The Need for Rivals
Or, why Apollo Creed makes Rocky Balboa better
👋 Hey there! Welcome to a new edition of The Sunday Wisdom! My name is Abhishek.
The Sunday Wisdom is a collection of weekly essays on a variety of topics, such as psychology, health, science, philosophy, economics, business, and more — all tightly packed enough to turn you into a polymath.
The latest two editions are always free, the rest are available to paid subscribers. Now… time for the mandatory plug!
But seriously, if you are facing trouble completing the subscription above, you can alternatively make a pledge on Patreon (if you are sooo keen). Pledge $2 or more and I’ll unlock paid posts for you. Deal?
Alright! On to this week’s essay. It’s about 1,650 words. The key ideas are from Peter Thiel’s Zero to One and Simon Sinek’s The Infinite Game.
Q: Is competition different from rivalry?
Sylvester Stallone’s Rocky is one of my all time favourite movies.
Rocky has everything. Sports, good story, great acting, and immense drama — all the ingredients to make any movie entertaining.
Interestingly, it has no villain. Apollo Creed is the adversary nonetheless, but he’s not the bad guy for sure.
I’ve often wondered, would Rocky (the character) be able to do what he went on to do, and achieve everything he went on to achieve without Apollo?
Apollo was way way better than Rocky in every aspect. He was the world champion while Rocky was only a “journeyman” who fought at local clubs. Apollo was too big to be a competition for Rocky. So Rocky took upon the challenge only to get better at the game himself. All he wanted to do was to give a good fight. That’s what I loved the most about Rocky’s mindset. He wanted to go the distance, last fifteen rounds without getting knocked out, and that’s it. There was no thought about winning the game or beating the competition.
Apollo was not Rocky’s competition; he was his rival — a worthy adversary who pushed him to become better.
War metaphors invade our everyday business language: we use headhunters to build up a sales force that will enable us to take a captive market and make a killing. But really, it’s only competition, not business.
Competition, unlike business, is like war: allegedly necessary, supposedly valiant, but ultimately destructive.
But my question is, why do people compete with each other? Without giving an answer myself, let‘s try to understand what Marx and Shakespeare (yeah, right) have to say about it. Interestingly, they’ve put forward two (very much opposing) models for understanding almost every kind of conflict.
According to Marx, people fight because they are different. The proletariat (the working class who sell their labour in exchange for wages) fights the bourgeoisie (the ruling class who control the means of production) because they have completely different ideas and goals. The greater the differences, the greater the conflict.
To Shakespeare, by contrast, all combatants look more or less alike. It’s not at all clear why they should be fighting, since they have nothing to fight about.
Consider the opening line from Romeo and Juliet: “Two households, both alike in dignity.” The two houses are alike, yet they hate each other. They grow even more similar as the feud escalates. Eventually, they lose sight of why they started fighting in the first place.
In the world of business at least, Shakespeare proves the superior guide.
If you look inside a company, you’d see people obsessed with their colleagues in terms of career progress. While the company itself is obsessed with its competitors in the marketplace. Amid all the human drama, people have lost sight of what really matters.
In late 2000, Microsoft and Google’s behaviour looked very similar to the two rival families in Romeo and Juliet.
They came from very different places — Microsoft made operating systems and Google made search engines. There was nothing to fight about. But… these companies decided to shift their focus on each other instead. The result? War erupted: Windows vs. Chrome OS, Bing vs. Google Search, Explorer vs. Chrome, Office vs. Docs, and Surface vs. Nexus.
I must admit, a few good products did come out because of this feud. But like war, competition is costly. It cost Microsoft and Google their dominance. Apple came along and overtook them all. In January 2013, Apple’s market capitalisation was $500 billion, while Google and Microsoft combined were worth $467 billion. Just three years before, Microsoft and Google were each more valuable than Apple.
Even to this day, Apple’s market capitalisation ($3.07 trillion) is more than that of Microsoft’s ($2.57 trillion) and Google’s parent company Alphabet’s ($1.97 trillion). War is a costly business. Competition can make people hallucinate opportunities where none exist.
The crazy 90s version of this was the fierce battle for the online pet store market. It was Pets.com vs. PetStore.com vs. Petopia.com vs. what seemed like dozens of others.
Each company was obsessed with defeating its rivals, precisely because there were no substantive differences to focus on. Amid all the tactical questions — who could price chewy dog toys most aggressively, or who could create the best Super Bowl ads — these companies totally lost sight of the wider question of whether the online pet supply market was the right space to be in.
Winning is better than losing, but everybody loses when a war isn’t worth fighting.
When Pets.com folded after the dot-com crash, $300 million of investment capital disappeared with it.
If a business can recognise competition as a destructive force instead of a sign of value; if they can start thinking of other players as rivals instead of competitors, those who can help them become better players themselves, it’s already more sane than most.
Unlike a competitor, a rival is not an opponent who has to be beaten in a game. A rival is someone who is worthy of comparison. They do things as well as or better than us. We don’t need to admire everything about them, agree with them, or even like them. We simply have to acknowledge that they have strengths and abilities from which we could learn a thing or two — just like how Rocky thought about Apollo.
How Alan Mulally turned things around at the then ailing Ford Motor Company after taking the helm as CEO is a great example.
When Mulally left Boeing Commercial after 37 years to run the Ford Motor Company in 2006, it would be the start of a journey that would result in one of the greatest turnarounds in automotive history.
After the formal press conference, the room fell silent as one reporter asked: what kind of car did Mulally drive? Mulally leaned in and answered, “A Lexus. It’s the finest car in the world.”
The new CEO of Ford just admitted that the car made by Toyota that he drove was better than anything Ford made! To some this displayed a lack of loyalty. But to Mulally, it was an honest assessment.
Ford was losing billions of dollars and its stock was trading at a low of $1.01. Ford cars had a bad reputation for being unexciting gas guzzlers. The least they could do was start by being honest about things with themselves.
Mulally wasn’t trying to make the people at Ford feel bad. He was offering them a chance to do better. He was convinced that in order to save Ford, they would need to be frank about the state of their own products and processes and become respectful students of the other players in their industry.
Toyota was a company that, as Mulally describes it, makes “products that people want . . . with less resources and less time than anybody in the world.” They were a benchmark against which Ford could push themselves to improve the quality of their own cars and how they made them. And if they could pull that off, the profits would follow. For Mulally, the reason to study the other car manufacturers wasn’t to copy them or outsell them, but to learn from them. For the CEO of a historical company, this takes immense humility.
Now, a rival can be anybody. They can be players in our industry or outside our industry. They can be our sworn enemies, our (sometimes) collaborators, or our colleagues. They can make a superior product, command greater loyalty, be a better leader, or act with a clearer sense of purpose than we do. But unlike a competition, they keep us focussed on what really matters: our business, our growth, our product, our customers, not theirs — and that’s a key difference.
Whenever a business forgets this, no matter how good its its loyalty, its growth, its leadership, its product, it has a huge risk of becoming like BlackBerry, a “has been”.
Before the iPhone, BlackBerry was one of the largest cell phone operating systems in the world. Their high performing, highly durable and very reliable products made them the must-have option in government and in many companies. They owned the business market, especially in the US.
Even after Apple introduced their iPhone in 2007, BlackBerry’s momentum continued to carry them to a record high 20% share of cell phone sales in 2009. But, as iPhones became more and more popular, BlackBerry panicked.
At this point, BlackBerry’s leaders could have chosen to draw a contrast between their philosophies and Apple’s (as Apple had done with IBM decades before). They could have used Apple as a foil to highlight their own vision of the world, one that revolved around the security and reliability needs of business and government (which wasn’t really Apple’s primary focus back then). But they chose not to.
Instead, BlackBerry responded to the iPhone’s rising popularity by trying to copy it. First, they started offering apps and games for their existing devices, which dramatically slowed their products’ performance. Then they abandoned their iconic, full QWERTY keyboards and introduced touch screen options. They never really worked as well as iPhones and were much less durable than their other models.
Obsessed with trying to beat Apple, they actually lost sight of their own vision. They forgot why they went into business in the first place. And in short order, BlackBerry went into a steep and steady decline.
By 2013 the company had less than 1 percent market share, a nearly 99 percent drop in just four years. Where once they dominated, today BlackBerry no longer designs or manufactures hardware. Instead, the company now specialises in software and services for enterprises and governments.
As Peter Thiel says, “Competition is for losers.” Literally.
Today I Learned
The brain is a fascinating forecasting machine.
For each visual input, it takes a tiny but perceptible amount of time — about two hundred milliseconds, one-fifth of a second — for the information to travel along the optic nerves and into the brain to be processed and interpreted.
One-fifth of a second is not a trivial span of time when a rapid response is required — to step back from an oncoming car, say, or to avoid a blow to the head.
To help us deal better with this fractional lag, the brain does a truly extraordinary thing: it continuously forecasts what the world will be like a fifth of a second from now, and that is what it gives us as the present. That means that we never see the world as it is at this very instant, but rather as it will be a fraction of a moment in the future.
We spend our whole lives, in other words, living in a world that doesn’t quite exist yet. Truly fascinating!
Timeless Insight
Elites are different from the bourgeoisie.
Being an elite is not about money (although money plays a crucial role). It’s not even about education (though education plays a large role as well).
Being an elite is more about the set of behaviours and dispositions that indicate a person to be a member of the elite — which usually centre around wanting to change the world.
Wanting to change the world hits the sweet spot because it shows how important one is (you can afford worrying about the planet and not your rent), while also highlighting one’s empathy (wanting to take care of the less fortunate). This is the whole point of being an elite. It’s what separates a person from simply being a bourgeois.
Elites want to matter. Bourgeoisie just want comfort and safety. Meanwhile proletariats just want to put food on the table.
What I’m Reading
A job pays you for what the role/designation does rather than for what you can do, which is why the compensation it pays doesn’t justify your capabilities.
— Peter Tompkins, The Secret Life Of Plants
Tiny Thought
A world where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances is as bad a world where nothing gets better.
Before You Go…
If you’re finding this newsletter valuable, share it with a friend, and consider subscribing. If you aren’t ready to become a paid subscriber yet, but feel like I’ve done a good enough job writing today’s issue, you can also support me by buying me a cup of coffee. ☕️
Until next Sunday,
Abhishek 👋
PS: All typos are intentional and I take no responsibility whatsoever! 😬