[levlandau]

I agree with the overall sentiment expressed in Thiel's monopoly theory. However, it seems like the whole problem is defining the market in the first place. We can define search, ecommerce and payments as part of larger markets and/or as fields which had many startups "competing" with each other. The ultimate winner ended up being a startup which was "10X" better on some dimension and thus blew past its "competition". The fact that successful startups start with a small niche seems orthogonal to whether or not "competitors" exist or whether the true market size is large. Even with this realization, it's not always obvious whether something is "10X" better than the existing alternatives. This is especially true when you aren't building something that can be easily measured along some dimension like speed e.g. a social network. Knowing that a network with real identity is 10X better than myspace is something that seems obvious in hindsight but would probably have been hard to justify to critics as enough of a difference to classify it as a startup that wasn't "competing" with Myspace, hi5 etc. dhouston is also on the record for saying VCs kept reminding him that there were thousands of "sharing and sync" startups when he decided to make Dropbox. Making a product that "just worked" was enough to render all "competition" irrelevant for years.

So what are we are left with? I think Thiel's advice boils down to:--> Do something that you have a strong intuition is >= 10X the existing alternatives. There is always competition because you cannot invent a new need and people are fulfilling their needs with something. However you can make the competition completely irrelevant by doing something so good that it is practically new and you'd do better not to go about your day to day with competition as your driving force.