Instead of copying what top competitors do well, analyze what they do poorly or neglect. Excelling in those specific areas creates a powerful differentiator. This is how Eleven Madison Park focused on rivals' bad coffee service to become the world's #1 restaurant.

Benchmarking against direct competitors is useless if the entire sector lags in partnership maturity. To truly improve, measure your program against best-in-class companies in adjacent or even unrelated domains to set a higher, more aspirational standard for success.

Over-diligencing for well-rounded perfection is a mistake. The best companies rarely excel in every area initially. Instead, investors should identify the one "spike"—the single dimension where the company is 5-10x better than anyone else—as this is the true indicator of outlier potential, rather than looking for a company that is A+ across the board.

The venture industry has outliers who seem to 'walk on water' and others who get lucky. Constantly measuring your progress against theirs leads to dissatisfaction. The better approach is to focus on executing your job, which leads to long-term, sustainable success and pride.

Business owners often misjudge their performance by looking at metrics in a vacuum. A seemingly low 0.35% conversion rate is actually strong when contextualized against the 1% industry standard. Benchmarking prevents discouragement and enables realistic goal-setting.

Small business owners often compare their margins to industry standards like 10%. These benchmarks are based on large corporations with massive overhead. Online businesses, especially those selling digital products or services, should aim for significantly higher margins and not use irrelevant comparisons.

Instead of fixating on competitors, Red Ventures built its success by focusing on compounding its own performance month-over-month. This internal benchmark created a virtuous cycle addicted to incremental improvement, which became a more powerful and sustainable growth engine than reactive, market-focused competition.

The fundamental goal is to become a "better competitive alternative" for a specific customer—being so superior that they bypass competitors to choose you. Achieving this state is the business equivalent of the house advantage in a casino (“the house vig”) and the only reliable way to build a lasting enterprise.

Instead of matching rivals' strengths, identify their weaknesses or overlooked details, like a poor coffee program. Focusing on these neglected areas allows you to create a unique, best-in-class experience and gain a competitive foothold. Guidara's team calls this 'reverse benchmarking.'