You won’t win today’s wars with yesterday’s weapons. The winners are always the innovators. Show me the man who has improved the most on yesterday’s technology and I will show you tomorrow’s winner.

In evolutionary terms, it’s called the Red Queen's hypothesis. It states that there exists a constant arms race in every area of your life. Simply put, we live in a competitive world and if we do not evolve and improve faster than our competition, we will lose. The misconception that most people share is that if they simply "get better" at something, they are on the right path to success. This is not true. It is possible to get better at a game and still lose that game. In fact, the tendency is that every participant in any given game gets better, yet still there is only one winner. The reason for this is that everyone playing will get better simply by playing. This process is built into each and every human being. The longer anyone does anything, the better they will get at it. This is the very thing that creates the Red Queen effect. You need to realize that everyone in the game is getting better at it as they play. You must put energy into your improvement just to keep up with everyone else. To win, you not only need to improve, you must do it faster than everyone else in the game you are competing against.

Let’s look at this from the perspective of two men who decide to have a running race. Jim and Karl are both 35 years old. One night while remembering their glory years in high school, they make a competitive bet. They agree to race each other in a one mile running race. The race is set three months from the time of the bet. Jim gets a personal trainer, and hires a nutritionist that came highly recommended by an ex-hockey player who lives next door to him. Within 10 weeks, Jim is running the mile faster than he was in high school. On the 12th week, he loses the race against Karl. How? Not because he didn’t improve, but because he didn’t improve more that Karl had. So how did Karl train? That’s the million dollar question. If Jim would have had those answers while he was training and could have improved on that technology, he would have won the race.

I see this in the business world time and time again and it seems that no one can figure out what is happening. The President of Acme Widget Company will sit down with his VPs completely confused at how month after month his sales people get more training, his costs of doing business get lower, and his product defect rate lessens, yet they lose market share every month. The answer is that they are sinking simply because all of their competition is swimming faster than they are.

When you understand how the Red Queen works, you come to understand the hidden economic factors of the Nth Step. You are about to understand the one thing that most of your competition will never discover on their own. In most cases, putting 90% of your energy into a project is wasting 90% of your energy. I know of no better way to waste resources than to put 90% into something. Never will you rob yourself of more than if you give it 90%. Sadly, this is how most of the world operates.

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