In 2014 Peter Thiel asked, “what valuable company is nobody building?” in his essay ‘Competition is for Losers’. But value creation isn’t enough, you must capture the value too. Airlines, for instance, provide one of the world’s most important services; shuttling millions of passengers across the skies every day. But they are terrible businesses. In contrast, a business like Google also provides a heavily used and valuable service; in search. One business competes with handfuls of others, in a race to the bottom. The other stands alone and soaks up gargantuan margins.

What separates the two businesses is market structure; one is situated in a perfect market and the other in a monopoly. Thiel remarks that Google “hasn't competed in search since the early 2000s”, which held true until recently. However, more evidence is needed before we can rule Bing a worthy adversary. Back then Google commanded ~68% of the search market. Today, it’s closer to closer to 93%.

Theil suggests the idea of a monopoly is often confused.

> "The confusion comes from a universal bias for describing market conditions in self-serving ways: Both monopolists and competitors are incentivized to bend the truth. Monopolists lie to protect themselves. They know that bragging about their great monopoly invites being audited, scrutinized and attacked. Since they very much want their monopoly profits to continue unmolested, they tend to do whatever they can to conceal their monopoly usually by exaggerating the power of their (nonexistent) competition".

> "Non-monopolists tell the opposite lie: "We're in a league of our own." Entrepreneurs are always biased to understate the scale of competition, but that is the biggest mistake a startup can make. The fatal temptation is to describe your market extremely narrowly so that you dominate it by definition".

The essay is littered with examples that highlight the nuances of competition, and unsurprisingly concludes with the idea that competition is something you don’t want; it’s for losers. I took the liberty of converting the essay into a PDF and I also found a presentation that Thiel gave on the same topic, but in a more expansive fashion.

> “In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can't”.