"Competition is for Losers" - Peter Thiel There is a lesswrong post about being the (pareto) best in the world, that essentially argues that when viewed in the appropriately high number of dimensions in the skill space, you can find yourself on the pareto frontier, where no competition exists, and you are quite literally, the best in the world. It is worth thinking about this in the context of quantitative finance as well, I like to imagine that every space (defined as some combination of dimensions, e.g. asset_class x region x ...) has a limited amount of capacity, and once there are too many blokes occupying the same space, performance degrades because too much money is flowing into the same space. The total amount of pnl in the space remains the same, but pnl/team decreases as a function of crowdedness, affecting teams further away from the pareto frontier than teams sitting on the frontier. This causes weaker teams to have pnl drop into the negative or below operational costs, and thus gets washed out. The teams sitting on the frontier are then able to get breathing space and generate more pnl with less competition... until more teams come in and the cycle repeats. Both Index rebal and statistical arbitrage in US feels adequately saturated that this cycle is in play every few years, mostly because the teams sitting on the pareto frontier are so good and so well capitalized, that they can survive the crowded years, and live until the weaker hands get washed out. When building a team, starting a project, or raising for a firm, it is worth thinking hard about where you are trying to find this `elbow space`. Firms that have gotten very very large, very (relatively) quickly have all done so sitting on a pareto frontier that was not previously occupied (e.g. XTX, eqvilent...). Firms that have remained behemoths have done so by sitting on the pareto best of the largest and most competitive markets and being well capitalized enough to survive the washout years to reap the "good" years.