Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“Think different, not better.”
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We are charged with building better products. But what does “better” even mean? This is the million-dollar (or billion-dollar) question.
Many founders define “better” in terms of more or better features. The problem with chasing more is that more features cost more to implement. More importantly, more features dilute your unique value proposition — making it harder, not easier, to stand out.
Playing the “better” game sounds like the better option, but this is a much harder game to win unless you change the game.
Here’s why:
2 Underlying Strategies at Play
I. Inertia favors the incumbent.
Inertia is a law of physics that applies equally to objects and people. Simply put, inertia is resistance to change.
The battle of any new product is causing a change from your customer’s current old way (the status quo) to your new way.
You do this by pulling customers toward your product with a promise of better, which triggers a battle of forces in your customer’s mind:
For your product to convince a customer to switch,
PULL(of your product) > INERTIA (of old way) + FRICTION(of your product)
The challenge, however, is that people don’t perceive these forces equally because of the loss aversion principle.
Loss aversion: We feel losses more keenly than gains. And trying something new feels like a gamble.
Staying with the status quo requires no effort, which amplifies inertia. Doing nothing also eliminates the anxiety of selecting a new way, eliminating friction.
This is why incrementally better products seldom win against the incumbent. To overcome inertia, your product’s pull needs to be 3x-10x stronger, which is a tall order—unless you change the game.
II. Force a choice, not a comparison.
It is far more effective to play a different game with new rules than trying to win the game by the incumbent’s rules.
A "good" new game turns your incumbent’s strength in the old game into a weakness in your new game.
You do this through counter-positioning.
When Airbnb positioned its product as “live like a local,” it turned a strength of hotels (consistency) into a weakness. Why would you want to stay in a Marriott in Barcelona, Rome, Buenos Aires or <insert your travel destination here>?
This forces a choice, not a comparison.
Airbnb becomes the “better” choice for some people and worse for others — which is how they won with their early adopters.
Different > Better.
Now, simply being different is not enough. You have to be different in the things that matter to your customers.
Here’s how you uncover that:
3 Actionable Tactics
I. Uncover your customer’s axes of better.
Study your customers to understand the value system they use to define their axes of better, i.e., how they make good versus bad product choices.
Customer interviews — not surveys, focus groups, or reports- are the best way to uncover this.
Contrary to popular belief, you don’t need to run hundreds of interviews or hire an expensive marketing agency — just 10-20 good founder-led interviews are typically all you need.
The key is structuring your conversations and being intentional about what you need to learn. If you’re interested in learning more, I share complete meta-scripts and examples you can copy in the third edition of Running Lean.
II. Pick two axes for your UVP.
There is no such thing as a perfect product. Every product has problems you can exploit, which is how you define the new game.
One axis of better can be enough to win, but two is better than one because it affords more defensibility. Plus, it makes for a nice business 101 matrix that even Steve Jobs used in the iPhone launch.
Here are Airbnb’s axes of better:
This brings us to the last and most important step.
III. Go to extremes.
Once you pick your two axes of better, go to extremes. Become world-class at those things, even if that means becoming worse at other things.
This is your underlying strategy for building unique and defensible differentiation over time.
Going meta, here is how I define LEANFoundry/LEANSTACK’s axes of better, both of which are built on the Continuous Innovation Framework:
I go to great lengths to create simple and prescriptive step-by-step guides to help founders navigate the highly uncertain terrain of early-stage products.
This repels some people who believe entrepreneurship cannot be distilled down to a systematic process built on universal first principles. They prefer more complex and highly bespoke approaches, and that’s okay.
We’re not trying to win that game :)
If you’d like to learn a simple and practical way to position your product as different versus better, check out my flagship course, BOOTSTART.
Yes, you’ll get step-by-step playbooks for
- understanding your customer’s axes of better,
- defining a new game you can win and,
- testing that the new game works before starting to play it.
The last cohort for the year is kicking off in a couple of weeks.
That's all for today. See you next week.
Ash
Author of Running Lean and creator of Lean Canvas
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P.S.
If you believe you’re already playing a new game with no competition, check out this video: