Niches
Each species occupies a survival strategy. Two competing for the identical niche tend toward one's extinction.
A niche is an organism's place in its ecosystem: what it eats, where it lives, when it hunts, who its predators are. Niches are usually narrow and specific. Two species competing for the identical niche typically can't coexist; one drives the other out (competitive exclusion).
The principle applies to businesses, careers, and products. Two companies competing for the identical customer with the identical proposition tend toward consolidation; one wins. Differentiation isn't optional; it's how you avoid the exclusion principle.
For operators, the practical version is: find your niche, occupy it, defend it. "We compete with X but better" is usually a losing position. "We do something X doesn't, for customers X doesn't serve well" is usually a winning one.
Examples in the wild
Vertical SaaS companies dominate by finding niches the horizontal players don't serve well. Once they own the niche, expansion happens from a position of strength.
Companies that share a niche with a stronger competitor are usually bad investments. The competitive exclusion eventually plays out.
Career-wise, finding a niche where you're unusually good is often more valuable than being slightly above average in a crowded niche.
Niches is one of the mental models we apply through real cases inside the Pareto MBA — a part-time program for professionals who want to think clearly about business.