Importance of competitors?

Jim O'Shaughnessy emphasizes that having competitors is crucial in business. He argues that if a market lacks competitors, it's an indication that the market might be unviable. Competition validates the market and drives companies to innovate and improve their offerings. If a business finds itself without any competitors, it suggests that they might be operating in the wrong market or missing a significant element that others are not pursuing 1.

Additionally, O'Shaughnessy discusses that the tension caused by competition leads to specialization and increased efficiency. However, he also warns against too intense competition, as it can stifle creativity by not allowing for sufficient exploration and experimentation. Effective slack, or room for creativity, comes from balancing competition with spaces where novelty can emerge 2.