Choosing Bad Competition

This post is by Reid Hoffman from Reid Hoffman

As an entrepreneur, it is theoretically possible to find an opportunity that is extremely valuable, but is still unrecognized by serious players. But that combination of circumstances can be so rare that it’s like being struck by lightning. When assessing whether the primary components of a viable business endeavor are present, the most important thing is to be able identify the valuable opportunity. You are far better off pursuing a high-value opportunity with bad competition than a low-value opportunity with no competition.

Therefore, the great strategy is not to try to find a competition-free market. Rather, you should seek a valuable market with bad competition. This advice, of course, begs the question, “What is bad competition?”

This essay and accompanying podcast look at a fundamental law of entrepreneurship. You can listen to the podcast here.

These laws apply to every entrepreneurial endeavor, not just high tech startups, though we’ll still spend plenty of time on the technology industry. The first law we’ll examine here is: Choose a field with bad competition.


When people hear the term “bad competition,” many might think this refers to incompetent or foolish competition. But this is not necessarily true. In fact, bad competition can occur even when you are competing with smart, hard-working people.

I believe there are three fundamental types of bad competition. They are not mutually exclusive; in fact, all three could apply to a single opportunity! But bad competition must fall into at least (Read more…)