<p>Competition for resources has long been viewed as a dominant mechanism for species exclusion in nature. Laboratory phytoplankton competition experiments have clearly demonstrated the principles of resource-based competitive exclusion, yielding the decades-old ‘R* rule’ stating that the species able to maintain steady-state biomass at the lowest resource level (R*) will outcompete all other species and that the number of stably coexisting species will equal the number of different limiting resources. However, the notion of resource-based competitive exclusion is clearly violated by natural phytoplankton assemblages that consistently exhibit coexisting species with vastly different resource acquisition potentials. Here, we explain why natural phytoplankton communities do not obey the ‘R* rule’, why cell-to-cell distancing and predator–prey dynamics prevent resource-based competitive exclusion, and why phytoplankton diversity is theoretically unconstrained within size-specific ecological niches created by predator–prey sets. We conclude this manuscript with an appeal that a more holistic, ecological explanation of competitive exclusion and biodiversity be adopted and taught that nurtures a more thorough understanding and modeling of natural phytoplankton and other microbial communities.</p>