The key to business success is dumb competition

I know it sounds harsh when you first hear it. Almost like wishing everyone else would just suck at what they do. But that’s not quite the point. This idea comes straight from Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway for decades. He once told the founder of Flexport something like, “The key to success is dumb competition.”

Munger wasn’t being mean. He was being practical. What he really meant is this: look for (or build) situations where the competition is embarrassingly weak. Where the players are lazy, complacent, outdated, or just sloppy. In those kinds of markets, you don’t need to be a once-in-a-generation genius to dominate. You just need to show up and not be dumb.

Most people chase the shiny, crowded spaces. AI in 2026? Wall-to-wall PhDs and former Big Tech stars battling it out. Fintech? Every venture fund’s favorite sandbox. Social apps? Brutal. Those are high-IQ knife fights. You can be brilliant and still bleed out because the margin for error is razor-thin and everyone is moving fast.

Now look the other way. Find industries that haven’t really changed in decades. Freight forwarding before Flexport arrived was still running on faxes and ancient spreadsheets. Ryan Petersen basically said, “Let’s put this whole thing on the internet properly.” That was enough to disrupt an entire sector. He didn’t outsmart Nobel-level minds. He just brought basic competence to a field full of mediocrity.

The pattern shows up again and again:

Apple didn’t invent the MP3 player in the early 2000s. They were everywhere already, ugly and confusing. The iPod won because it was clean and intuitive in a world of terrible design.

Early Amazon didn’t face the likes of Barnes & Noble. Barnes & Noble and Borders were busy fighting over physical shelf space while Bezos built warehouses and obsessed over fast shipping.

Plenty of “boring” SaaS businesses are quietly printing money right now because they serve legacy industries still stuck on Excel and email chains. The competition isn’t weak; it’s barely there.

The takeaway is simple: outsized returns often come from ordinary competence in low-competence environments.

So how do you actually go after dumb competition without sounding cynical?

Hunt for sleepy sectors. Ask yourself: where are customers still quietly suffering because nobody bothered to fix obvious pain points? Construction tech, waste management, commercial insurance quoting, and local trades. Places where modern software barely exists.

Skip the status games. It feels good to say “I’m building in AI” at a dinner party. But if every sharp person you know is already piling in, that might be your cue to look somewhere else.

Think poker. Munger loved the analogy. The best players don’t just play great hands; they pick soft tables. Business works the same way. You can be solid, but if you’re always up against world-class opponents, you’re fighting for crumbs. Find the table where people are bluffing badly and folding too often.

Focus on not being stupid. Munger also said the real advantage is just avoiding dumb mistakes consistently. In a complacent industry, simply answering emails promptly, delivering on time, and keeping promises creates a significant gap.

This doesn’t mean you stop pushing for excellence. You still obsess over the product, the customers, and the team. But you give yourself a massive unfair advantage by choosing the right arena.

A lot of “overnight successes” weren’t smarter than everyone else. They were just playing an easier game.

Next time you’re evaluating an idea, ask the Munger question: Is the competition here kind of dumb?

If the answer is yes, lean in hard.

If no, maybe walk away.

It’s not pessimistic. It’s strategic. And once you start seeing the world this way, it feels incredibly freeing.

You don’t have to be the smartest person in the room. You just have to pick the right room.