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Don’t compete on features

The “Ultimate Driving Machine” is a classic slogan that makes BMW compete based on position, not features.

It’s hard to keep things simple, especially when adding so many new features
In my recent post on the virtues of marketing simple products, a couple readers wrote in to write a really interesting questions – here’s a particularly interesting one by Mark Hull:

How do you ensure that by simplifying your product too much, you are not losing a competitive edge by a lack of additional features/functions?

Every product team struggles with this question- it seems like naturally adding more featureset adds more power to the product, yet at the same time adds complexity that makes it hard for new users to even get started. This is a common problem in the initial version of a product, because most of the time the first version doesn’t work, and the most obvious way to solve the problem is to just keep adding features until it starts to click. Yet does this ever work?

Don’t compete on features. If your core concept isn’t working, rework the description of the product rather than adding new stuff.

Make sure you’re creating a product that competes because it’s taking a fundamentally different position in the market. If the market is full of complex, enterprise tools, then make a simpler product aimed at individuals. If the market is made up of fancy, high-end wines, then create one that’s cheaper, younger, and more casual. If the market is full of long-form text blogging tools, then make one that makes it easy to communicate in 140 character bursts. If computers are techy and cheap, then make one that’s human and more premium. These ideas are not about features, these are fundamentally different positions in the market.

BMW is the Ultimate Driving Machine
My favorite example of differentiated market positioning in a very crowded market is BMW’s “Ultimate Driving Machine” slogan. It’s not just a marketing message, you know it’s true when you sit inside a BMW and turn on the engine. Among other things, you’ll notice that:

  • The center console is aimed towards you, the driver
  • The window controls are next to your stick so it’s easier for your right hand*
  • … and obviously the remarkable driving experience

Furthermore, when you go to the dealership, the entire experience keeps reinforcing the “Ultimate Driving Machine” message. The point is, the positioning is about the driving experience and the engineering to back that up.

In a price and features comparison, it’s unlikely that BMW would ever come on top- it’s expensive, and very little of the money goes into the interior and niceties that you’d expect out of a Mercedes. Yet people end up buying BMWs not for the features, but because it’s a fundamentally different car than a Mercedes (or at least it feels that way).

I’ve always felt that Apple goes this way too, where their products are more expensive and often do a lot less than competitive devices, yet win because they have a more cohesive design intention across their whole UX. Again, the idea here is more about competing via a differentiated positioning rather than based on a feature checklist.

You’ll never win on features against a market leader
The other important part to remember is that for the most part, if there’s a winning product X on the market, you’re unlikely to win by creating the entire featureset of X+1 by adding more features. Here’s why:

  • First off, that’s crazy because you have to build a fully featured product right away, and that might already take years to match a market leader
  • Secondly, as described in the Innovator’s Dilemma, if you’re mostly copying the market leader and then adding features, those features are likely to be sustaining innovations that is likely on the incumbents roadmap already- by the time you’re done, they’ll either have it or just copy you

Instead, the idea is to have a simpler product that attacks the low-end of the market leader’s product by taking a completely different market positioning. That way, you don’t have to build a fully featured product and you can take a completely different design intention, which leads to a disruptive innovation.

Ramifications for startups building initial versions of a product
I think there are three key ramifications for teams building the first version of a product.

The first is: Don’t compete on features. Find an interesting way to position yourself differently – not better, just differently – than your competitors and build a small featureset that addresses that use case well. Then once you get a toehold in the market, you can figure out what to do there. This doesn’t mean that new features are inherently bad, of course- they are fine, as long as they support the differentiation that you’re promising.

The second thing is: If your product initially doesn’t find a fit in the market (as is common), don’t react by adding additional new features to “fix” the problem. That rarely works. Instead, rethink how you’re describing the product and how you deliver differentiated value in the first 30 seconds. Rework the core of the experience and build a roadmap of new features that reflects the differentiated positioning. Avoid add-ons.

The third is: Make sure your product reflects the market positioning- this isn’t just marketing you know! If your product is called the Ultimate Driving Machine, don’t just slap that onto your ads and call it a day. Instead, bring that positioning into the core of your product so that it’s immediately obvious to anyone using it- it’s only in that way your product will be fundamentally differentiated from the start.

* UPDATE: An astute reader, Greg Eoyang, pointed out that the modern generation BMWs (E90s) are different now- I have an E46 that’s a few years old, so I was basing my observation on that. He writes:

First of all, a most modern BMWs do not have the window controls near the stick, that’s like 2 generations old, they are on the windows just like Honda’s these days.  BMW doesn’t even tell you about a lot of the features that have been standard for a long time – such as speed variable volume on the radios – Wide Open Throttle switch (back in the non-CPU days, it cut off the air conditioner when you floored it) – They have improved the concept of a car which is more than the features.

Thanks for the additions Greg!

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