Who would you like your competition to be? Competing against the best will make you stronger, but competing against the weak is easier.

The past NFL season proves this point. The National Football League calculates a statistic called "strength of schedule," which gauges the relative strength of a team's opponents based on their total won-lost records. A score of .500 indicates a perfectly average schedule; a score above .500 indicates a more difficult schedule relative to the league average; a score below .500 indicates a relatively lower quality of opponents.

The NFL works hard at "parity" in matching opponents before each season, attempting to give losing teams (and their fans) a better chance at success by scheduling the best teams of the previous year against somewhat tougher opponents. Yet a review of the season's results does not suggest that the best teams had tougher schedules, and the worst teams easier ones. The 2006 season shows the opposite trend, with remarkable consistency.

Of the 10 best records in the league, nine had somewhat easier schedules than average, with the exception of the Super Bowl champion Indianapolis Colts, whose strength of schedule exactly matched the league average. Of the 10 worst records in the league, eight had somewhat tougher schedules than the average.

How does this concept apply in business? Companies, of course, have more latitude in whom they compete against than do professional sports teams.

On the one hand, a market with no quality competitors is likely an unprofitable niche. Although companies pay lip service to competition, they strive for competitive advantage over other companies in their industry, and barriers to those considering entering their market.

The concept that you don't get points for "degree of difficulty," but only for winning, is a familiar one to poker players, who consider "game selection" a critical skill. Choosing to consistently compete with players who are better than you will result in their taking your money. As poker legend Doyle Brunson once said, "What's the point of being the seventh-best poker player in the world when you're sitting down against the top six?"

Great military leaders understand the power of "hitting them where they ain't," attacking the enemy where they are weakest, rather than challenging their strongest forces. In the Civil War, Stonewall Jackson and William Tecumseh Sherman, masters of indirection, were more successful in battle and more sparing of their soldiers' lives than were Robert E. Lee and Ulysses S. Grant, their more-famous commanders who preferred the direct attack.

Sometimes in business, talented people underachieve because their intellectual curiosity or ego leads them to compete in industries that are less profitable than more-mundane but more-lucrative ones.

For those who consider mundane industries "beneath them," the joke is on them. Success, after all, is the ultimate in prestige. Was overnight delivery of great consequence before Fred Smith founded Federal Express? Was payroll processing a "high-status" industry before Frank Lautenberg turned ADP into a billion-dollar company?

Here are my four rules for choosing your competitive niche:

1. Test yourself against the best. Make your money against the rest: Going up against the best makes you stronger, but if your competition is consistently superior, you will likely exhaust yourself and lose the battle.

2. David will sometimes beat Goliath: Underdogs win in business much more often than in the NFL. Small companies can sometimes successfully use "competitive judo," leveraging speed and innovation to gain market share.

3. Working with the strong is easier than competing against them: Working with great people is essential to growth; competing against great people is a challenge to be avoided when possible. The temptation to build monopolies is often driven by the desire to work with the best competitors rather than against them.

4. Stay hungry: Whether you are a nimble new competitor, a niche provider or a market-dominating 800-pound gorilla, remaining aggressive and nimble is the best way to ensure continued success. Big companies such as General Electric and Intel have built their corporate culture around being agile giants who do not take their success for granted.

And remember another old poker maxim: "If you look around the table and you can't spot the sucker, it's you."