If you walk through a forest, you’ll see a limited number of species of trees.  Depending on where you are, this will probably be smaller than you can count on your hands.  Why aren’t there more?

There are only so many resources in a patch of earth that a tree can use to grow.  Each of the species uses different requirements and advantages to compete for and use the available real estate in a forest.  Where the edge of one species advantages end another species begins.  For example, one needs a lot of sunlight and won’t grow in the shadow of a hill where another grows best with shade.  

For each of these categories of context, a species survives and reproduces the best.  This results in them dominating that spectrum in the forest.  They fit best there.

The market is the same way.  The resources and energy available in the market pull solutions into existence to address the available contexts.  Horror vacui or “nature abhors a vacuum,” is how Aristotle described this effect.

If there is a market, there will be a limited number of kinds of solutions in it with dominant market leaders.

As it pertains to growth, if you intend to grow in a way that serves more customers you need to out compete an existing leader.  This doesn’t mean you have to be better than them, rather that you have to be a better fit for the environment.

For example, Blockbuster was a much better experience than getting a DVD out of a vending machine.  But vending machines could be in more places cheaper than Blockbuster and better tap the available customer demand.  They were a better fit for the environmental context.

Innovation is how you out compete a market or niche leader.  

The mistake we make is that we innovate with no anchor.  We think about what could be, but without the filter of how the market needs are currently met.  A market or niche leader should be that anchor.  They’re the best representation of market context and the current optimal path to fit into that context.

So if you’re aiming to make a transformative jump in capability or capacity, the place to start is by analyzing the small set of leaders in your target market and how they fit.

Featured image is Herbert Spencer, the man who coined the phrase, “survival of the fittest.” The image is public domain.