The Limits To Being Different

Product differentiation is often described as the key to business success. Companies are told that unless they really stand out from the crowd, their products or services will become “commoditized” — an undesirable position in the marketplace that results in little or no profit. This has been well-established guideline in the world of technology startups and even new technology-based product development in existing companies.

And that guidance is mostly right. Distinguishing your products from the crowd of competitors often results in greater than average profits. Consider Apple, with less market share than Android, but lots more profit than its smart phone competitors.

Of course, how to go about this is not so simple. One of the best and most inspiring books about how to differentiate — how to be really different — is Harvard Business School Professor Youngme Moon’s book, Different: Escaping the Competitive Herd — Standing Out In A World Where Conformity Reigns But Exceptions Rule.

These quotes summarize her forceful advice:

“What does it mean to be really different? Different in a way that makes a difference. It could mean doing the opposite of what everyone else is doing — going small when everyone else is going big…

“You could even say that breakaway brands revel in our stereotypes, since they make their living turning them upside down…

“These brands are the antithesis of well-behaved, and their mutiny is directed squarely at the category assumptions we bring to the table. And sometimes the transgression is more than a touch provocative; it’s a bit twisted as well. …

“What a breakaway positioning strategy offers is the opportunity to achieve a kind of differentiation that is sustainable over the long term. … it has no competitors; it remains sui generis.”

This advice applies not only to business, but can also apply to politics. That’s why I wrote a post four years ago called “The Breakaway Brand Of 2016” about the 2016 US Presidential election. Although I doubt that he read her book and his approach certainly didn’t please Professor Moon, Trump seemed to have been using it as his playbook for the 2016 election. His was the perfect exemplar of a breakaway brand in politics.

Now the 2020 Election also showed the limits of this approach. In a two-way election in the US, you need a majority (putting aside the Electoral College, for the moment).

 

It is also often the case that being different means you won’t get a majority, as both Apple and Trump have found out. For Apple, that’s not a problem. For Trump, it meant he lost the election.

While he did receive many votes, the limits of breaking too far away in politics was well stated by the most successful politician in American history, Franklin Roosevelt: “It is a terrible thing to look over your shoulder when you are trying to lead — and find no one there.”

The limits of extreme differentiation are clear enough in electoral contests. But the election result also reminded me that there are limits to being different in business too. I’m especially thinking of most established technology-based, multi-sided platform businesses (like Amazon) and other businesses that depend on direct network effects (like Facebook).

These businesses also need to have a majority (or even more) of the market. That’s because their value to customers depends a lot on network effects. Being too different for most people will mean you do not end up getting the majority of people as customers.

So, differentiating — even creating breakaway brands — is certainly good advice in general. But like any advice, it is not always appropriate. And the art of leadership is knowing when not to follow generally good advice and take a different road — even a different road about being different.

© 2020 Norman Jacknis, All Rights Reserved

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