Either be best-in-class or the most efficient. Anything in between gets squeezed out.
Software – Rarely do companies survive selling to the middle market. They might start with SMBs, but quickly increase their average contract value by targeting larger enterprises.
Venture capital – Mid-stage venture funds are getting squeezed at both ends: from early-stage firms with differentiated deal flow (solo GPs, sector-specific funds, brand) and growth-stage capital with fewer strings attached from family offices, cross-over funds, and sovereign wealth funds.
Education – Anyone with an internet connection can access recorded lectures from top universities on YouTube or learn a new skill from creators making videos on social media. In the future, you might choose to either learn the most efficient way (via online classes) or the best-in-class way (in person at top universities).
Retail – Why shop at any discount store other than Costco or Walmart? You either buy the cheapest undifferentiated items or the best-in-class items from a company with high brand equity. Fast-fashion vs. luxury brands.
Niche down or scale up.