Hidden Champions of the Twenty-First Century

Simon identifies and studies companies that are world market leaders in narrow product categories and are almost unknown to the public. His criteria are being first, second or third in the world market or first on the home continent, revenue below a threshold he sets at around four billion dollars, and low public recognition. He counts more than a thousand such firms, with a heavy concentration in Germany, Austria and Switzerland.

The findings come from his own survey database and company visits over two decades. The pattern he reports is consistent: extreme market definition, meaning the firm defines its market narrowly enough to dominate it; depth in-house rather than outsourcing, because the manufacturing process is itself the competitive advantage; close and direct customer relationships with the firm's own sales people rather than distributors; early and committed internationalisation, since a narrow product needs the whole world as its market; high research intensity directed at incremental product improvement rather than at breakthroughs; long chief executive tenure, often family ownership and multi-decade time horizons; and low employee turnover with deep specialist skill.

For founders and investors this is the most useful available description of a business model that receives almost no attention: profitable global niche dominance without scale, brand or venture capital. The evidence is Simon's own dataset, which is not independently verifiable, and the sample is selected on success, so there is no way to know how many similar firms failed. The concentration in German-speaking countries is explained partly through cultural and institutional arguments that are more assertion than analysis. The 2009 edition has been updated since.