In this clip from the Rule Breaker Investing podcast, David Gardner explains the difference between companies that are unremarkable in their sector and companies that stand out and succeed. The businesses that win take on the relevant, real-world problems of their industry and make measurable progress toward solving them.

Make sure to check out the other parts of this series:

Businesses That Win Trait #1: Create Value for All Stakeholders

Businesses That Win Trait #2: Solve Real Problems

Businesses That Win Trait #3: Long-Term Thinking

Businesses That Win Trait #4: Not Afraid to Adapt

Businesses That Win Trait #5: Be Fun!

A full transcript follows the video.

This podcast was recorded on Oct. 21, 2015.

David Gardner: Alright, number two. Number two, companies that solve real problems.

When I first started investing, this is not how I was thinking. Early on, at the age of 18, 19, 20, when I was picking my first stocks and buying them for real, I was looking for the fourth or fifth player in a niche industry. Usually, I was hoping that that stock was off Wall Street's radar, and that within 18 months or so, I was hoping maybe it could double. And it worked a few times, but it didn't work well enough long enough that I kept that up. I changed my investment approach, something I've done a number of times over the last 30 years. Perhaps you have, too. Perhaps Rule Breaker Investing is helping you shape or change your existing investment approach.

What I found by following that strategy was, I was investing in companies that were not meaningful players nationally, let alone globally. I was finding off-the-radar companies, usually without interesting or visionary managers, who were doing something unremarkable as the third or fourth player. And I was just hoping that stock was undervalued. Again, it worked some, but it didn't work enough.

By contrast, let's think about companies that solve real problems. Let's talk about, for example, Apple. There's a company that really has solved the problem of making technology accessible to all, making the most important technology of our time. A couple decades ago, it was personal computers. Today, it's more like our phones. Those and more. Apple has consistently solved our problems, and at an incredible scale. Hence Apple's valued as the single highest market cap American company today, the most valuable market capitalization out there.

I think Chipotle is another good example, a company that's solving real world problems. Better fast food. Fast food that's not just better for you, but is also better produced. And what Chipotle has done to rework where it sources things is very profound, and now, much imitated by others.

There's a nice local restaurant chain here in Washington, D.C. called Cava Mezze Grill. Really love Cava a lot. They just announced their first non-Washington, D.C. restaurant opening in Los Angeles. If you're a Motley Fool member out in Los Angeles, keep an eye out for Cava Mezze Grill. Why am I giving them a plug? Well, it's not really a plug, although I am a big Cava fan. I'm just here to say that they have clearly been highly influenced by Chipotle. One of the first things I thought about when I walked into that restaurant, and I bet you have a few that you go to from time to time too, was, wow, they're copying Chipotle.

But, real problems, real world problems. Another great example -- I probably overuse this company as an example -- but I think Netflix clearly helped a lot of us solve the problem of late fees back in the day, 10 plus years ago; and today finding really good quality content streaming online. Again, big impact, big companies. The businesses that win are the companies that solve real world problems at scale. They're companies that you can't not notice, even if you don't want to buy from them, because they're solving and not of other people's problems that they are gaining great value.