The psychology behind this day
The Four Actions Framework (Blue Ocean Strategy, Ch. 2): Kim and Mauborgne's insight — competing head-to-head in an existing market means competing on price. The alternative: redefine the competitive factors entirely. Eliminate what the industry assumes is necessary. Reduce what's over-delivered. Raise what's under-delivered. Create what doesn't exist. The result is a market space where you have no direct competitors.
The Contrast Principle (Pre-Suasion, Ch. 6; Psychology of Human Misjudgment, #17): People don't evaluate things in absolute terms — they evaluate by comparison. Munger calls this "contrast-misreaction tendency." If all your competitors look and sound the same, the customer's only remaining comparison variable is price. Differentiation isn't a luxury — it's the mechanism that removes price from the equation.
Competition vs. Creation (Zero to One, Ch. 3): Thiel's argument — "all happy companies are different." Monopoly (being the only one doing what you do) is the goal. Competition is what happens when you fail to differentiate.
The Lesson
The Four Actions Framework
Find your positioning with these four questions
Eliminate
What does your industry assume is necessary that you could remove entirely?
Reduce
What is over-delivered that customers don't value?
Raise
What is under-delivered that customers care about?
Create
What can you offer that nobody in your industry does?
But here's the truth
Most markets are crowded. That's okay. What matters more than a USP is a unique selling experience.
People judge experiences by the emotional peak + ending — one memorable moment defines the entire relationship
When people feel safe and positive, they're more open to buying. When anxious, they retreat to the familiar.
Today's Exercise
- List 2–3 direct competitors.
- For each of the four actions (Eliminate, Reduce, Raise, Create), brainstorm at least 2 answers specific to your business. If you find a genuine blue ocean — great. If you don't — that's fine too. Move to step 3.
- If your market is crowded and there's no obvious blue ocean: Audit your competitors against the four-step framework (Find, Trust, Understand, Buy). Where are they weakest? That weakness is your opportunity — not because you're different, but because you're better at the step they're neglecting.
- Draw or write your strategy canvas: on one axis, list the factors your industry competes on (price, speed, range of services, experience, etc.). On the other, rate yourself and competitors on each factor. Where do the curves diverge? That's your opportunity.
AI-Assisted (Strategy folder)
"You are a competitive strategy analyst who uses Blue Ocean Strategy and behavioural positioning frameworks.
My business: [business type] in [location] My main competitors: [list 2–3 with one line about each] My ideal customer (from Day 8): [paste your customer profile]
Using the Blue Ocean Strategy framework and the competitive positioning principles in this project, do the following step by step:
1. Map the current competitive landscape: what factors do all competitors in my space compete on? (Price, speed, features, prestige, convenience, etc.) 2. Apply the four-actions framework to find positioning that doesn't compete on price: What can I eliminate that my industry assumes is necessary? What can I reduce? What can I raise? What can I create that doesn't exist? 3. For each suggestion, explain the psychological principle behind why it would work with my target customer. 4. Identify the single strongest positioning move — the one that would be hardest for competitors to copy.
Format: Give me a completed four-actions framework as a table (Eliminate / Reduce / Raise / Create), then a one-paragraph positioning recommendation.
Before you answer, ask me questions about my business's current strengths, constraints, and what my customers complain about with competitors."
Output: A completed Blue Ocean Strategy Canvas with specific positioning moves.