking. We need more positive-sum coaches.
Becoming a Positive-Sum Coach
Competition is inherently zero-sum. Someone wins. Someone loses. Add the results together and it sums out to zero.
The other side of this is positive-sum. In these kinds of games, the sum of all results is greater than 0. It’s still possible for a subset of parties to lose in a positive-sum game, but the wins outweigh the losses.
Becoming a positive-sum thinker is not easy. As Will and Ariel Durant wrote in The Lessons of History, the first thing that we can learn by studying biology is that life is competition. Said differently, life is zero-sum.
But while that’s true in biology, we have the option of thinking positive-sum in our careers. We can create additional abundance. Peter Thiel calls this a creative monopoly.
A creative monopoly is a business that is A) so good at what it does that nobody else can offer a close substitute and B) adds entirely new categories of abundance to the world. These kinds of companies are powerful engines to make society better. Think Henry Ford, Facebook, and SpaceX.
But creative monopolies aren’t limited to businesses. Coaches also have an opportunity to become positive-sum, creative monopolists. To do something so well that nobody else can offer a close substitute and to follow it up by scaling it in a way that society benefits from it.
Personally, I try to do this through essays like this and my free email newsletter. In the future, I plan to sell products that will introduce additional abundance to the world, making the entire coaching industry better.
There are many ways to become a creative monopolist, but the first step is to recognize competition as a destructive force. As Peter Thiel writes, “If you can recognize competition as a destructive force instead of a sign of value, you’re already more sane than most.”
If you take your eyes off the competition and remain focused on creating abundance for others, you’ll win. But you won’t be the only one who wins. And that is the goal.
It’s true. Competition really is for losers.
Thanks to Jon Watson for giving feedback on drafts of this essay.