Very often engineering types can only think of differentiation in technical terms. I think I can say that, in practice, at least in mature markets, differentiation is more about positioning and marketing rather than almost anything else. Easy examples:
- Cars
- Bottled water
- Computer monitors
The vast majority of automobiles produced today have reached a level of design and manufacturing maturity that makes them pretty much equally reliable and equivalent. The days of a Porsche or BMW being markedly better than a Toyota or Nissan are gone. Sure, we can point at the extremes and find differences, but I am not talking about that, I am focusing on what the vast majority of consumers look for or need in a car. Today you could pick any vehicle almost blindly and not make a purchasing mistake. That was not the case a few decades ago.
How do they differentiate and sell you cars then? Branding, positioning, marketing. They sell the feeling of owning the car rather than any true technical differentiation, because those really don't matter as much in non-technical markets.
Bottle water is another case. I'll generalize and say that most bottled water is pretty much the same. Or, let's put it another way, no bottled water has magical properties that make it significantly better than the others.
Again, marketing. They are selling you an image. In some cases it's a glass bottle with a different feel or a social mission. The product, however, that thing you drink, most of which you are going to urinate, is basically the same. If you position the product well you can command much higher pricing than the competition.
Computer monitors fall under the same category. Nobody cares any more outside of those using them for very specific applications. There are only a few companies who make LCD panels. Every single computer monitor buys from them. So, if you buy a 24 inch HP vs a Dell monitor they very likely have exactly the same LG or Samsung panel inside. They might even share the rest of the electronics. For most computer users these products are perfectly interchangeable; they just don't care because it makes no difference at all.
Not sure how computer monitor makers differentiate their offerings any more to the masses. Sure, there are folks who are more comfortable with one brand over the other (despite the fact that it might actually be exactly the same product inside) and, of course, there's pricing. This is one example of the fact that significant differentiation might not always be an absolute necessity in order to have a successful billion dollar business.
One area where they do differentiate --although consumers never see it-- would be in the terms and relationship they have with distributors and retailers. This is a big money play. For example, HP could drop two million dollars of inventory into Best Buy warehouses, effectively on consignment, and get paid based on what is sold. Best Buy, will, of course, push those products because they represent pure profit without any capital investment to speak of. This is a distribution chain differentiation that drives sales rather than differentiation to drive consumer behavior.
Books have been written about this topic. I've read a few of them over the years. Still much to learn.
Absolutely agreed, but I think part of what distorts this perspective for tech products is often the influence of VC. If you need to convince investors that you’re lined up for explosive growth, something like “we’re Tinder with branding that captures a different market segment” is probably a less compelling story than “we’re Tinder with an AI gimmick that will crush our competitors, burn their villages, and salt their fields”.
Also, totally unrelated tangent, but I hate the way internet discussion makes us go to absurd lengths to qualify statements as a preemptive defense against pedants. Like, for the purposes of this discussion you’re 100% right that all bottled water is functionally identical, but you still have to couch it in “I’ll generalize” and “most” and “pretty much”. I do it all the time too and it drives me nuts.
I think the marketing differentiation works best when it is driven by factors that are hard to measure and control, but that are perceived as high value, like flavour and style. When buying bottled water, the water is free, you're buying the bottle, the refrigeration, then real-estate & inventory space, and you can compare it on those dimensions, but if you are sensitive to the taste that can override the other factors. With cola it is much much stronger because the taste is more intense and your body is conditioned to link it to the sugar and caffeine hitting the bloodstream which gives you that immediate Pavlovian response. But taking something low-cost and using human psychology to assign a high value is how marketing makes profit. As opposed to the prosaic side of marketing where you're just letting people know you exist.
> Today you could pick any vehicle almost blindly and not make a purchasing mistake.
Wrong. Cost of ownership varies wildly across brands, and reliability is still not a given.
Beyond the purchase price, which often sucks people into making poor buying decisions, fuel economy, parts and servicing, complexity, durability, tax, and depreciation all make a huge difference to cost of ownership.
Finance deals are structured to make cars seem affordable, but that's only a part of the TCO.
If you're unwary, it's very easy to overstretch yourself and buy a car that ends up owning you (new or used).
Eh, all cars meet minimum safety standards and will get you to and from wherever you want to go, but they aren't equivalent. Just like I could probably go to the supermarket and buy any random item from the butchery department and cook it and it would stop me from being hungry for the night but I definitely wouldn't say that food items from the butchery department only differ in "branding, positioning, marketing" though. Likewise those are not the only things that matter in the car market.
Imo, engineering types usually think about technical differentiation because they can potentially be good in it. Usually marketing/branding is very expensive and not very accessible for the average bright founder+engineer type.
While I agree wholeheartedly with your core point, it's worth noting that (for example) not all car manufacturers make 4WD/AWD vehicles. Even fewer make all-electric vehicles. Even fewer make vehicles that are both 4WD/AWD and all-electric. So there's at least some degree of technical differentiation there.
You can do the apple thing, but imo that's more than just marketing abs branding. To be a startup though (work radical growth) it's likely you'll be able to do and sustain that only with marketing and branding as a differentiator. Imo.
One category that's missing on the left is "Parents." There's Tinder for parents (Peanut), Birchbox for parents (multiple subscription boxes). It would be interesting to think about what Uber or AirBnB for parents would be.
I couldn't read the article though because I got that absurd uncloseable newsletter subscription screen. That was one of the most user-hostile things I've seen on a website lately.
So Tinder for parents is a terrible idea. (Full disclosure: my wife's a Peanut member. She's been meaning to uninstall it for a while.) Think about the key observations that made Tinder take over the dating space: people are basically superficial and judge who to go out with based on looks alone; people have spare time to flip through photos; people want to be casual and not invest too much in a date before getting to know them. These are the exact opposite qualities that you want in a mom-friend. When you're a new mom you're probably not looking your best, and putting up a profile picture isn't high on your list of things to do. You don't give a shit what your mom friends look like, and once you're reading through text it's more like "Facebook for moms". You have very little free time to swipe through profiles, and when you do, you want your mom-friend-relationships to count.
There's a lesson there for people who want to phrase their startup idea as "X for Y". You should ask how similar Y is to the userbase that originally made X popular, and whether you are capturing the qualities they have in common or just randomly cargo-culting a successful product. "Flickr for video" works because a photo-viewing community and video-viewing community are substantially similar: they both have similar casual interactions around shared multimedia, and they both benefit heavily from recommendations, discovery mechanisms, and social sharing. Similarly, "Google for China" works because people in China have information needs too yet actual Google has an antagonistic relationship with the CCP. "Uber for laundry" and "Uber for housecleaning" are both terrible ideas because Uber's value proposition is that you can get transportation on-demand and it can be done by unskilled people as long as they get you safely to your final destination, while both housecleaning and laundry are stuff you do once a week, on a planned basis, and you really want to trust the people who are doing it. "Uber for grocery delivery" (Instacart/UberEats/DoorDash/Postmates) is a decent idea, though, because grocery delivery is also something you want on-demand, do regularly, and can be done by basically anyone.
Do I have any of these "realms" wrong? It seems the best startup idea would be one that adds a new "realm" rather than rinses and repeats for another direct object.
Uber for = simplify a process that involves transporting or delivering something somewhere
Tinder for = rate/advertise/connect some product nearby
Birchbox for = periodically refill a perishable or consumable
Airbnb for = locate and book some experience or resource
I think you are trying to define a taxonomy of such services based on the nominal/advertised proposition to end consumers.
I'm not sure that's the right way to quantify the startups themselves, as the business case is sometimes only tangentially related to said proposition.
Uber for X can also mean “connect the user with independent contractors, or at least people we insist are independent contractors so we can pay less taxes and push the costs for things like insurance, consumables, and equipment maintenance onto them”.
I mean the way you make oodles money is taking market share (Uber) or creating new markets (AWS). Both are valid strategies - either take someone else’s customers or create a new way for people to spend money.
this. While it's an interesting article and thought experiment, I don't think anyone should be discouraged from trying to build the next ride-hailing, dating, or couch-surfing platform simply because others have already found success in it. Competition makes the world spin, and in the grand scheme of things, we're only just beginning.
Reading the article and trying to think of different startup ideas. Gets a non-closable (AFAIK) modal that covers the whole screen force you to go back. Maybe a startup idea that helps entrepreneurs grow without adapting to bad UX behaviour is a great idea that needs attention
"Airbnb for Gamers" according to the infographic isn't taken. Any potential there? Letting people rent out their physical gaming rigs to other people in the area, in their homes. Seems like it'd be pretty easy to set up.
I could see it be kind of like gaming cafe's in Asia, except you'd be renting a rig in somebody's actual home. I don't know if there'd be any market for this, but it seems like it wouldn't take to much to whip up and to a trial run in a city.
I started scrolling around, and then an unclosable "subscribe to my newsletter" blocked the entire page.
WTF???
No, I don't want to subscribe to your newsletter. Furthermore, forcing me to subscribe to your newsletter just to read a silly post on your website is a jerk move.
I had an idea kind of similar to that. Call it Herb Grind(e)r. I don't use weed myself, and I'm married, so I don't know how much need there is.
I actually think something more like Meetup for weed users would be kind of cool, though. Find fun activities to do with herb friendly people.(Disc golf, anyone?)
It would be neat to see a more in-depth analysis on the success of these X for Y startups vs non.
A big reason for X for Y, besides simplicity of explanation is...
X is usually a novel NEW process -- or way of doing things -- that either became only recently possible , or was recently demonstrated as successful.
Suddenly it becomes clear that this NOVEL new process can be applied in other areas.
Uber and AirBnB opened up efficient sharing of expensive resources that were underutilized prior.
Now, the natural next step is:
"What other expensive resources are underutilized?"
Boats?
Commercial retail or wharehouse space?
Tractors and heavy equipment?
So, in the early stages of rolling out a newly realized novel process, it seems impossible that the process should not expand to a number of similar problems.
Until the low hanging fruit is all gathered.
Uber for Y, for example, seems to be only in its VERY EARLY stages.
No doubt there are MANY Y's out there to roll out the Uber model to.
I am always questioning why startup idea have to be unique ?
Let's say you sell "books" we all know who's biggest.. but they idea was not definitely not unique.
My opinion service quality for customer matters more than uniqueness..
I think the reason this sort of thinking works is that it's an effective way to perform exhaustive search in idea space where metrics may be hard to define, based on combinatorics. A very early example of such an approach was Ramon Llull's Ars Magna (https://en.wikipedia.org/wiki/Ramon_Llull#Llull's_Art_(Ars_M...).
Airbnb for bathrooms, you can use it to allow desperate strangers to pay you to use your toilet. Preferably while you're not home.
We'll call it Airpnp.
[+] [-] robomartin|6 years ago|reply
How do they differentiate and sell you cars then? Branding, positioning, marketing. They sell the feeling of owning the car rather than any true technical differentiation, because those really don't matter as much in non-technical markets.
Bottle water is another case. I'll generalize and say that most bottled water is pretty much the same. Or, let's put it another way, no bottled water has magical properties that make it significantly better than the others.
Again, marketing. They are selling you an image. In some cases it's a glass bottle with a different feel or a social mission. The product, however, that thing you drink, most of which you are going to urinate, is basically the same. If you position the product well you can command much higher pricing than the competition.
Computer monitors fall under the same category. Nobody cares any more outside of those using them for very specific applications. There are only a few companies who make LCD panels. Every single computer monitor buys from them. So, if you buy a 24 inch HP vs a Dell monitor they very likely have exactly the same LG or Samsung panel inside. They might even share the rest of the electronics. For most computer users these products are perfectly interchangeable; they just don't care because it makes no difference at all.
Not sure how computer monitor makers differentiate their offerings any more to the masses. Sure, there are folks who are more comfortable with one brand over the other (despite the fact that it might actually be exactly the same product inside) and, of course, there's pricing. This is one example of the fact that significant differentiation might not always be an absolute necessity in order to have a successful billion dollar business.
One area where they do differentiate --although consumers never see it-- would be in the terms and relationship they have with distributors and retailers. This is a big money play. For example, HP could drop two million dollars of inventory into Best Buy warehouses, effectively on consignment, and get paid based on what is sold. Best Buy, will, of course, push those products because they represent pure profit without any capital investment to speak of. This is a distribution chain differentiation that drives sales rather than differentiation to drive consumer behavior.
Books have been written about this topic. I've read a few of them over the years. Still much to learn.
[+] [-] smogcutter|6 years ago|reply
Also, totally unrelated tangent, but I hate the way internet discussion makes us go to absurd lengths to qualify statements as a preemptive defense against pedants. Like, for the purposes of this discussion you’re 100% right that all bottled water is functionally identical, but you still have to couch it in “I’ll generalize” and “most” and “pretty much”. I do it all the time too and it drives me nuts.
[+] [-] PowerfulWizard|6 years ago|reply
[+] [-] bartread|6 years ago|reply
Wrong. Cost of ownership varies wildly across brands, and reliability is still not a given.
Beyond the purchase price, which often sucks people into making poor buying decisions, fuel economy, parts and servicing, complexity, durability, tax, and depreciation all make a huge difference to cost of ownership.
Finance deals are structured to make cars seem affordable, but that's only a part of the TCO.
If you're unwary, it's very easy to overstretch yourself and buy a car that ends up owning you (new or used).
[+] [-] p1necone|6 years ago|reply
[+] [-] MuffinFlavored|6 years ago|reply
If I'm in the market for a BMW M3, it is because it is a stellar performance car. A Toyota Camry does not fill those roles.
[+] [-] im3w1l|6 years ago|reply
I'm far from an enthusiast, but even for me there are cars on the market with engines so weak that I don't like it.
Apart from the engine, there are some nice technological features on modern cars, like parking cameras or even automatic parking.
Then there are hybrid and electrical cars.
> Bottle water
Do you include sparkling water in that? Because they can taste very different.
> Computer monitor
Size. Resolution. Refresh rate. G-sync. Reflective vs matte.
[+] [-] winrid|6 years ago|reply
Reliability wise? Sure they are not far off.
[+] [-] alde|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] PeterStuer|6 years ago|reply
You'd have to be legally blind not to notice the quality difference between my 200$ Philips screen and my 500$ Dell screen.
[+] [-] ijidak|6 years ago|reply
> Again, marketing. They are selling you an image.
A great example of this is Fiji water.
"Earth's finest water"
It plays on the allure that a product that comes from a "distant land" must be better than local water.
But few will ever ask for research to prove it's better.
I can't believe we are paying for water to be shipped thousands of miles, that likely has minimal benefit beyond what can be sourced locally.
But, that's the power of perception at work.
[+] [-] yellowapple|6 years ago|reply
[+] [-] cjblomqvist|6 years ago|reply
[+] [-] vba|6 years ago|reply
[+] [-] snegu|6 years ago|reply
I couldn't read the article though because I got that absurd uncloseable newsletter subscription screen. That was one of the most user-hostile things I've seen on a website lately.
[+] [-] nostrademons|6 years ago|reply
There's a lesson there for people who want to phrase their startup idea as "X for Y". You should ask how similar Y is to the userbase that originally made X popular, and whether you are capturing the qualities they have in common or just randomly cargo-culting a successful product. "Flickr for video" works because a photo-viewing community and video-viewing community are substantially similar: they both have similar casual interactions around shared multimedia, and they both benefit heavily from recommendations, discovery mechanisms, and social sharing. Similarly, "Google for China" works because people in China have information needs too yet actual Google has an antagonistic relationship with the CCP. "Uber for laundry" and "Uber for housecleaning" are both terrible ideas because Uber's value proposition is that you can get transportation on-demand and it can be done by unskilled people as long as they get you safely to your final destination, while both housecleaning and laundry are stuff you do once a week, on a planned basis, and you really want to trust the people who are doing it. "Uber for grocery delivery" (Instacart/UberEats/DoorDash/Postmates) is a decent idea, though, because grocery delivery is also something you want on-demand, do regularly, and can be done by basically anyone.
[+] [-] shaftway|6 years ago|reply
[+] [-] frandroid|6 years ago|reply
[+] [-] symplee|6 years ago|reply
[+] [-] cabaalis|6 years ago|reply
Uber for = simplify a process that involves transporting or delivering something somewhere
Tinder for = rate/advertise/connect some product nearby
Birchbox for = periodically refill a perishable or consumable
Airbnb for = locate and book some experience or resource
[+] [-] ska|6 years ago|reply
I'm not sure that's the right way to quantify the startups themselves, as the business case is sometimes only tangentially related to said proposition.
[+] [-] mr__y|6 years ago|reply
[+] [-] egypturnash|6 years ago|reply
[+] [-] unlinked_dll|6 years ago|reply
[+] [-] noonespecial|6 years ago|reply
Ideas are executed not "owned". The proof is in the doing.
[+] [-] holler|6 years ago|reply
[+] [-] hising|6 years ago|reply
[+] [-] superqd|6 years ago|reply
[+] [-] alex-wallish|6 years ago|reply
I could see it be kind of like gaming cafe's in Asia, except you'd be renting a rig in somebody's actual home. I don't know if there'd be any market for this, but it seems like it wouldn't take to much to whip up and to a trial run in a city.
[+] [-] gwbas1c|6 years ago|reply
WTF???
No, I don't want to subscribe to your newsletter. Furthermore, forcing me to subscribe to your newsletter just to read a silly post on your website is a jerk move.
[+] [-] tjalfi|6 years ago|reply
[+] [-] tonynguyen1|6 years ago|reply
[+] [-] bananatron|6 years ago|reply
[+] [-] lancewiggs|6 years ago|reply
Start with an end user need.
[+] [-] treblig|6 years ago|reply
:)
[+] [-] paultopia|6 years ago|reply
[+] [-] mordechai9000|6 years ago|reply
I actually think something more like Meetup for weed users would be kind of cool, though. Find fun activities to do with herb friendly people.(Disc golf, anyone?)
[+] [-] theandrewbailey|6 years ago|reply
[+] [-] cbanek|6 years ago|reply
[+] [-] luizb|6 years ago|reply
[+] [-] ijidak|6 years ago|reply
A big reason for X for Y, besides simplicity of explanation is...
X is usually a novel NEW process -- or way of doing things -- that either became only recently possible , or was recently demonstrated as successful.
Suddenly it becomes clear that this NOVEL new process can be applied in other areas.
Uber and AirBnB opened up efficient sharing of expensive resources that were underutilized prior.
Now, the natural next step is:
"What other expensive resources are underutilized?"
Boats? Commercial retail or wharehouse space? Tractors and heavy equipment?
So, in the early stages of rolling out a newly realized novel process, it seems impossible that the process should not expand to a number of similar problems.
Until the low hanging fruit is all gathered.
Uber for Y, for example, seems to be only in its VERY EARLY stages.
No doubt there are MANY Y's out there to roll out the Uber model to.
[+] [-] neonate|6 years ago|reply
[+] [-] sk84life|6 years ago|reply
My opinion service quality for customer matters more than uniqueness..
[+] [-] Jun8|6 years ago|reply
[+] [-] mokarma|6 years ago|reply