A smaller environment with fewer competitors may be the secret to a successful business.

The old adage is that bigger is better. Whether we’re working in a large company, a large city, or a large market, it’s often perceived as superior to places that have fewer people and competitors. But what if, by surrounding ourselves with such people, places, and institutions, we’re actually sabotaging our growth?

In his book David and Goliath, Malcolm Gladwell argues that the things we normally see as disadvantages have hidden strengths, making them powerful. What is initially perceived as an obstacle can be the secret to victory. Through various examples, he argues that it’s better to be a Big Fish in a Little Pond than a Little Fish in a Big Pond.

When you relate his arguments to growing a business, it makes sense to start thinking smaller instead:

1. Less competitive markets make it easier to stand out.
Gladwell’s research indicates that a student’s chances of earning a STEM degree go down by two percentage points for every 10-point increase in a university’s average SAT score. In other words, the better the school, the more difficult it becomes to get that math degree due to greater competition.

When we first brainstorm business ideas, the most appealing ones cater to a wide range of people. For instance, starting a coffee shop is appealing because they’re popular and reach a large demographic.

However, a former coffee shop owner I worked with found it hard to generate profits when there were a dozen similar shops down the road. On the other hand, there’s a cozy long-time coffee shop that serves Himalayan coffee and tea. While Himalayan beverages aren’t for everyone, there are few coffee shops that fill that niche. When you brainstorm products and services that are less competitive (but still have demand), you’re more likely to hit untouched markets.

2. Small environments can provide greater growth opportunities.
When Josh Opperman was left with an engagement ring after his fiance broke up with him, he learned the hard way that selling the ring back would yield a much lower offer than how much he had paid for it. So he set up I Do Now I Don’t, a marketplace for people looking to sell and purchase diamond rings and jewelry.

We assume that bigger business ideas provides better opportunities. But in doing so, we lose some of the advantages that a smaller place provides. For example, many people think of setting up sites similar to Craigslist, where a mass of people can buy and sell goods. The only problem is, Craigslist already dominates the market for general goods.

In Opperman’s case, he created a site that, by its nature, would serve a smaller need. His site isn’t the place for used bicycles or textbooks. At the same time, people looking to sell valuable gems are looking for that level of specificity to ensure they only interact with serious buyers. By focusing small, his site grew quickly and gained attention from various news outlets.

3. Being “pretty good” at multiple things and combining them is a good way to stand out.
While it’s great to be a big fish in a big pond, in reality the odds are stacked against you. It’s hard to stand out in a competitive environment simply by being better than the next person.

Instead of aiming to be the best at one thing, find a way to differentiate by being good at a few things. Scott Adams, the creator of the comic Dilbert, refers to this as a “talent stack”. In Adam’s case, he isn’t the best artist in the world, but he managed to layer his artistic skills, writing skills, and business knowledge to create his popular comic.

In order to use a talent stack, think about what qualities are valued in your field of work. Then, take it a step further and brainstorm unexpected qualities that can help differentiate you from the crowd. Let’s say you offer fitness coaching. While dedication, patience, and knowledge about nutrition are valuable, you can take it a step further by applying psychology to motivating your clients. Layer on coding and design skills, and you can design online fitness tools that help people fix their largest fitness pains.

Starting and growing any type of business means you’ll face tough competition. But if you can filter them out, whether by differentiating your offer or choosing a niche with fewer competitors, you’ll find your business growing in ways you hadn’t considered.