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On hypercompetition
When you look back at how startups used to get built, it often started with a few friends in a garage, tinkering on something no one else had quite figured out. There was a lot of friction: getting parts meant scouring catalogs or driving across town, and learning how to code involved dusty books from the library. That friction created space. It let ideas simmer, and sometimes, by accident, you'd stumble into a goldmine. A side project could turn into something huge because not everyone had the same shot at it. But now, things are different. We've smoothed out so much of the world that competition isn't just fierce—it's everywhere, all at once. We've entered an age of hypercompetition, where everything is so efficient and transparent that the random joys of discovery start to feel like they're fading away.
Hypercompetition transcends increase in number of competitors per se. I mean fundamental changes in how the economy and society work. Continuing the conversation about friction and complexity—society got what it wanted. Airline tickets can be bought from a phone, AI writes code for programmers👨💻, and knowledge that people accumulated over years of experience is available in the first response from a neural network. But reducing friction doesn't always just simplify things—it amplifies them and leads to the emergence of new ones. Simplifying search led to the appearance of Google's monopoly, which has occupied its niche so firmly that the company's name became a verb.
Despite all this progress, people haven't started working less. As soon as something becomes cheaper, there's more of it. Cheap coal leads to greater demand from people who can afford it at the new price (fakepixels.substack.com/p/jevons-parad…), and greater demand leads to intensified competition. Fast-forward to today: AI makes coding 10x faster, but does that mean engineers work less? No. Expectations rise. Now you need to build 10x more features, iterate 10x quicker. In the end, to stay in place, you have to run even faster—welcome to the Red Queen’s race🏃♂️.
Then there's Radical Transparency. Information long alpha became beta (notboring.co/p/hyperlegibil…). Everyone bends over backward to share the numbers used to be kept private👌. Venture funds publish their theses online to attract founders and capital. Companies post ARR numbers on Twitter. Even personal "user manuals" explain how to work with someone. Why? Because attention seems to be the only scarcity. In a sea of noise, you have to make yourself legible to stand out. Which leads to a dominant strategy of being transparent. Strategies that worked in opacity fail in the light.
Look at the broader world dynamics, as @nntaleb points out (nntaleb.medium.com/the-world-in-w…): Connectivity supercharges winner-take-all effects. It is not bad in itself, but it makes it difficult, and sometimes almost impossible, to compete with leaders who have settled at the top. The only possible way to disrupt the status quo is to create new markets, as ChatGPT recently did for AI.
Hypercompetition forces innovation🧪. Entrepreneurs might pivot to depth over breadth—focusing on human elements AI can't touch, like trust or authencity. Or redefine success: not dominance, but joy. Touch grass, as they say. Build not for scale, but for meaning.
In the end, you can always try to create the new market and stick at the top. As we have learnt today, it is a good place to be at.
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