Competition Is For Losers
Stop fighting for market share. Use the Blue Ocean ERRC framework to make your competition irrelevant by changing the rules of the game.
Most companies are fighting the wrong battle.
When growth slows, leadership teams tend to reach for the same playbook. They launch new features, cut prices, increase marketing spend, or copy whatever appears to be working for competitors. The logic seems sensible. If a competitor is winning customers, the answer must be to become better than them.
The problem is that every competitor is thinking exactly the same way.
Soon everyone is competing on the same dimensions: price, features, speed, convenience, service. Margins compress. Products become harder to distinguish. Strategic planning turns into a debate about how to win a race someone else designed.
Peter Thiel captured this reality in a single line:
Competition is for losers.
His point was not that competition disappears. His point was that the best businesses stop competing on the industry’s existing terms. They create new ones.
The Trap Of Incremental Improvement
Most strategy work is really optimisation.
Leadership teams spend their time discussing how to improve conversion by 5%, reduce churn by 3%, launch another feature, or move slightly faster than competitors. These are useful questions, but they are not strategic questions.
Strategy starts somewhere else. It asks which assumptions the entire industry is making that no longer need to be true. That is where new market space emerges. Not from being slightly better, but from being fundamentally different.
This is the core idea behind Blue Ocean Strategy, developed by Chan Kim and Renée Mauborgne. Instead of fighting competitors in crowded markets, they argued that organisations should redesign the factors customers value.
The goal is not to win the existing game.
The goal is to create a new one.
The Most Useful Strategy Tool Nobody Uses
Blue Ocean Strategy produced dozens of frameworks. One remains particularly useful because it forces leaders to confront the hardest part of strategy: trade-offs.
The framework is called the ERRC Grid.
Eliminate.
Reduce.
Raise.
Create.
Most leadership teams spend almost all their time discussing the last two. What can we raise? What can we create? How can we add more value? How can we add more capability?
Almost nobody wants to discuss Eliminate.
That is usually where the breakthrough sits.
Every industry accumulates baggage over time. Features nobody uses. Processes nobody questions. Costs everyone assumes are unavoidable. The longer an industry exists, the more these assumptions become invisible.
The ERRC Grid forces leaders to challenge them directly.
The Courage To Be Bad At Something
Southwest Airlines remains the classic example.
The airline eliminated meals, assigned seating, and premium service. Traditional airlines viewed these features as mandatory. Southwest viewed them as costs.
By removing them, Southwest created faster aircraft turnarounds, lower operating costs, simpler operations, and a fundamentally different value proposition. It became intentionally worse at certain things in order to become dramatically better at others.
Most organisations struggle with this idea.
Executives often want the new feature and the old feature. The new service and the old service. The new workflow and the old workflow. Over time, complexity accumulates. Costs rise. Operations become harder. Customers become confused.
The result is a Frankenstein product.
Every meaningful competitive advantage requires sacrifice somewhere else.
That is why every strategy discussion should include one uncomfortable question:
What are we willing to be terrible at?
If you are trying to be excellent at everything, you are probably not creating a Blue Ocean. You are simply adding complexity.
Use this prompt to challenge the assumptions in your industry.
Prompt: Blue Ocean ERRC Grid
Act as a Blue Ocean Strategist.
We compete in the [Industry Name] market.
Our competitors compete on these standard factors:[Price, Speed, Complexity, Status, etc.]
Help me build an ERRC Grid to create a new market space.
Eliminate
What industry standards can we delete entirely because customers do not actually care about them? This should reduce cost.Reduce
What factors can we reduce well below the industry standard?Raise
What factors must we raise well above the industry standard?Create
What new factor has the industry never offered that we can invent?
The goal is not to improve the existing market.
The goal is to redesign it.
The Executive Test
Before approving any new feature, service, initiative, or investment, ask one question:
What are we eliminating?
If the answer is nothing, there is a good chance complexity is growing faster than value.
The strongest strategies are rarely additive. They are selective. They force leaders to decide what not to do, what not to build, and which customers not to serve. That discipline is often what creates the advantage.
The most successful companies often look strange when they first emerge because they are not trying to win the existing game.
They are building a different one.
For paid subscribers, below are two governance tools that force the hardest part of Blue Ocean Strategy: making deliberate trade-offs. Most leadership teams understand the framework. Far fewer have the discipline to apply it.
