The Problem of 10x Better
The quest for creating "10x better" products is often celebrated as the holy grail of product innovation, as it promises not just success but market domination. Yet, product leaders beware: while “our goal is to ship 10x better products” is a catchy rallying cry, it’s unfortunately not that straightforward.
The notion of creating a product that is ten times better than its competitors is a compelling one, and it's often championed as the path to success. However, not all 10x improvements are created equal. One of the pitfalls lies in the assumption that excess performance automatically translates to customer value.
First, let’s break down what the “10x better product theory” is, and share a bit about its history.
What is the 10x Better Product Theory?
The "10x better" theory posits that a product should offer a significant improvement over existing alternatives.
Whether it's in terms of speed, functionality, cost-effectiveness, or user experience, the goal is to outshine competitors to such an extent that customers cannot resist the allure of this superior offering.
The History of 10x Better Products
The concept of a "10x better" product theory can be traced back to the insights of Bill Gross, who founded multiple internet companies such as Overture (formerly GoTo.com) and CitySearch. His entrepreneurial journey, which began with a mail-order business and extended to innovations in audio speakers and accounting software, shaped the way he saw his products.
Gross emphasized a rule of thumb that he used: for a product to succeed, it must be "10x better" than its competitors. This concept is rooted in the recognition that incremental improvements may not suffice given strong competition.
To truly stand out and capture market share, a product should offer a substantially superior user experience, performance, cost-effectiveness, or another critical attribute compared to existing alternatives.
The Illusion of Excess Performance
While the idea of delivering 10 times the value is enticing, there's a critical nuance to consider – the illusion of excess performance.
It's not merely about making a product faster or more feature-rich; it's about ensuring that customers recognize and appreciate that improvement.
Education plays a vital role here. Customers need to be aware that a better solution exists. Testimonials, real-world use cases, and sufficient time and resources for understanding and adoption all contribute to conveying the value of a 10x better product.
The Crucial Element of Differentiation
Being 10 times better doesn't necessarily mean excelling along existing axes as competitors.
A product must tackle an unresolved pain point or offer unique value that sets it apart. It's not about being "more of the same" but about providing something genuinely groundbreaking.
You could buy honey at 10x cheaper prices, and you wouldn’t really stay loyal to that new honey. Or, maybe you could buy honey that stays fresh for 10x longer.
But, imagine that you could now purchase honey that provided you with significantly more health benefits. That’s why manuka honey stands out.
Or, imagine that you can purchase honey that is fair trade and animal cruelty free. Then that brand will stand out.
There’s a reason why new generations of TV screens don’t elicit much emotion for the mass market - you literally cannot detect the difference with your eyes.
Similarly, imagine you had an oven that let you control not just degrees Fahrenheit, but you could control down to hundredths of a degree.
You could run tests for your cookies at 350.00 degrees F vs. 350.24 degrees F. You probably won’t notice the difference, so this 10x better granularity doesn’t matter at all.
Case Study #1: The Paradigm Shift of Smartphones
Sometimes, true differentiation comes from redefining the very essence of what a product can offer. Consider the case of computer technology: year after year, we have witnessed computers becoming faster, more powerful, and increasingly affordable.
However, despite these remarkable advancements, a curious paradox has emerged. The prices of computers continue to drop, even as their capabilities skyrocket.
This apparent contradiction can be explained by understanding the concept of differentiation. To truly stand out and capture the market's attention, a product must offer value on a completely different axis. In essence, it's not just about being 10x better along the same parameters; it's about reimagining the product's purpose and value proposition.
An illustrative example of this paradigm shift is the rise of smartphones. While smartphones may not be 10x more powerful, 10x cheaper, or 10x faster than traditional desktop or laptop computers, they have reshaped the way we perceive and use technology. Their differentiation lies not in raw computing power but in mobility and versatility.
Smartphones provide a level of mobility that traditional computing devices simply cannot match. They are not bound by the confines of desks or the limitations of wired connections. Instead, they empower users to carry the power of computation in their pockets, enabling them to work, communicate, and access information from virtually anywhere on the planet.
This mobility factor has redefined the very essence of computing. It has transformed how we work, socialize, shop, and entertain ourselves. Smartphones have become an indispensable part of modern life, precisely because they excel on a different axis—mobility and convenience.
The success of smartphones illustrates that differentiation doesn't come from incremental improvements in the same direction. Instead, it emerges from a profound shift in perspective. In the case of smartphones, it's the liberation from physical constraints that has made all the difference.
This example serves as a valuable lesson for product managers and innovators. When seeking to create better products, it's essential to look beyond the traditional benchmarks and explore new dimensions of value. It's about understanding the unmet needs of users and finding innovative ways to address them, even if it means venturing into uncharted territory.
Case Study #2: The Gen AI Revolution in Search Engines
For years, search engines have been a staple in our digital lives, tirelessly assisting us in finding information, products, and answers to our queries.
However, the true disruption in the world of search engines did not come from building a better traditional search engine. Instead, it arrived in the form of generative AI (Gen AI), a revolutionary departure from the conventional.
Many of the search giants focused on making incremental improvements on existing axes of value: enhancing search capabilities, refining algorithms, and expanding the scope of searchable content. While these improvements undoubtedly provide value, they never fundamentally changed the user experience.
What Gen AI brought to the table was a reimagining of what a search engine could be. It broke away from the confines of traditional search engines, which required users to input specific queries, and introduced a conversational and intuitive approach.
Instead of typing keywords into a search bar, users could simply talk to Gen AI, much like engaging in a conversation with a knowledgeable assistant.
Here's the twist: Gen AI, while revolutionary, is not known for its pinpoint accuracy. Unlike traditional search engines, which rely on structured algorithms to retrieve results, Gen AI can sometimes "hallucinate" or provide answers that may not be entirely accurate. So, why did it disrupt the search engine industry? Because it offered a wholly different experience.
The key differentiator was the shift from a transactional interaction to a conversational one. Gen AI made searching feel more human, more convenient, and more approachable. It wasn't about entering a query and sifting through results; it was about having a conversation and receiving answers in a natural and friendly manner.
In this context, the traditional search engines, while highly accurate, felt rigid and impersonal in comparison. They were like encyclopedias, providing precise but mechanical responses. Gen AI, on the other hand, felt like a knowledgeable friend, even if its responses weren't always perfect.
This example underscores a fundamental principle of product differentiation. Better products cannot simply be more of the same; they need to offer value on a totally different axis. While traditional search engines focused on accuracy and efficiency, Gen AI ventured into the realm of conversational interaction, creating an entirely new dimension of user experience.
Strategies for Shipping 10x Better Products
In this section, we delve into actionable approaches to make the pursuit of 10x better products more attainable.
Approach #1: Uncover Unmet Needs
Conducting thorough market research and customer interviews can reveal pain points and gaps in existing solutions. By addressing these unmet needs, a product can position itself as genuinely transformative, attracting customers seeking solutions to their pressing problems.
Building a 10x better product begins with a deep understanding of your target audience. Engage in empathetic listening, gather user feedback, and conduct thorough market research. Identify pain points, unmet needs, and areas where existing solutions fall short. Customer-centric innovation forms the foundation of creating products that truly resonate.
Approach #2: Balance Innovation and Affordability
The cost of R&D for a 10x better product can be substantial; and, if we simply pass these costs on to our customers, then they’re not getting a 10x better product anymore, because the product is way more expensive than their baseline expectations.
To strike a balance between innovation and affordability, product leaders should consider phased releases. Initially, focus on core features that deliver substantial value. As the product gains traction and generates revenue, reinvest in further enhancements and refinements.
Approach #3: Test and Validate Assumptions
Before committing substantial resources to a 10x better product idea, test your assumptions rigorously. Develop minimum viable products (MVPs) or prototypes and gauge user reactions. Ensure that your vision aligns with market demand and that customers perceive the value you intend to deliver.
Approach #4: Leverage the "Jobs-to-Be-Done" (JTBD) Framework
JTBD, championed by Prof. Clayton Christensen, focuses on understanding the underlying jobs or tasks that customers hire products to accomplish. By dissecting customer needs at a granular level, you can uncover opportunities for 10x better solutions that address these jobs more effectively.
Leveraging Distribution Instead of Product Functionality
We could focus solely on making the product’s functionality itself 10x better, but as product folks, we need to remember that distribution matters.
It's essential to understand the distinction between the pursuit of a "10x better product" and a "10x better distribution." The former necessitates a product that outshines competitors by an order of magnitude. On the contrary, achieving a "10x better distribution" relies on sheer dedication and hustle, rather than specialized skills. It involves outperforming competitors through exceptional customer care and product quality.
One common pitfall for startup founders is the "build it, and customers will follow" mentality. However, this approach only proves effective when the product's superiority significantly surpasses that of competitors. In cases where the product is not at least ten times better than existing alternatives, the battle shifts from features and product quality to marketing prowess.
What makes the "10x better distribution" approach particularly appealing, especially for novice founders, is its accessibility. It doesn't necessitate a unique skill set but rather a commitment to outperforming competitors in terms of customer care and product quality.
While prioritizing distribution may seem to be a short-term strategy, it can serve as an effective catalyst for jumpstarting a startup. Start by shipping a product that stands on its own legs but is not revolutionary on its own. Then, allocate resources to marketing and establish robust distribution channels through strategies such as SEO and advertising.
An illustrative example of the power of distribution is GoDaddy, a company that achieved colossal success through its branding efforts. Initially struggling in the crowded web-domain and hosting space, GoDaddy pivoted by targeting everyday people online and offline. This strategic shift, despite being risky, ultimately propelled them to become a $13 billion company.
In essence, GoDaddy's transformation underscores the significance of distribution strategy. With the same product as many other competitors, but an entirely different distribution approach, they achieved markedly different outcomes.
Closing Thoughts
The path to creating 10x better products is fraught with challenges. But, by understanding the nuances of innovation, market dynamics, and user perceptions, product leaders can embark on a journey that not only transforms industries but also leaves a lasting impact on the lives of their users, their customers, and their teammates.
Thank you to Pauli Bielewicz, Mary Paschentis, Goutham Budati, Markus Seebauer, Juliet Chuang, and Kendra Ritterhern for making this guide possible.
