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The best opportunities are often found where others aren't looking
Wednesday, 6 September 2006
One of the main reasons a lot of people don't succeed as much as they could is because they're not looking in the right places. They look at where everyone else thinks the good stuff is to be found, and rush in to compete for it.
That's why the main tactic most people use to try and succeed is through raw talent. They believe if they work harder, think harder, and compete harder they'll get ahead. Not that there's anything wrong with that, but it's not the only way to succeed. In many areas of life, you can get around the heated competition of running in the same direction as everyone else, simply by following a different plan.
A well-known example of this is the strategy was used by the famous Wall Street investor Peter Lynch. One of Mr Lynch's key tactics was to focus on the stocks no one else was interested in. He felt it was very hard to beat the market buying and selling big and glamourous companies, because of the difficulty getting an advantage over competitors. Instead, he liked stocks that were boring, involved in disgusting industries, and operating in declining markets. In other words, they were the stocks almost nobody was interested in. Mr Lynch found amazing profit opportunities in these companies simply because they'd been so ignored.
The technology industry is also full of stories of overlooked opportunities becoming big businesses.
Microsoft was famously able to become dominant in software through a deal with IBM to supply the operating system for their PCs. At the time, most tech companies saw hardware as the main profitable part of any computer. Software, such as operating systems, were usually given away as sweeteners for buyers of hardware. IBM could have built their own operating system, but they thought doing so wouldn't make them any money, so they outsourced it to Microsoft.
Google is another good example. When the company was started in the late 1990s, most internet players thought search was a bad business to be in. There was a lot of competition and no obvious way to make money from it. Yahoo actually outsourced their search to Google in 2000 rather than developing their own technology. They thought portals were the big money-spinner, with search being a necessary but uninteresting part.
Big mistake. Search turned out to be one of the most important web categories, with Google leveraging its advantage to become the dominant internet company.
Business isn't the only area where exploring overlooked niches can pay off. When I was a young man looking to meet women, most of my peers were following only one strategy - hanging around in singles bars. That just seemed to them the best place to meet attractive women, and it's true that some of the lucky ones did succeed. The problem with that tactic was that everyone else was following it too and the competition was stiff. Often, there'd by four guys to every girl in most singles bars.
Meanwhile, the smart guys were looking in places most didn't. They joined dance classes, charity organizations, and creative writing groups. They went to where there was lots of young women, and hardly any men. With reduced competition came increased success.
Friends are another field where the overlooked can often bring the best advantages. In school, most people try to make friends with the most popular kids. But such kids know they're a scarce resource, and treat their suitors badly. Instead, making friends with the kids who aren't the best or most popular usually pays off - in loyalty, help and availability. I've gotten a lot more friendship-wise, over the years, from my less popular friends than the "cool guys".
And of course there's the real estate market. If you want to buy in a famous area, expect to pay high prices due to the competition. Buy somewhere less well known, and you'll probably get something just as good at a much lower price.
When you study people who are really successful - in business, love, friendship and lifestyle - you find it's often those who start out in the disregarded areas who get ahead. Spend time looking where the crowds aren't, and you'll often be surprised at the good things you'll find.
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