Why Product Focused Start-ups are Non-Competitive

Why Focusing on the Product is Non-Competitive for Businesses

November 23, 2011

A company comes up with a new product. It’s much more likely the newness is created by an innovation, a combination of existing things that no one ever thought of mixing together, or an evolutionary product, rather than a true never-been-seen-before invention or revolutionary product.

But what happens when this product becomes popular … the starting gun fires and the feature race is off and running.

Here’s how the feature race goes. It’s a popular product, and everyone races to create a competing version. One supplier puts a new feature into their version. If the feature is successful, customers are pulled to their product and away from their competitors’. Then, competitors copy the feature and add it to their products. The result is every product consolidates down to a common set of bells and whistles, so much alike that it’s hard for customers to distinguish them apart.

Just think about all the types of cars available to customers. Every car has much the same set of features. Why buy one over another?

Yet, some companies continue to do better than others. Their advantage isn’t the product itself; it’s those intangible aspects of the supplier. It’s easy to replicate features, but it’s difficult to reproduce the warm, fuzzy feeling people get from a product or service. It’s these non-obvious and indirect aspects that are difficult to compete against. Customers will always buy what’s most familiar to them or from a company they trust, even if their product is technically inferior to another.

Product differentiation isn’t just about the product itself.