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.

The founder of restaurant 11 Madison Park used "reverse benchmarking" by analyzing competitors not for their strengths, but for their weaknesses. Identifying and perfecting an overlooked detail, like their rival's merely average coffee service, created their competitive edge.

The number one US sit-down chain, Texas Roadhouse, succeeds by defying the industry trend of using pre-prepared frozen food. Its competitive advantage comes from two key factors: performing scratch cooking in-house (e.g., cutting vegetables) and maximizing table turnover with a high server-to-table ratio.

When launching into a competitive space, first build the table-stakes features to achieve parity. Then, develop at least one "binary differentiator"—a unique, compelling capability that solves a major pain point your competitors don't, making the choice clear for customers.

A bespoke tailor is expected to provide luxury service; it's table stakes. However, a tire shop or contractor that delivers the same level of care and proactivity creates a far more powerful differentiator because it shatters customer expectations, driving powerful word-of-mouth.

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.

Systematically identify frustrating moments in the customer journey, like waiting for the check. Instead of just minimizing the pain, reinvent these moments to be delightful. Guidara’s example of offering a complimentary bottle of cognac with the bill turns a negative into a generous, memorable gesture.

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.'

Businesses often fail by selling a generic category instead of specific experiences. A restaurant doesn't just sell "food"; it sells a bar experience, a tasting menu, and private events. By explicitly defining and selling these offerings upfront, businesses can match customers to value and significantly boost revenue.