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To Succeed You Must Make Yourself Indispensable People who can be easily replaced can never command the big bucks.

By Steve Tobak

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Everyone has favorite products. At this point, I doubt I could live without my old Pasquini espresso machine, Vitamix blender and Apple everything. I'd be lost without my auto mechanic, my CPA and the woman who cuts my hair. The question is, who can't live without you?

I'm not being facetious here -- it's a serious question. Said another way, are you and what you do for a living indispensable, or can whoever writes you checks simply replace you without suffering more than a slight inconvenience?

I bring this up because I think a lot of you are confused about important concepts like differentiation, entrepreneurship and competition. Here's the thing. A cool logo may be different, but that is not the same as differentiation. Generating content for peanuts is not entrepreneurship. And all markets are competitive markets.

Related: 4 Ways to Differentiate Your Brand in a Congested Marketplace

Those concepts matter. They matter a lot. You will never achieve any sort of career success unless you understand how they work. Allow me to explain.

Everyone starts out more or less as a cog in the big work wheel. Some of us are smarter and more gifted than others, but in the beginning we all do our jobs pretty much the same way. Then something happens. Some of us outdistance the pack and become indispensable. Those are the folks who ultimately make the big bucks.

The thing is, that doesn't happen by itself. Nobody is going to throw gobs of money your way until you figure out how to be great at something that really matters to them. After all, why would they? Would you pay a contractor or consultant beaucoup bucks unless he's better than the competition at what really matters to you? Of course not.

You can't command a premium unless you have a premium brand, and you can't have a premium brand unless you deliver the goods – a better product and service than the competition in ways that matter to whoever writes you checks. That's just the way it is.

Related: 3 Must-Use Tactics to Differentiate Your Company From the Competition

You can get plenty of blenders for $100, but a Vitamix will set you back four or five times that. You can get a Krups super automatic espresso machine for $500, but Pasquini's Livia goes for upwards of $1,500, and that's without the burr grinder. And you can get all kinds of smartphones for a fraction of what Apple charges.

Vitamix, Pasquini and Apple are all premium brands that can charge an arm and a leg because their products are the best in ways that really matter. That goes for services, too.

IBM agreed to pay Microsoft pretty much whatever Bill Gates wanted to deliver a crummy modified DOS operating system because it couldn't get anyone else to do it. There was no competition. And at a few bucks in royalties for each personal computer sold for upwards of $2,000, the suits at Big Blue actually thought they were getting a good deal.

Google wasn't always the best search engine. In fact, it wasn't even in the top five by market share at the turn of the millennium. But it was the first and only to offer a flexible targeted advertising service, AdWords. That was a differentiated value proposition that customers really wanted. The rest, as they say, is history.

GrubHub may have been the first one-stop online food delivery service to reach scale, but it's important to get the cause and effect straight. It was the first one-stop online food delivery service that worked as advertised, guaranteed delivery and was easy to use. It literally delivered the goods. That's why it reached scale.

All those companies command premiums because their products and services are hands-down better than the competition. Their founders got rich because they solved a problem that really mattered to customers. But if they ever stop innovating, I guarantee that, sooner or later, the competition will overtake them, and that will be the end of their big fat profit margins.

Related: When Does It Make Sense to Pay Employees Above the Average?

Don't buy all the feel-good nonsense you read. Whether you work for someone else or go the entrepreneurial route, the laws of supply and demand apply just as much in today's internet economy as they ever did. All markets are competitive markets. And until you understand that, you will never make it big in this world. That's all there is to it.

Steve Tobak

Author of Real Leaders Don't Follow

Steve Tobak is a management consultant, columnist, former senior executive, and author of Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur (Entrepreneur Press, October 2015). Tobak runs Silicon Valley-based Invisor Consulting and blogs at stevetobak.com, where you can contact him and learn more.

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