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Why A Successful Businessman Said That “Competition Is For Losers”

Recently, I listened to the new season of “Masters of Scale”, the podcast hosted by Reid Hoffman, co-founder of a business-oriented social networking service. He was interviewing Peter Thiel, co-founder of a worldwide online payments company, and they were discussing about competition.

Thiel made a really interesting comment that competition is for losers. It basically means that if a company is just trying to compete, it has already lost the game. Although both Hoffman and Thiel are well-known technology entrepreneurs and investors, that comment sounded quite true to me even for traditional businesses.

The line between technology and traditional businesses has been blurred and almost any industry can be affected by how new technology is changing. This means that for traditional businesses just focusing on beating their competitors, they might miss out a new disruptor coming in to change the whole industry.

Just look at the taxi transportation business and the telecommunication business. Both were long seen as a monopolistic type of business with not much changes. However, just within the last few years, so much has changed in these two industries, making the incumbents struggling to maintain their positions.

For businesses to be truly successful, Thiel suggests that they have to move at such a fast pace that no competition can even catch up with them. This means that the company has to constantly innovate. It has to chart the way forward for the whole industry rather than just looking at what other competitors are doing and following.

It seems that if a business fails to innovate itself, it is just a matter of time before it becomes obsolete. Just look at the newspaper business.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.