What is competition?

Competition arises when two parties strive for a goal that can’t be shared.

Can you eat while I eat? Sure, if there is enough food to go around. If not, it’s competition.

Can you sit while I sit? Of course, but not in the same chair. If there is nowhere but that chair to sit, it’s competition.

Competition in an economy serves a purpose, to figure out what is fair.

What is a fair price?

If your competition will charge less, than perhaps you can charge less, until it’s no longer worth being in the business. Eventually the industry settles on a range.

Competition isn’t just price fairness, but features as well. Should a consumer only expect an 8 hour window for a plumber appointment, or should plumbers expect to provide an accurate 2 hour window to the consumer if they want to be in business?

Competition is great, it gives us choices, it creates a market, it chooses the feature list. It’s also terrible if the competition is too direct. For example, every industry has a competition based on price, that’s not what the consumer is always seeking.

Take babysitting. As I became a parent, the thought of finding the lowest cost babysitter terrified me. I’m going to leave my child with someone who says, “I’m the most qualified, responsible, or best cook.” but not one that says, “I’m the cheapest.”

Not every consumer is looking for the cheapest. That doesn’t also mean they can tell you what they are looking for. They’ll know it when they see it. Some may want that funny babysitter. Some may want the great cook to watch their kids. Some may have a limited budget. At least by setting the differentiators clearly, everyone is competing, while the market is also deciding what it values.

The world seems to value competition. It does serve a purpose, but in a world this big, one must ask, do we have to compete? And how much? That’s something I still don’t have an answer to.

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