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I would be interested to see exactly what is meant by "worse." One of the common lean startup themes seems to be that a simpler product can be an advantage over

I would be interested to see exactly what is meant by "worse." One of the common lean startup themes seems to be that a simpler product can be an advantage over incumbents who have succumbed to feature bloat. I surmise that simpler might equate to worse according to the metrics used in the analysis.

patrickk 16y ago
I think by "worse" it means sheer performance. Think electric cars being generally underpowered and containing heavy batteries compared to their internal combustion engine counterparts which are powered by millions of years of natural geological processes distilled into a convenient liquid. Naturally, electrics are getting better over time. Ford and GM must have laughed for years at those silly beatniks and their wacko electric vehicles, but now GM is betting it's future on electrics. 37Signals' products deliberately do less than their competitors (less performance? the analogy doesn't really fit here) but are highly successful.
- 10ren 16y ago
  It can be sheer performance; going by the innovator's dilemma, in general it is whatever attributes are higher-ranked by the market (ie. customers). This makes sense, because that is what incumbents naturally worry about, and what they compete on. So if your startup is worse on those attributes, you don't threaten them, and they leave you alone. So what's the point of your startup, if you're worse for customers? You're better for other people, who aren't customers of the incumbents, and who rank the attributes differently. There's lots of examples. The coup de grâce is when both you and the incumbent improve over time, but the incumbent becomes better than it needs to be for its existing customers on those attributes, and your startup becomes good enough, but you also have those other attributes - then the incumbent's existing customers switch to you, and incumbent dies. It doesn't always go that way, but it does happen, and that's the pattern studied in the innovator's dilemma. Incidentally, electric vehicles were popular at the dawn of the car; even edison was developing batteries for them. They've been overtaking the petrol car for a long time. But they have made inroads in other markets, such as those disability wheelchair carts (I'm not sure exactly why they're a better fit for electric, but they are certainly not a focus of incumbent car manufacturers - and maybe that's the important thing). sorry, I can't help explaining this whenever it comes up, whether it's needed or not. It's such a cool observation.
  - patrickk 16y ago
    No need for apologies, I find this kind of stuff fascinating. "In 1906, Fred Marriott drove a steam powered vehicle built by the Stanley Brothers to an amazing speed of 127.659 MPH." http://www.steamcar.co.uk/lsr_history.html http://www.steamcar.co.uk/lsr_history.html I think this is amazing considering the time it happened. Henry Ford himself experimented with corn oil and ethanol as a fuel source for his vehicles in 1942: http://en.wikipedia.org/wiki/Henry_Ford#Interest_in_materials_science_and_engineering http://en.wikipedia.org/wiki/Henry_Ford#Interest_in_material... It's amazing that cars evolved to run on refined oil at all! I know I've gone completely off topic here ;-D
    - 10ren 16y ago
      127.659 MPH that's terrifying. Talk about a steam punk. I like Ford's plastic car... sounds like the soviet niva (sp?) made of plywood. Easy to ridicule, but cheap, economical, though not that safe. Unfortunately, once cars went mainstream, cool became the key attribute. It's nice to observe that even the most famous inventors had many failures; you only need one success (probably, s/even/especially/, because more attempts --> more successes).
btilly 16y ago
They are using Christensen's definition so "worse" means "worse by the standards of the market they are entering." Those standards will vary widely according to what market you're talking about. For instance in the 70s and 80s, disk drives were judged entirely on size. So a smaller size of disk was necessarily worse. And this resulted in waves of companies wiped out. In mobile devices today, people care more about portability, ruggedness, and power consumption. So a smaller disk may actually be better. Therefore whether a smaller drive is better or worse depends entirely on the context set by the market it is entering. In the examples you are thinking of, simpler frequently does equate to worse. If the existing companies have sales pitches that are geared towards lists of checkboxes on feature sets, then I guarantee that simpler equates to worse. And yes, this is an advantage for the startup. (Assuming that it can make itself lean enough to live on the scraps at the bottom of the market.) The underlying dynamic is that existing companies find it hard to compete at the low end of their market for a variety of reasons. One of which is that companies tend to develop infrastructures that depend on having certain profit margins. Relative to how the company is structured, the bottom of the market is always unprofitable. Conversely companies always find the top end of their market very enticing. However technology tends to improve at a faster rate than the market's needs increase. So the crappy cheap solution naturally grows up into a sufficient solution. The providers of the cheap solution happily eat up the market, and at every step the incumbents have a hard time defending it. And so incumbents get driven out of the top of the market. This dynamic is frequently recognized while it is happening, but for deep organizational reasons it is really, really hard to change.

patrickk 16y ago

I think by "worse" it means sheer performance. Think electric cars being generally underpowered and containing heavy batteries compared to their internal combustion engine counterparts which are powered by millions of years of natural geological processes distilled into a convenient liquid. Naturally, electrics are getting better over time. Ford and GM must have laughed for years at those silly beatniks and their wacko electric vehicles, but now GM is betting it's future on electrics. 37Signals' products deliberately do less than their competitors (less performance? the analogy doesn't really fit here) but are highly successful.

10ren 16y ago
It can be sheer performance; going by the innovator's dilemma, in general it is whatever attributes are higher-ranked by the market (ie. customers). This makes sense, because that is what incumbents naturally worry about, and what they compete on. So if your startup is worse on those attributes, you don't threaten them, and they leave you alone. So what's the point of your startup, if you're worse for customers? You're better for other people, who aren't customers of the incumbents, and who rank the attributes differently. There's lots of examples. The coup de grâce is when both you and the incumbent improve over time, but the incumbent becomes better than it needs to be for its existing customers on those attributes, and your startup becomes good enough, but you also have those other attributes - then the incumbent's existing customers switch to you, and incumbent dies. It doesn't always go that way, but it does happen, and that's the pattern studied in the innovator's dilemma. Incidentally, electric vehicles were popular at the dawn of the car; even edison was developing batteries for them. They've been overtaking the petrol car for a long time. But they have made inroads in other markets, such as those disability wheelchair carts (I'm not sure exactly why they're a better fit for electric, but they are certainly not a focus of incumbent car manufacturers - and maybe that's the important thing). sorry, I can't help explaining this whenever it comes up, whether it's needed or not. It's such a cool observation.
- patrickk 16y ago
  No need for apologies, I find this kind of stuff fascinating. "In 1906, Fred Marriott drove a steam powered vehicle built by the Stanley Brothers to an amazing speed of 127.659 MPH." http://www.steamcar.co.uk/lsr_history.html http://www.steamcar.co.uk/lsr_history.html I think this is amazing considering the time it happened. Henry Ford himself experimented with corn oil and ethanol as a fuel source for his vehicles in 1942: http://en.wikipedia.org/wiki/Henry_Ford#Interest_in_materials_science_and_engineering http://en.wikipedia.org/wiki/Henry_Ford#Interest_in_material... It's amazing that cars evolved to run on refined oil at all! I know I've gone completely off topic here ;-D
  - 10ren 16y ago
    127.659 MPH that's terrifying. Talk about a steam punk. I like Ford's plastic car... sounds like the soviet niva (sp?) made of plywood. Easy to ridicule, but cheap, economical, though not that safe. Unfortunately, once cars went mainstream, cool became the key attribute. It's nice to observe that even the most famous inventors had many failures; you only need one success (probably, s/even/especially/, because more attempts --> more successes).

btilly 16y ago

They are using Christensen's definition so "worse" means "worse by the standards of the market they are entering." Those standards will vary widely according to what market you're talking about. For instance in the 70s and 80s, disk drives were judged entirely on size. So a smaller size of disk was necessarily worse. And this resulted in waves of companies wiped out. In mobile devices today, people care more about portability, ruggedness, and power consumption. So a smaller disk may actually be better. Therefore whether a smaller drive is better or worse depends entirely on the context set by the market it is entering. In the examples you are thinking of, simpler frequently does equate to worse. If the existing companies have sales pitches that are geared towards lists of checkboxes on feature sets, then I guarantee that simpler equates to worse. And yes, this is an advantage for the startup. (Assuming that it can make itself lean enough to live on the scraps at the bottom of the market.) The underlying dynamic is that existing companies find it hard to compete at the low end of their market for a variety of reasons. One of which is that companies tend to develop infrastructures that depend on having certain profit margins. Relative to how the company is structured, the bottom of the market is always unprofitable. Conversely companies always find the top end of their market very enticing. However technology tends to improve at a faster rate than the market's needs increase. So the crappy cheap solution naturally grows up into a sufficient solution. The providers of the cheap solution happily eat up the market, and at every step the incumbents have a hard time defending it. And so incumbents get driven out of the top of the market. This dynamic is frequently recognized while it is happening, but for deep organizational reasons it is really, really hard to change.