Today’s competition—competition that’s so pervasive we can’t even see it—doesn’t come from direct or even indirect competitors. It comes from the extreme clutter of the marketplace. There are five forms of clutter: (1) product clutter which is too many products and services, (2) feature clutter which is too many features in each product, (3) advertising clutter which is too many media messages, (4) message clutter which is too many elements per message, and (5) media clutter which is too many competing channels.

So how does the human mind deal with clutter? Simple—by blocking most of it out. Stuff that does manage to get in, those items that seem most interesting and useful, are labeled and stored in little mental boxes. Once a label goes on and a box is filled, the mind resists making changes to it. This simple fact has a profound effect on how businesses now compete.

To sustain success, companies have always needed to build barriers to competition. The barriers to competition have moved from the physical to the intellectual, and from within the company’s control to outside of it. Let me explain.

At the beginning of the industrial revolution ownership of the means of production was the favored barrier. If a company had a knitting machine and its competitors didn’t, the company with the machine usually won.

When most companies had machines, the barrier to competition became the factory. If a company could afford to own and manage a large factory with conveyor-belt efficiencies and trained employees, the company with the factory won.

Later, when many companies had factories, access to capital became the barrier to competition. If a company could raise capital by putting its factory up as collateral or selling shares, the company with capital won. As the economy began to shift from manufacturing to information, the barrier moved from monetary capital to intellectual capital. If a company had copyrights and patents to keep competitors from reproducing its products and processes, the company with patents won.

Today, there are cracks in the intellectual capital barrier. As companies leapfrog each other in a constant race to innovate, yesterday’s patents are losing their value. Not only that, using intellectual property as a barrier can sometimes hurt companies rather than help them, since it can slow the growth of the business ecosystem s that allow them to thrive. An example of this is Apple Computer’s early decision to keep its operating platform closely held while Microsoft’s standard platform swept the field.

Now, the battlefield is moving again. While intellectual property, access to capital, and manufacturing efficiencies are still important, the newest barrier to competition are the mental walls that customers build to keep out clutter. For the first time in history, customers, not companies, control the most powerful barriers to competition. The boundaries of brands are determined by those little boxes they erect in their minds.