The Nature of Competition

Sean Flaherty
The Startup
Published in
6 min readApr 8, 2020

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Experience is what creates a sustainable competitive advantage. This is the nature of competition.

Speed, Quality, Price, Features and Other Factors as pieces in an Experience Puzzle
The Experience Puzzle

Economists have argued for centuries about the nature of competition.

According to Adam Smith in the 18th century, every individual “intends only his own gain.” Therefore, he exchanges what he produces with others who sufficiently value what he has to offer. One thing many economists agree on is the elusive nature of individual utility. What one man values, others often ignore. This simple fact is what drives human innovation and ingenuity.

I was taught many things about competition and positioning in the course of earning my MBA, We read about Michael Porter’s five-forces model, Jerome McCarthy’s 4 P’s of Marketing, and a few other generic frameworks, which invariably describe the relationship between cost and target positioning. One model that stuck with me, as I have seen it used countless times in business, is a more traditional contextual model for determining the positioning of your product, your services and ultimately for your firm called “The Tradeoff Triangle.”

Speed, Quality and Price as three sides of The Tradeoff Triangle
The Tradeoff Triangle

In the software development and project management industries, it is called the “Iron Triangle” and it is used to force conversations about constraints and compromises, which must be dealt with when running a project or a business. It may serve as an important contextual model in those spaces for having “in-the moment” discussions about tradeoffs. The three components of the triangle are speed or convenience, quality and price or cost. We are told we must purposefully choose two of the three to focus on because it is not possible to dominate in all three.

I believe this line of thinking might have been useful in a previous age where slow, massive advertising led almost all sales. Today, however, much has changed. The competitive playing field has been leveled as Thomas Friedman’s work in “The World is Flat” unequivocally demonstrates. But we are in a complicated race. Let me explain.

Speed or Convenience: In a world in which we are always connected and always on, immediate gratification is expected.

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