Last night's NCAA basketball championship was a classic sports event. It had all the necessary ingredients. A big stage. A real-life match up of David vs. Goliath. A sports powerhouse against an up & coming private school. It was the film hoosiers come to life (minus the fact the underdog lost on the final shot).

While I was rooting for Duke, having been born and raised in North Carolina during the 1990's, almost everyone else was rooting for Butler. The reason is simple. Butler was the underdog, and humans have an innate love of the underdog.

Psychologists call it the underdog effect. They refer to is as the activation of the underdog schema. This occurs whenever we see a disadvantaged opponent. We root for the gazelle when it's chased by lions. Put simply, we root for anyone attempting to accomplish a difficult task in the face of low odds.

But why do humans have an underdog schema? The answer is two-fold. The first reason is: we strive to be unique, and who we root for sends a signal to the rest of the world. If the obvious choice is Duke, then it's best to root for Butler. After all, there's nothing really at stake in fandom. So the need to be different makes us more likely to root against the "popular" choice.

The second reason is that humans are naturally empathetic. It's a capability that allows us to live effectively as a social animal. Compassion is hard-wired into humanity. And empathy allows us to put ourselves in the shoes of the underdog. We identify with them, and seek to translate their accomplishments to our own. If David can beat Goliath, than I too can overcome impossible odds.

But, the underdog effect isn't limited to sports. We root for companies just like we root for teams. Apple, Dyson, Method, Virgin Airlines, Mini, etc. These brands are effective because they position themselves as challengers, not leaders. Choosing a product from one of these companies tells the world that you're not like everyone else (despite the fact 300,000 other people have the exact same iPad).

While people love underdogs, they never choose them in the face of their own self-interest. You never take a mortgage out with a struggling bank, and you never buy a house in a half-built community.

So how do the successful underdogs do it? They succeed because they create products that are superior when viewed through their particular worldview. Is Method's hand soap better than Dial? It's more expensive, but you probably wouldn't consider it better unless you have the same worldview as they do (sustainability=good & chemicals=bad).

Underdog companies don't compete on features. They compete by aligning with your worldview and creating products that fit your personal definition of a better product.