In Zero to One, legendary investor Peter Thiel argues that for innovative businesses like startups, founders have already lost if they begin their idea by thinking about how they’ll beat out the competition. To him, not having competition is the whole game; he explains that startups should become so innovative at a particular thing that no competitors could offer an alternative. 

One of his former star protégés, Zuckerberg, did so by mastering the art of narrowing the market. Facebook was launched just for Harvard students, and it got 1,200 signups within the first 24 hours. Roughly one in six undergraduates at a specific school in Cambridge, Massachusetts, represents a community, and communities compound over time. Eventually, its user base grew to include Stanford, Columbia, and Yale students before finally opening up to everyone in 2006. By 2008, it had 100 million users. 

Similarly, Amazon only sold books when it launched in 1994. Bezos chose books because he understood that it was the singular category where his model had the most advantage over existing options: there were 3 million titles in print at the time, and no store could stock them all. An online store completely bypasses the existing problem, and the model was so specific that it had no real answer from existing players at the time. Netflix took a similar model when it launched as an online DVD rental service in 1998. 

These case studies illustrate the solution to the chicken and egg problem mentioned previously. You target your first 10 customers to find your first 1,000, but how do you go about finding those first 10? You make them feel seen and heard by creating a solution that solves their exact problem. 

Positioning is the essence of making a business that embodies the solution. In most cases, it should occur before the idea for the product even comes to mind. Find the pain, and dominate the niche associated with it. Build substance by understanding your customers, and price it like you mean it. 

The proof is in the positioning!