Episteme

Mike's random thoughts and ramblings

Differentiation

I love Mike Rothman's blog - it's one of the few security blogs that I'm a religious reader of, especially because of the Daily Incite, which points me to all sorts of other stories. He commented today about the competitive differentiation article that I referenced here, saying:

Even if you have differentiation, it's gone in a product cycle. Maybe a year or 18 months tops. And there have never really been any long lasting brands built in technology to elicit loyalty like Coke. The lack of differentiation breeds a distinct lack of loyalty which makes competing in tech-land pretty brutal every day. I do agree with Michael's summary, success in technology is all about differentiation. I just am skeptical that any company can innovate consistently enough for long enough to really provide a "durable advantage."

I think that, in many ways, he missed the main point of the model presented by The Discipline of Market Leaders: there are three main ways to provide differentiation, and product/technical vision is only one of them.

The point is that you don't have to be a constant innovator. In that way, Mike's right - it's really hard to stay on top of innovation for a long, long time. Sony is one of the few who have really done it, and even they have certainly met with mixed results.

The key is to shift models when the "innovation" model no longer suffices - if you've read Crossing the Chasm, you'll recognize this exact shift. It's nearly impossible to survive in technology as a permanent innovator - at some point, you have to choose the road of customer intimacy or operational excellence as a survival model.

The biggest problem in technology is that far too many try to hang on to their "innovator" status for too long, without trying to reach out to their customers (and understand their real needs) or go from spending money on new ideas like a drunken sailor to moving their operation to one with lean discipline to produce products of absolutely the highest quality.

And even fewer companies have the clarity of vision to realize that you can't focus on all three at the same time. To modify an old software engineering cliche:

"Quality/Efficiency, Customer needs, and Innovative New Ideas: Pick one."

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Michael Murray

Michael Murray