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i agree and am also a big believer in the notion that your product usually needs to be 10x better to displace the competition. however, sometimes there is benef

i agree and am also a big believer in the notion that your product usually needs to be 10x better to displace the competition. however, sometimes there is benefit in not being a "domain" expert. naivety can drive an entrepreneur to do what industry insiders have been conditioned to believe is impossible. while young entrepreneurs are inexperienced, their age also works to their advantage in certain situations.

7Figures2Commas 13y ago
> i agree and am also a big believer in the notion that your product usually needs to be 10x better to displace the competition. Do you have any evidence whatsoever to back this notion up? Without much effort, I can think of a lot of markets in which this isn't the case. One example: eDiscovery software for law firms. There are young companies gaining traction in this market and they're absolutely not "10x better" than the competition as far as technology, usability and overall sophistication go. Some are actually less robust than the competition but are able to compete on price alone because there isn't always a need for the Cadillac offerings.
- energyboy 13y ago
  in the example you bring up, these new eDiscovery software providers are competing on different dimensions. in fact, i would argue that they're carving out a new market (smaller law firms who don't need the cadillac)/disrupting incumbents through a simpler product that better fits the needs of a different type of law firm customer. in this situation, they are a "10x" better product in terms of a better product-company size fit + pricing that is orders of magnitude better (enabled by the focus on a different customer set with a simpler product).
  - 7Figures2Commas 13y ago
    > in the example you bring up, these new eDiscovery software providers are competing on different dimensions. Uhm, most businesses compete "on different dimensions." What's your point? > in fact, i would argue that they're carving out a new market (smaller law firms who don't need the cadillac)/disrupting incumbents through a simpler product that better fits the needs of a different type of law firm customer. Ironically, you're providing a perfect example of the importance of domain expertise because I can tell from your comment that you're not familiar with this market: 1. Not all of the eDiscovery upstarts, many of which are engaged in offering hosted document review, are targeting smaller law firms. In fact, this really isn't such an attractive target market because small law firms are far less likely to have cases large enough to warrant the use of a hosted document review service. 2. Large firms have relationships with multiple eDiscovery vendors, so an upstart vendor has the opportunity to play ball without having to displace entrenched competition in one fell swoop. 3. eDiscovery is ultimately paid for by the client, so clients make the final decision on which vendor is used.
    - 001sky 13y ago
      Uhm, most businesses compete "on different dimensions." What's your point? Your definition of domain expertise seems self-referential. If you define it as "knowing everything which makes a business in this area successful". That's like marketing/consulting speak, so its ok, but Its not adding much explanatory power to the analysis. Can you explain why chipotle and chobani are massively successful? Fast food and dairy grocery are classic commodity products in the US. That's broadly defined. Narrowly defined, the markets in which they compete, their products are also not amazing vs. direct competitors. But they are both massively successful. Why? Domain expertise? Harldly. They are merely competent competitors, making OK but not class leading products. But how do they succeed ast selling at 2x competitor prices? Is it a 10pc better product? Or a 10x one? What is the definiition of domain expertise that reverse engineers the secret to this success? One likely answer is that they dimensionalize their product in certain ways, when bringing them to market, that changes/highlights their relative performance. By bringing a different class of commodity product to bear on an existing market, they mimic/synthesise a class leading product. So, chipotle takes a bog-standard SF burrito and makes it go head to head with pastrami-deli sanwiches for lunch in nYc, where nobody would otherwise touch tex-mexican food. Likewise, chobani takes 2nd rate strained yoghurt and goes head to head with watery americanized stuff. Its quite similar to how starbucks took italian espresso-based coffees mainstream 20 years ago. In other workds, yeah, they are competing in different dimensions by using a different class of product to compete in a commodity industry. But note the prices are not 10% deltas, they are 1x-2x (ie 10x 10%). So in that sense, they are coming to market with products that have if not an order of magnitude higher performance, a significant premium that commands a whole new tier of pricing. This is the equivalent of North Face and Patagonia selling street clothes to urban your and college kids. Again, these are brands that may or may not be class leaders when viewed apples to apples, but they profit from marketing to people who compare them to choices which haver weaker performance in certain dimensions. Its another variation of making a 10x product out of a 10pc product, by altering the product/market fit...not the product. These are abstract market plays, not "marketing" driven plays, in the first instance...they historically gain their nich/cult status through WOMO not traditoinal advertising. In other words, these are considered "hacks" by early adopters (using a product for some other purpose), which then become popularlized by followers and ultimatley are adopted by the mainstream.

7Figures2Commas 13y ago

> i agree and am also a big believer in the notion that your product usually needs to be 10x better to displace the competition. Do you have any evidence whatsoever to back this notion up? Without much effort, I can think of a lot of markets in which this isn't the case. One example: eDiscovery software for law firms. There are young companies gaining traction in this market and they're absolutely not "10x better" than the competition as far as technology, usability and overall sophistication go. Some are actually less robust than the competition but are able to compete on price alone because there isn't always a need for the Cadillac offerings.

energyboy 13y ago
in the example you bring up, these new eDiscovery software providers are competing on different dimensions. in fact, i would argue that they're carving out a new market (smaller law firms who don't need the cadillac)/disrupting incumbents through a simpler product that better fits the needs of a different type of law firm customer. in this situation, they are a "10x" better product in terms of a better product-company size fit + pricing that is orders of magnitude better (enabled by the focus on a different customer set with a simpler product).
- 7Figures2Commas 13y ago
  > in the example you bring up, these new eDiscovery software providers are competing on different dimensions. Uhm, most businesses compete "on different dimensions." What's your point? > in fact, i would argue that they're carving out a new market (smaller law firms who don't need the cadillac)/disrupting incumbents through a simpler product that better fits the needs of a different type of law firm customer. Ironically, you're providing a perfect example of the importance of domain expertise because I can tell from your comment that you're not familiar with this market: 1. Not all of the eDiscovery upstarts, many of which are engaged in offering hosted document review, are targeting smaller law firms. In fact, this really isn't such an attractive target market because small law firms are far less likely to have cases large enough to warrant the use of a hosted document review service. 2. Large firms have relationships with multiple eDiscovery vendors, so an upstart vendor has the opportunity to play ball without having to displace entrenched competition in one fell swoop. 3. eDiscovery is ultimately paid for by the client, so clients make the final decision on which vendor is used.
  - 001sky 13y ago
    Uhm, most businesses compete "on different dimensions." What's your point? Your definition of domain expertise seems self-referential. If you define it as "knowing everything which makes a business in this area successful". That's like marketing/consulting speak, so its ok, but Its not adding much explanatory power to the analysis. Can you explain why chipotle and chobani are massively successful? Fast food and dairy grocery are classic commodity products in the US. That's broadly defined. Narrowly defined, the markets in which they compete, their products are also not amazing vs. direct competitors. But they are both massively successful. Why? Domain expertise? Harldly. They are merely competent competitors, making OK but not class leading products. But how do they succeed ast selling at 2x competitor prices? Is it a 10pc better product? Or a 10x one? What is the definiition of domain expertise that reverse engineers the secret to this success? One likely answer is that they dimensionalize their product in certain ways, when bringing them to market, that changes/highlights their relative performance. By bringing a different class of commodity product to bear on an existing market, they mimic/synthesise a class leading product. So, chipotle takes a bog-standard SF burrito and makes it go head to head with pastrami-deli sanwiches for lunch in nYc, where nobody would otherwise touch tex-mexican food. Likewise, chobani takes 2nd rate strained yoghurt and goes head to head with watery americanized stuff. Its quite similar to how starbucks took italian espresso-based coffees mainstream 20 years ago. In other workds, yeah, they are competing in different dimensions by using a different class of product to compete in a commodity industry. But note the prices are not 10% deltas, they are 1x-2x (ie 10x 10%). So in that sense, they are coming to market with products that have if not an order of magnitude higher performance, a significant premium that commands a whole new tier of pricing. This is the equivalent of North Face and Patagonia selling street clothes to urban your and college kids. Again, these are brands that may or may not be class leaders when viewed apples to apples, but they profit from marketing to people who compare them to choices which haver weaker performance in certain dimensions. Its another variation of making a 10x product out of a 10pc product, by altering the product/market fit...not the product. These are abstract market plays, not "marketing" driven plays, in the first instance...they historically gain their nich/cult status through WOMO not traditoinal advertising. In other words, these are considered "hacks" by early adopters (using a product for some other purpose), which then become popularlized by followers and ultimatley are adopted by the mainstream.