Large companies often focus R&D on high-ticket items, neglecting smaller accessory categories. This creates a market gap for focused startups to innovate and solve specific problems that bigger players overlook, allowing them to build a defensible niche.

Home Depot succeeded by "counter-positioning" against incumbents like Sears. Their high-volume, low-price model was so different that if Sears tried to adopt it, they would have damaged their existing high-margin business. This strategic dilemma paralyzed competitors, allowing Home Depot to capture the market.

When large appliance companies like Dyson entered the premium hair tool market, T3 was initially intimidated. However, their massive marketing budgets raised overall category awareness and normalized higher price points. This repositioned T3 as an 'affordable luxury' and ultimately boosted their business, demonstrating that new competition can grow the pie for everyone.

Rejection from Adidas and Puma forced Dick's to partner with an unknown Nike, which became a huge growth driver. Similarly, being strong-armed into selling apparel revealed a highly profitable new category. This shows that external constraints and unwanted demands can accidentally steer a business toward its biggest opportunities.

Major retailers often dislike when a single large company, like Zen in nicotine, dominates a category. This gives the incumbent too much leverage on pricing and placement. Consequently, retailers are often receptive to new, high-potential brands that can introduce competition and shift the power dynamic back in their favor.

When the founders learned that major competitors were buying their shoes for reverse engineering, they correctly interpreted it as a signal. This confirmed their innovation was significant and created urgency to find a strategic partner and scale before being copied.

Focusing solely on direct-to-consumer (DTC) or wholesale is a failed strategy. Nike's retreat from wholesale and Allbirds' late entry into physical retail both backfired. A balanced, multi-channel presence is now a non-negotiable for consumer brands to meet customer expectations.

For new CPG brands, aggressive marketing before achieving near-national distribution is a critical error. When excited customers can't find the product in their local store, they often buy a competitor's alternative (e.g., White Claw instead of Happy Dad). This funnels demand and new customers directly to established rivals.

When a Home Depot store became too successful and couldn't handle more volume, the company's solution was to open another one nearby. This self-cannibalization strategy allowed them to capture total market share, ensuring customers bought from a Home Depot, even if it meant stealing from an existing location.