There is a famous business strategy established by Jack Welch, the former CEO of General Electric.
"If you are not number one or number two, fix it, sell it, or close it."
Remarkably simple. But following this exact rule, GE boldly sold off its appliance, electronics, and broadcasting businesses. The truly shocking part is what happened after. GE's market capitalization absolutely exploded.
When Jack Welch took over in 1981, GE's market cap was roughly $10 billion. By the 2000s, it had surged to $400 billion. By sticking to one dead-simple rule, he multiplied the company's value 40 times over.
His logic was straightforward. The world is structured so that first and second place take almost everything. To maximize profits, you have to be one of them. Through this basic strategy, GE became the most valuable company in the world in the 2000s.
There is exactly one lesson to extract from this. You must become number one or number two.
Now, if you have read this far, you are probably thinking: a massive corporation like GE going all-in on what they do best makes sense, but what does that have to do with me? Let's talk about how you and I can actually get there.
This mindset is shared by all great entrepreneurs. As I discussed in What Successful Solo Founders All Agree On About Building a Business, true long term vision always starts with refusing to play a crowded game. Instead of fighting for scraps in a massive market where everyone else is bleeding, you carve out a tiny space where you hold absolute control.
Create Your Own Category to Survive
Seth Godin, the guru of modern marketing, explained how to become number one this way.
"Create a category where you can be number one."
Do not compete in already existing categories. Build your own. Start as the market leader inside the specific space you just created.
The reason you have to start as a market leader is simple. It is the only way to permanently stick in people's minds. Middle-of-the-pack companies simply do not register in the human brain. Nobody knows the third or fourth best company making wireless earbuds. In today's era of extreme information overload, people only remember number one and number two.
This perception of being the market leader can be used as massive leverage. You can use it to transcend price competition entirely, or to expand aggressively into different fields.
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| Apple AirPods dominating generic brands on Amazon through pure market leadership |
Search for earbuds on Amazon and you will feel how powerful this is instantly. Most generic earbuds are priced between $20 and $30. Apple's AirPods easily cross $70 to $100. Yet so many people, myself included, overwhelmingly prefer AirPods even though they cost more than double. Why? Because we have no idea who those other brands are, and we simply do not trust them.
The perception of being number one allowed Apple to completely bypass price competition.
It also fuels expansion. Meta started as a simple social network and free messaging service. Now they are aggressively stretching into Meta Pay, Facebook Marketplace, and the virtual reality ecosystem. Because they hold that powerful brand image, they are leveraging it to reach into every possible field.
Almost all massively successful companies start as market leaders. They do not jump into crowded existing categories from day one. They start as the undisputed leader of a tiny market, then use that leadership to gradually expand outward.
This is exactly why you and I need to create our own categories and start as market leaders inside them. No matter how small that market might be. Because that is the only way we will ever be recognized.
How Frustration Births New Markets
So how do you actually create your own category? You have to figure out exactly what is frustrating you right now. If you are feeling uncomfortable or frustrated by something, it means a solution to that problem does not exist in the world yet.
Here is a personal example. I loved listening to podcasts featuring business masters and was deeply interested in business models. But the principles these masters taught felt way too abstract for an ordinary person to actually apply. It felt like you needed some massive ambition to change the world just to use their methodologies.
But I knew myself well. I was not someone with that kind of grand ambition, and I was certainly not a leader meant to guide the masses. More than anything, I just wanted to start small and simple.
I could not find a guide for this anywhere. On YouTube, there are countless channels translating what famous business tycoons say, and plenty of channels talking about small businesses. But there were almost zero channels actively applying the principles of these grand masters to actual small businesses and one-person operations. At least not when I started.
So I brought the principles of the masters into the world of small business. I applied their high-level methodologies to one-person businesses running on social media. And using their principles, I created my own small products and services.
I had almost zero competitors in this specific space, and because it was crucial information for people just starting out, the demand was clearly there. Creating this product was exactly like creating an entirely new category. Because I had no competition.
To discover your own category, dig deep into the frustration and discomfort you are feeling right now. If you are feeling that way, it means the solution does not exist yet. That specific void naturally becomes your own category.
Going All-In to Protect Your Category
Simply creating your own category is not the end of the game. To stay number one inside that space, you have to pour absolutely everything into it.
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| How Amazon built a massive ecosystem through endless ruthless reinvestment |
The Amazon we know today started with one massive goal: to sell every single book in the world. That is exactly why they named the company Amazon. The Amazon rainforest contains the most diverse ecosystem on the planet.
To achieve this goal, Amazon aggressively reinvested every single penny they made. They started by partnering with Ingram Book Group, the largest book wholesaler in the United States. Then they took all that money and reinvested it to build the Marketplace, a system where individuals could trade directly with each other. Through this, people could finally buy rare, used books sitting on other people's shelves.
Because of this endless, ruthless reinvestment, Amazon suffered a deficit for seven straight years. But because of that exact sacrifice, they transformed into the company that sold the most diverse range of books in the world. And ultimately, they became the behemoth that handles almost every single item in existence.
To stick in people's minds, you must create your own category. Whether it is a core message or an actual product. Start as the market leader in that tiny space, and people will begin to recognize you. Once they do, you can use that perception as leverage to expand into countless other things.
If you have read this far, I know you are deeply interested in business. I genuinely hope that both your business and mine achieve massive success.
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