I am not an expert at interpretation but I think he meant the following:
Doing better then others is what bring traction but not always, especially when the market is crowded.
Sometimes it just doesn't work, coz there are numerous out there doing the same thing - trying to do it better. Only if you do it the best you get the traction. Even then its a transient state, there might be someone who will do it better then you, tomorrow.
So in these situations an interesting and better bet could be to break the status quo of the market, make a few new rules and stick to them.
They might seem like friction at the onset but if they are really making things simpler and delivering more value it can result in a lot of traction.
Edit:
I think I would like to agree more to Alex3917's interpretation. Mine seems a bit amateurish approach compared to his. Point taken.
He's saying that it's difficult to think creatively without any constraints, but it's also difficult to actually create something when there are too many constraints. So the ideal strategy for the entrepreneur is to find an area with the optimal amount of constraints, and then keep working on that problem until you ship. (That is, you need to avoid jumping to a new problem when the first problem gets difficult.)
I'll agree it's a little esoteric, but it's a pretty good recipe for shipping something innovative.
