My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
The key to business success is finding markets with dumb competition rather than competing against other geniuses
The Reasoning
Like poker table selection, your success depends more on who you compete against than how skilled you are. Smart competitors will match your moves and erode margins. Dumb competitors leave opportunities for superior execution and customer service.
What Needs to Be True
- Intelligence and execution quality vary significantly across industries
- Some markets attract lower-quality competitors systematically
- Superior execution can create defensible advantages against weak competition
Counterargument
Dumb competition often exists because markets are genuinely difficult or have structural problems that smart people avoid
What Would Change This View
Evidence that competing in highly intelligent markets leads to better long-term outcomes due to market growth and innovation
Implications for Builders
Research competitor quality when evaluating market opportunities
Look for industries using outdated technology or processes
Avoid hot startup categories where top talent congregates
Consider B2B markets that seem boring but have large customer bases
Example Application
“Instead of starting another AI startup competing against Stanford PhDs, apply AI to freight logistics where competition still uses fax machines and phone calls”
Related Knowledge
Six Stakeholder Business Evaluation Framework
A method for evaluating any company by scoring how well it serves six core stakeholder groups: customers, vendors, employees, investors, regulators, and communities where it operates.
Charlie Munger's Worldly Wisdom Learning Framework
A systematic approach to gaining broad competence by learning the 2-3 most important ideas from each major discipline, creating a toolkit of mental models that can be applied across different domains.
Build profitable businesses by structuring public government data into useful consumer tools
A profitable business generating millions in revenue by making public data accessible and useful to specific customer se
Agency and Permission Mindset
Most barriers to action are psychological rather than structural.
Adventure should be a core life value for young people
Take calculated risks and seek difficult experiences before starting businesses to build character and capability
the key to success is dumb competition
Choose markets where you compete against less intelligent or capable competitors rather than against other highly skille