Imagine you are in New York, without a phone and no way to communicate with a friend who is also in the city. You need to meet up with them at some point today. There are no instructions, no clues.
Where would you go? In the 1960s, economist and game theorist Thomas Schelling asked this question to a group of people. Most responded the same way: at noon in Grand Central Station.
No one had agreed on that spot beforehand. No one was certain their friend would think the same way. Yet, most people converged on the same idea.
The Power of Focal Points
This is Schelling's principle in action: in the absence of communication, people tend to choose intuitive focal points to coordinate their decisions. Schelling's principle, for example, explains why Amazon dominates e-commerce. When people think about buying something online, they think of Amazon. It is the focal point of e-commerce. Or why the dollar remains the global currency. Not because it's the best, but because it's the focal point of international trade. Focal points have a gravitational pull.
They aren’t necessarily the best, but once established, they are hard to move.
How to Leverage Schelling's Principle
If you can get people to associate your brand with a central idea, you become the reference point. We like to think we make decisions logically and analytically. But in practice, many of our choices are guided by pre-existing focal points. When you’re short on time and need to choose a restaurant, you go to the one that feels familiar. Similarly, when an industry is being defined, the first company to position itself as the reference point wins by inertia.
In the game of strategy, perception is as important as reality. And often, winning doesn’t mean being the best, but being the first to become the reference point.
Bruce Lee said, "Rules are there for people who can’t think for themselves."
Society loves absolute truths:
• "Positive thinking is everything."
• "Without a university degree, there’s no success."
• "Brilliant ideas are the key."
• "You need money to make money."
• "Never give up."
But reality is more nuanced... Positive thinking is powerful, yes. However, sometimes we need to see reality as it is. University is the path for some. For others, it’s a debt trap. Brilliant ideas are abundant. The graveyard is full of great ideas; execution is what makes the difference.
Money can multiply your success or accelerate your failure. And sometimes, giving up is the smartest decision. To free up resources. To find a better path. Life isn’t black or white. Success lives in the gray areas.
The smart entrepreneur thrives in a space where nuances exist. And they are comfortable with them. The reality is that true success has always belonged to those who dare to break the rules of the game. To those who dare to write their own manual.
"Most people overestimate what they can do in one year and underestimate what they can do in ten."
– Bill Gates
Your Reference Point
The key to becoming indispensable in your market, If Schelling's Principle teaches us anything, it’s that perception is everything.
The brands that dominate aren’t always the best. They are the ones that manage to position themselves as the inevitable reference point in the customer’s mind.
📍 Amazon isn’t just an online store. It’s the online store.
📍 Starbucks doesn’t have the best coffee. It’s the coffee that comes to mind when you think of a to-go coffee.
📍 Tesla isn’t just an electric car. It’s the electric car.
And in your industry, who holds that position? If it’s not you, you’re just another option.
Do you want to stop being just another alternative and become the reference in your sector. Join us we’ll work with you to:
● Identify how strong your current focal point is in the market’s mind.
● Define how to position your brand so it becomes the obvious choice.
● Find the message that will make your competition disappear from the equation.
📌 Because in a world where people choose instinctively, if you’re not the reference point, you’re irrelevant.