The railroads thought they were in the business of running railroads, which kept them from seeing bigger threats and opportunities. In reality, they were in the business of transportation, and it was air travel that posed the biggest threat—not faster or better railroads.
This misguided view of one's true competition is still prevalent today. For example, health care at times suffers from a similar myopic viewpoint. Health care professionals see themselves as being in the business of saving lives and promoting health. But in fact, at times they are unable to fully promise either. Perhaps it is closer to the truth to say that they are in the business of restoring dignity and instilling hope—as well as offering medical interventions. Imagine how this idea might transform how hospitals deliver care.
Whatever your industry, think hard about what you are really selling. It may lead you to the next big idea—while failing to do so may prevent you from seeing your true competitive threats.