Do What Your Competitors Don’t Want You To Do

I’m a huge Yankees (and baseball) fan, which makes this time of year actually pretty interesting.

During the first week of December all the team GMs and owners congregate for “Winter Meetings,” where a bunch of players are traded and free agents are signed. This is when teams decide which players they’ll commit a few hundred millions of dollars to and which they won’t. It’s tricky business.

I saw an interview a few years back where one GM discussed his process (I’m paraphrasing):

“I make it simple. What would our biggest rival hate for us to do? Who, if we signed them, would ruin their day? What could we do to spoil the biggest investments they’ve already made?

A good strategy is only good in relation to your competitors. For example, a lot of teams have paid a premium for strikeout pitchers. Strikeouts take things like bloop hits or errors or sac flys out of the equation.

So, once I recognize that strategy, maybe I stack my team with players that rarely strike out. Especially if the market doesn’t value those players all that highly (which it doesn’t).

So my strategy is often to first figure out what strategy other teams have heavily invested in, and then see if I can pee in their Cheerios.”

In my favorite strategy book of all time, Good Strategy/Bad Strategy, Rumelt talks about how a great strategy pushes you forward and your competitors back simultaneously.

If you’re competing against, say, Starbucks, and you’re going to only offer pour over coffee, this is good for you (because it tastes better than drip coffee), and painful for Starbucks (because they’ve invested hundreds of millions of dollars into existing drip coffee machines). They’d have to change their core strategy to compete directly with you.

Obviously you’d have to be pretty big for them to care, but you get the point.

Think about your competitors:

What’s their core strategy?

Where have they over-invested?

How can you… well… pee in their Cheerios?

Usually the opportunity comes from niching down (finding a customer who currently goes to Starbucks but would happily overpay for pour over coffee if it existed), or from new tech (using AI to replace something a company over-invested in before AI existed).

The flip side of a heavily invested strategy is often a good place to be.