It's 1994. You're the CEO of American Express.
Visa and Mastercard are eating your lunch. Every bank in America is issuing their cards. Your merchants are revolting over your 3.5% fees (double the competition). You’re also the only card company charging Annual Fees. Wall Street analysts are literally asking if you should exit the credit card business entirely.
Your CFO just walked in: "We're hemorrhaging market share. Cut fees or we're dead in 5 years."
Welcome to the CEO decision that separates $100M companies from $1B empires.
Most founders would've folded.
Cut fees. Strip benefits. Join the race to the bottom. Become another commodity in a sea of plastic.
That's exactly what 97% of CEOs do when competition shows up.
They panic. They discount. They die.
AmEx did something different.
They looked at their data and discovered an uncomfortable truth:
Their best customers didn't give a shit about the annual fee.
They cared about status. Access. Identity. Being part of something exclusive.
So while Visa and Mastercard fought over who could charge less...
AmEx asked: How can we charge MORE?
The board thought they were insane. The analysts called them delusional. The competition laughed.
Then AmEx built what nobody could copy:
• Centurion Lounges that made first class look basic
• Concierge service that could get you into sold-out shows
• Points that actually meant something
A card that clinked when it dropped on the table.
Result?
While competitors raced to zero, AmEx grew profits 15% annually for the next decade.
Merchants WANTED to accept higher fees (because AmEx customers spent 3x more)
Their "dying" credit card business? Now worth $150B .
The lesson I learned scaling AppSumo from $3M to $80M:
When competition enters your space, you have two choices:
1. Join the race to the bottom (and slowly die)
2. Build something they can't copy even if they tried
At $3M, we panicked every time a competitor showed up.
At $80M, we laughed.
Because competition entering your market isn't a threat.
It's proof you're sitting on something valuable.
The uncomfortable truth most CEOs never learn:
Your job isn't to be cheaper than the competition.
It's to be so different that price becomes irrelevant.
Don't retreat when pressure hits.
Don't dilute what makes you great.
Don't play their game.
Build the moat. Own the mountain.
Because identity beats commodity.
Every. Single. Time.
See you at $100M 🤝