Being the best in a field has long been seen as a ticket to outsized rewards. Whether in business, sports, entertainment, or any competitive arena, those at the very top often reap disproportionate financial gains. The premise is simple: people will pay a premium to get the best – be it the top-performing product, the top talent, or the top service. Today, I want to explore why being number one can yield such massive payoffs, with examples spanning industries and a focus on the UK. You may disagree and please do let me know.
The Winner-Take-All Effect: Top Performers Reap the Rewards
In many domains, small differences in talent or performance lead to huge differences in rewards. Economists Robert Frank and Philip Cook dubbed this the “winner-take-all” phenomenon. In winner-take-all markets, being slightly better than the competition can translate into exponentially higher pay or market share. A classic illustration comes from sports: Olympic gold medalists often earn millions in endorsements, while silver medalists – sometimes just fractions of a second slower – receive far less and fade from public attention. The market disproportionately rewards the person on the top podium.
This superstar dynamic is evident across various fields. Consider the following examples of how a small top tier captures a huge share of the income:
- Music Industry: on Spotify, the top 1% of artists receive 77% of all artist revenue. In other words, a tiny elite of musicians garners the majority of streaming income, while the remaining 99% split the leftovers.
- Tech Startups: in venture capital, just 6% of startups deliver about 60% of the returns for investors. A venture fund’s success is usually driven by a few breakout companies – the “unicorns” – while most others barely break even.
Sports Superstars: the highest-paid athletes earn orders of magnitude more than others. In this instance, no discussion of financial upside is complete without mentioning Kylian Mbappé. Widely regarded as one of the world’s top footballers, Mbappé reportedly earns around €600,962 gross per week under his current Real Madrid contract—a staggering €31 million per season. That’s the equivalent of the average UK full-time worker’s earnings over nearly seven centuries! In 2024, Forbes even ranked him among the top-paid athletes worldwide, with $110 million in total earnings from salary and endorsements, placing him sixth globally—alongside legends like Ronaldo and Messi. This is a prime example of how truly exceptional performance—being the best—commands astronomical financial rewards.
- Income Disparity at the Top: The concentration of earnings among top performers is stark. In the UK, the top 0.1% of earners (about 50,000 individuals) each make over £500,000 a year and collectively take home 6% of all UK income, which is 60 times more than their share of the population. Similarly, chief executives and other top professionals often earn vastly more than average workers.
Paying a Premium for Quality: Why People Demand the Best
It’s not just that the best happen to earn more – people actively choose to pay more for top quality. In consumer markets and professional services alike, there’s a willingness to spend extra to get the number one. A recent international survey found that over two-thirds of consumers are willing to pay an average 25% more for their favorite brands. Brand loyalty and the perception of superior quality mean price isn’t the only factor; many customers will stick with the product or service they deem the best even if the cost rises. In fact, nearly 75% of U.S. consumers said they would keep buying their preferred brand even if prices “skyrocket” – unless a competitor demonstrably outshines it. It seems that when people believe something is the best, they value it far above the alternatives.
This premium-for-quality effect is also true in the technology sector. Take Apple as an example: Apple’s iPhone has a relatively modest share of the global smartphone market (around 19% of units sold), yet Apple captures roughly 46% of worldwide smartphone revenues. Thanks to its high prices and coveted brand, Apple also rakes in an outsize portion of the industry’s profits (historically as high as approximately 80% of all smartphone profit) despite selling fewer devices than some competitors. In 2024, Apple’s average selling price per phone was about $903, dwarfing the (approximatively) $299 average for Samsung. Consumers willingly pay a premium for what they perceive as the best user experience and ecosystem. Some would say that the best product commands the best price.
A similar story plays out in professional services and the job market: employers and clients pay top dollar for top talent. In the legal world, take elite law firm Kirkland & Ellis, currently the highest‑grossing law firm globally, as a prime example. In 2024 the firm reported revenue of $8.8 billion, and its profit per equity partner (PEP) reached an astonishing $9.25 million—up 16% from the prior year—and among the highest of any global law firm . That means each equity partner, on average, pockets “nearly $10 million” annually. For context, average FTSE‑100 CEO pay in the UK is about £4.2 million (around $5.3 million), making Kirkland’s equity partners significantly better remunerated than many top executives.
Not all of this is without controversy. The enormous pay gaps raise questions about fairness and sustainability. But from a market standpoint, these gaps persist because, ultimately, excellence is scarce and in demand. People want the winning athlete on their team, the top surgeon for their operation, the most acclaimed consultant for their business, and the premium brand for their purchase. As long as that is true, I believe that those who can convincingly claim the top spot in quality or skill will find plenty of paying customers.
Specialists vs. Generalists: Do We Prize Overspecialization Too Much?
I wonder whether the lucrative returns for being “the best” drives many of us to specialize deeply in one area – to pour time and effort into becoming that top expert. Students are often advised to develop a niche skill set to stand out. Professionals are told to hone their craft in a specific domain to rise to the top. This makes sense given the rewards I’ve outlined above. However, to me, it also raises another concern: do we tend to (over)value overspecialization at the expense of broader talent? In a complex world, we also need generalists – people with a wide range of knowledge who can integrate ideas and adapt to multiple roles, especially in fields such as government.
Interestingly, some research suggests that an overly narrow focus can backfire in careers. A study of MBA graduates found that those who specialized too closely in one field (e.g. only finance experiences) were less likely to get multiple job offers and often received lower starting bonuses – up to $48,000 less – than their more well-rounded peers. Employers apparently valued the candidates who could “wear many hats” and bring diverse experience. The specialists, despite often having stellar credentials in their niche, were seen as easily replaceable and had less bargaining power in this study. In contrast, generalist candidates stood out more and could be redeployed into different roles, making them attractive hires. This insight would appear to align with the ideas of author David Epstein, whose book Range argues that generalists often find creative, long-term success in unpredictable environments by drawing on broad experiences. Do you agree?
None of this is to say that developing expertise is bad – far from it. Many fields absolutely require deep specialists (we all want an experienced specialist surgeon for a critical operation, as one expert noted). The key is balance. There may be a tendency in society to glorify the superstar specialist and overlook the value of the versatile generalist who can connect dots across domains. Both types are needed: the world benefits from the innovator with a T-shaped skill set (deep in one area, but broad across many).
Leave a Reply