Gems and garbage: redefining competition

Amazon, similar to Google, is facing a challenge of its own making. While AI technology is still in its infancy, its initial applications hint at its future direction. Much like the early days of the web brought us porn and news sites that morphed into text and video, AI is beginning in content creation and publishing. Like the canaries in the coal mine, these two examples point to one of the biggest challenges AI is already presenting. How do we pan for gold in a tidal wave of content?

Amazon has already had to put a cap on book self-publishing to thirty per day at last count. I personally find this discouraging as I am not even halfway through my neighbour’s self-published accounts of his daily skin care routine and thanks to AI he is now branching out into a series of daily novellas whose key protagonist is a skin care evangelist who wanders town to town trying to turn sagging frowns around. This flood of content will present a challenge that even the current kings of the algorithm world will struggle to solve.

In ecosystems individuality is cherished. In large-scale human systems it is often crushed. These are not my words and they are not even from this century. They are a paraphrase of Loren Knox, who authored an article way back in 1909 in The Atlantic called ‘Our Lost Individuality’. He lamented and argued that our focus on making standard stuff for the many had forced the hurried and ill-favoured growth of vast corporations that had started to control culture. He was anti-breakfast cereal (too easy apparently, F U Kellogg’s), thought that record players gave music over to all (bit of a hot take) and believed that standard education was removing the joy of discovery (tend to agree). I wonder what he would have thought of sampling, TikTok crazes and doomscrolling.

Knox’s central point was critiquing rising materialism in the world and how a rising tide was making the boat more boring for all rather than more interesting for more. In nature, DNA ensures that everyone is individual but systems favour endless repetition. Knox is a bit of an undercover business leader from last century much like my favourite from this century, Queenstown NZ based doomsday prepper, Peter Thiel.

Thiel's CS183 class notes and the resulting book Zero to One spell out the situation faced by all brands today (link below). If you read nothing else to understand our modern age, read this. There are lots of salient points in it, but the main one Thiel makes in these classes is that the object of business is not to compete. The object is to escape competition and get to monopoly. Or, put another way, in business to win is to get to one.

Singularity

The chase to one is everywhere. Why? Brand loyalty is to the channel, not to the thing contained within it. This is why like Amazon, supermarkets now want to secure your loyalty outside the store and sell the ads you see within it. It’s more profitable than selling food. Airlines want you to fly with them, shop with them, and get your home loan with them. Banks now even want to offer you reward points through their own programs rather than the one provided by an airline. While I love me some media effectiveness metrics, it is becoming safer and safer to say that it does not matter. Time spent equals more dollars. It is the only metric that brands like Netflix and TikTok focus on. The time you spend determines everything else.

I was thinking about this having dinner on what was once Melbourne’s most bustling cheap eat strip. Victoria Street. Watching an old lady close-up shop, I could not help but hear the Menulog ad music playing through my head. She no longer has any control. It is DoorDash and Uber Eats that control the consumer relationship now and much like the lament of Loren above in 1909, it is pushing everything to homogeneity. It is kinda sad when the online menu is now the menu.

The tension in the thinking of Thiel is that what sounds great in a classroom fails the schoolyard test. There is always someone bigger, faster, braver or smarter. You never actually escape competition. If you don’t win it all, you end up committing to being a commodity.

Standing for the features, not for a universal belief

This used to be an affliction that only affected categories that tended to commodification. Products like screws, storage cubes and sugar. Now it is more and more a problem for the middle of any category. Not the biggest or the best but the pretty good.

Humans have shared needs. This universality likely stems from shared aspects of the human condition, such as the need for social connections, understanding the world, and making sense of one's place within it. The understanding of these shared human needs is not just a matter of philosophical or psychological interest; it forms the bedrock upon which the principles of marketing and branding are built.

In the complex interplay between human desires and the marketplace, brands therefore emerge as symbols that resonate on a deeply personal level, offering solutions, promises, and a sense of belonging. It is within this context that branding evolves beyond mere commercial transactions, becoming the way to intertwine emotional engagement with tangible benefits.

Branding was always used by those in the know to link functional proof points proved under a clear emotive idea to be different. I always think of products like Glad Bags, and how they become more than just items; they embody a promise of reliability and peace of mind, demonstrating how a brand can effectively translate functional attributes into emotional reassurance.

Stretched brands

The last fifteen years in brand theory have seen these legacy or latent assets stretched across more and more categories. At the heart of it is the fact that big brands must get bigger to avoid getting eaten by those sitting next to them. To avoid competition, it’s best to be the one that eats a category rather than the one whose category is eaten. They are not wrong. The world has fewer food manufacturers today than ever. No wonder farmers feel the need to do The 7:30 Report interviews incognito or on their way out of the industry having just ploughed their trees into the ground.

It is what I call Peak Sharpism. Bigger brands when stretched can and generally do win more, more and more. Why? efficiency. Fewer brands, fewer visual assets to reinforce. Basically the rent in your brain is cheaper and more profitable to the large corporate that is claiming it. Space in the head leads to space on the shelves. Mental Availability (media to build space in the head) leads to Physical Availability (space on the page or on the shelf). Everywhere you look this is broadly true. From Cadbury to Coke, from ANZ to Toyota. It is more effective to sell one brand of something with multiple variants than manage twenty brands of chocolate bar.

What I was taught in school as a normal distribution of a bell curve no longer holds true. In the world of software, you start to see totally different distributions as ‘normal distributions’. This has led to a world of bigger and bigger pitted against smaller and smaller.

The challenge for small is different than the challenge for big

For any major brand, the mission is straightforward yet challenging: to grow faster than the overall category and do everything possible to avoid becoming a commodity. In contrast, the objective for smaller brands is distinct and varies significantly. Small must take an asymmetric path to find a niche in your brain while big can buy their way there.

In the evolving landscape of AI, the challenge for small brands is to harness this technology to effectively compete with larger companies. The key lies in utilising tools such as narrative recombination, speed, and distribution, although this approach presents its own set of challenges and is not a permanent solution.

The pressing question becomes: In a world that is increasingly homogeneous, how can brands distinguish themselves? The answer is to get back to first principles and remember the foundations. Ultimately, the value we create is intangible, rooted in the exploration of human meaning.

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Be better to each other.