| How to Understand Your Competition and Attract Unique Opportunities |
As a working professional, have you felt that you are in constant competition and find it incredibly difficult to defeat your competitors?
When pondering your career, did you ever have the following insecurities?
“My background and skillsets are too generic. They won’t hire me.”
“Anyone can do my job. I may get fired soon.”
Having been an employee of a few companies over the past decade, I often reflect upon these thoughts. After all, aren’t there many people who are smarter and more capable than I am?
I want to share with you how I address this ongoing career and mental challenge by utilizing one simple concept: competitive advantage.
If you are able to internalize and master this concept, you will succeed not just in advancing your career, but pretty much any other areas that you need to “compete” in.
The Two Fundamental Ways to “Compete”
When I first joined the Chinese tech unicorn in 2019 and began rotating to their team in Mexico, one of the frequently debated topics among the strategy, operations and product specialists was how to compete with the largest US-based, global player (by revenue) in our industry that was founded three years ahead of us.
Product was obviously critical. From design, software, functionalities, efficiency, user interface, payment system, customer service etc., our team compared our app with that of the market leader in every conceivable way, and we categorized all the product attributes into two buckets: “feature gap” and “feature differentiation”.
“Feature gap” represents the direct distance between the same exact product functionality of the incumbent and the contender.
e.g. Both apps offer payment options for customers. If the incumbent’s app allows customers to use both cash and credit/debit card to transact, while the contender’s app only allows cash transaction, then the lack of e-payment option is a feature gap from the contender’s viewpoint.
“Feature differentiation” represents the specific product functionality of a contender that the incumbent does not offer.
e.g. If the contender’s app provides real-time Spanish-English translation in the SMS dialogue between the customer and the service provider, while the incumbent’s app does not have this function, then the real-time translation is a feature differentiation of the contender’s product.
Although the two notions are in the context of product feature comparison, they epitomize the two fundamental but distinct ways that we compete in our everyday situations.
Feature gap: Trying to improve and (eventually) dictate an existing category that is already defined by a leader.
Most of us understand “competition” as a simple race: whoever runs the fastest gets the gold medal. Consciously or mindlessly, we jump on the same track and start running, just like everyone else.
In my opinion, we are inclined to think simplistically about competition largely because we were programmed to follow the doctrine prescribed by our traditional education system – the only way to do well and get the golden tickets to the top schools or the most prestigious jobs is by achieving the highest scores.
But here are the problems:
If you are a high school student in the US, what is your chance of becoming the valedictorian (the one student with the highest academic rank in a graduating class), or getting A+ in all your classes, or attaining a perfect SAT score?
Answer: Assuming your graduating class has 100 students, then your chance of being the valedictorian is 1%. Full marks on the SAT represent the 99th+percentile of examinees. Conventional wisdom tells us that achieving the perfect GPA throughout your high school years is undeniably difficult.
If you are a high school student in China, what is your chance to be the top scorer of “Gaokao” (China’s version of the national college entrance exam) in your province?
Answer: About 0.0003%.
Narrowing that feature gap is the path many people take to “survive”
Objectively speaking, if you try hard to fight in an already crowded space, you will be able to “survive”, because the market demand in that space is proven. In a way, it’s a safe place to pick your battle.
With good enough grades and test scores, you may not get into Oxbridge or the Ivy League, but you can secure a place at a second-tier or third-tier university.
Graduating from that university, you may not secure a front-office role at Amazon or Morgan Stanley, but you will be able to obtain a job at a decent firm that still pays fairly well.
The point is that, by working hard and adhering to the norm of competition, you will “survive” coming out of the school system, but you are unlikely to thrive by continuing down the same path.
Because you are no longer confined in the same racetrack, your avenues of reaching victory have broadened. The working world is vast and has different sets of rules and expectations, and scoring systems are more obscure. Blindly following the footsteps of your predecessors and doing what everyone else in your competing space is doing will limit you from reaching career breakthroughs.
Your specific background and skillset will be more commoditized as more people enter your profession and your competitive edge may diminish as you become older and more expensive to your employer.
By being an indiscriminate follower in a well-established field, you can survive in the short term, but you are unlikely to build a winning career.
That is not to say you should not learn from your predecessors and walk a totally different path. We should extract lessons from those success-proven cases, and then apply the concept of “feature differentiation” to develop our distinctive, competitive advantages.
Feature differentiation: Looking for ways to distinguish oneself from an existing market incumbent and (eventually) become a leader of a newly defined category.
During my EV start-up days, we met with Softbank a few times to explore the possibility of an investment into our company. A key piece of feedback that we received from the tech investment giant was that they preferred to invest in “category leaders”, and at that point, they were unable to identify the leader in the space of electric vehicles (EV).
By now, many people would view Tesla as the “category leader” of EV. The company is fundamentally in car manufacturing which is a mature, existing category, but it did not choose to compete with Toyota or Ford in the mass segment of gasoline cars, nor did it decide to challenge Mercedes-Benz or BMW in the premium auto space.
Tesla was able differentiate and ultimately define a new category: it disrupted the auto industry by successfully innovating and scaling a car that is not only electric but also technologically intelligent. The seamless integration of both aspects is extremely difficult to replicate.
Although Tesla is a company and the term “category leader” is more applicable to start-up entrepreneurs and business owners, you can also become a “category leader” in your own right through developing individual competitive advantages against your rivals.
The most accomplished individuals are all “category leaders”. Here are some of my timely picks:
Warren Buffet (Berkshire Hathaway) => Wealth and investment
Steve Jobs (Apple) and Elon Musk (Tesla) => Technology and innovation
Masayoshi Son (Softbank) => Technology investment
Bernard Arnault (LVMH) => Luxury fashion
Jack Ma (Alibaba) and Pony Ma (Tencent) => Technology and wealth in China
Angela Merkel (Chancellor of Germany) => Female leadership in Europe
Of course, not all of us is a Buffet or Musk, nor do we all necessarily want to be entrepreneurs, CEOs or politicians. But these icons exemplify how powerful one can be when one is considered the creator or leader of a specific category.
It is imperative to recognize that they were not born with the iconic statuses. It took decades of time and effort to develop, enhance, and leverage their competitive advantages before making their home runs.
With these reputable figures in mind, here is my advice to you:
Advance your career by cultivating your differentiated, competitive edge, with the objective of being a category leader of your own.
Think big, start small.
Each of us has our own unique “code” of competitive advantages that can make us a category leader
How do we cultivate our own competitive edge? You can do this in three steps:
Step 1: Understand your existing “code” of competitive advantages
There are many factors that contribute to building your career profile: education, work experience, technical skill sets, language ability, location, professional network… even your nationality, appearance, and personal interests.
On a standalone basis, each of the contributing factors is unlikely to help you differentiate.
But with a well-calibrated combination, they can form a distinctive line of code that is highly difficult to copy and uniquely represents you.
Take my former supervisor in the European bank for example: A UK-educated Malaysian investment banker who has specialized in the global automotive sector for 12+ years. His Asian background and clientele, corporate finance skills and professional experience together with his industry network have secured him the CFO role of the largest Southeast Asian used car marketplace start-up.
The CEO of my previous EV start-up was the former President of Infiniti China and former Senior Vice President of BMW China. As a German who studied in Mainland China, he possesses the ability to communicate fluently among German, Chinese and English-speaking communities, helping him in managing the start-up that has operations in Germany, China and the US. The combination of his trilingual capability and 18 years of premium automobile industry experience is his unique “code” of competitive advantages.
Here is my current line of “code”: As a US-educated Hong Kong Chinese with trilingual capability (English, Cantonese, and Mandarin Chinese), investment banking, global EV and internet start-up experience, I would be competitively advantaged to work at finance, automotive, or technology companies that have plans to invest in or operate in Greater China or China-based companies that have intentions to expand internationally.
Although many individual “codes” of competitive advantages are not impossible to replicate, they can be rare enough that make it very difficult for employers to find a comparable replacement.
As a start, you need first understand how to use your own “programming language”. It may not be obvious at first, and it may not be unique yet, but once you are able to identify and exploit the right syntax to write your “code”, this becomes your natural weapon.
Step 2: Identify an uncontested but specific category that you are interested in and that you aspire to dominate
For illustrative purposes, here are some examples:
The lead strategy consultant of the Food & Beverage (F&B) industry in Canada
The top investment banker covering the biotech industry in Southeast Asia
The #1 Spanish-capable research expert in Uranium
The Japanese-fluent, UK-based accountant helping Japanese firms to manage their finances in Europe
The go-to Chinese venture capitalist with years of Russian and Eastern European managerial and operational experience in internet start-ups
Two important caveats when looking for your category:
a) It needs to be closely tied to your own competitive advantages. Play to your strengths.
e.g. If you know there is strong demand for Korean manufacturers looking for strategic consultancy and implementation support to relocate their plants to Vietnam, the category does not work for you if you speak neither Korean nor Vietnamese.
b) It needs to be relevant to market demand. Be sure someone is willing to pay for it.
e.g. If your strength is in composing excellent Chinese poems and you want to be the #1 Chinese poet in the US semiconductor industry, it’s an interesting aspiration, but semiconductor companies are unlikely to value and pay for your rare but irrelevant expertise.
It may not look apparent to you at first. In fact, most people don’t spend time to think and plan strategically about this, and that is why they need to count on job security, be at the mercy of their employers and eventually become marginalized in their profession.
Take the time to think about your own playing field to dominate. It should be one that you are genuinely interested in if you want to do well and be happy.
Step 3: Enhance your existing “code” and expand your competitive advantages to become a category leader
Once you have understood your existing competitive advantages and identified the specific category you seek to dominate, it is time to ignite your engine.
In most cases, especially if you are a fresh graduate or only have a few years of work experience, your current “code” of competitive advantages is useful but may not be sufficient to differentiate and reach the goal of becoming a category leader.
Fortunately, our “code” is dynamic and can be cultivated and refined over time.
Take a proactive and deliberate approach in growing and investing in yourself, up to a point where you become strong enough to own your specific category. Be voracious.
Over time, when you dictate your niche by applying your dynamic, evolving “code” of advantages, more people (your superiors, co-workers, clients, investors, other stakeholders) will recognize your uniqueness and value-adding attributes.
When the market generally agrees and perceives you as the lead representative of that category, congratulations, your “differential” equation is solved – you have succeeded in creating your career moat and reaching the orbit where there is compelling demand for your unique combination of skills and expertise.
This puts you in a highly advantageous position to secure new and rewarding opportunities and makes it much harder for your employer to replace you.
Now, it is the categorical status together with your original set of competitive advantages that make up your new, irreplaceable, and desirable “code” of competitive advantages.
As you become more accomplished and respectable in your field, your scope of responsibilities will expand, and you will carry a broader category as your competitive advantages evolve.
The virtuous cycle goes on.
Quick Summary
To summarize the essential points that we have gone through:
I. The two fundamental ways to “compete” in the real-world are to battle directly within an existing category (“feature gap”) and to battle by being different from an established leader (“feature differentiation”)
II. Taking the “feature gap” approach is a way of survival, but not a way to prevail in your long-term career endeavor
III. Taking the “feature differentiation” approach (i.e. cultivating your specific, competitive edge), with the objective to be your own “category leader”, is the superior way to advance your career. To do so, here are the three important steps:
- Understand your existing “code” of competitive advantages. It is your natural weapon.
- Identify an uncontested but specific category that you are interested in and that you aspire to dominate.
- Enhance your existing “code” and expand your competitive advantages to become a category leader.
Final Thoughts
I have vivid memories of an important strategy meeting that I had with the executive management team when I was working at my EV start-up. A key discussion topic was how to be as successful as Tesla.
After a whole weekend of meetings and discussions, we were convinced that our team’s capability could allow us to mimic exactly what Tesla did in terms of their design, software and hardware, sales and marketing, product rollout, features and pricing mechanism.
But the conclusion of that topic boiled down to one ultimate question: “If you are only as good as Tesla in every conceivable aspect, why would customers buy from you but not from Tesla?”
Don’t try to copy the existing frontrunners. Study them first, and then try to be different.
Being different does not mean that you will make it, but it gives you a shot at being better than the incumbents.
This is how we advance ourselves and propel our world forward.
And it starts with you making the right career decisions and strategic moves.
Invest your time to tailor your differentiated career story and compose your unique “code” of competitive advantages.
Discover your blue ocean today.
Sherman
Time to Mobilize.