There’s no such thing as sustainable competitive advantage. In this post I'm going to help keep you sane while you're looking for your edge.
This is super important so I want to make sure that you really see this - if you find something that makes your business special you need to squeeze all that you can from it because it will not last. You're then going to need to find something new and the cycle repeats. And, that's ok.
Disruption and innovation are happening at faster and faster paces and it's not just reserved for companies at scale. It's happening in your neighborhood.
(If anyone tries to sell you sustainable competitive advantage as part of their “consulting package”, you can tell them to knock it off.)
Differentiation tends to lose its edge over time. When people see that your business found something that works you shouldn't be surprised to see your competitors also trying similar things. Competitive advantage by its very definition is a fleeting notion - it’s something you are always going to have to work towards.
It’s because people’s tastes, expectations, values change over time. In your business you have to constantly be working towards satisfying the needs of your clients and customers to be successful.
No secret there.
At the same time though you have to be thinking about ways to continue to create that awesome value while keeping your own overhead and expenses as lean as possible. Again, no soul shattering revelations.
These sound like conflicting ideas don't they? In order to grow you have to constantly be on the look out for the next big thing while also being consistent in the products and services you're already offering? Well, it's less of a "this or that" and more of a "yes, and..". What connects these two ideas is the fact that while the problems you solve may change the customer's experience with you and your business stays great. Just looking for problems to solve, talking about or perpetually planning for solving problems will in no way, shape, or form guarantee your business’s success.
This post isn’t really about finding new competitive advantages. It’s about teaching you to recognize that your business's success depends on creating consistent value for people not just about chasing gimmicks.
You’re looking for your “Big Mac”. Seriously. Anywhere in the US you can walk into a McDonald’s, order a “Big Mac” and have your expectations on that product/experience be met. Why? Because McDonald’s makes it the exact same way every time.
Wondering why I didn't say Szechuan Sauce? With all the news around fans of the show "Rick and Morty", McDonald's is doing a great job of being a hype machine without actually delivering any value. It's a gimmick that will pass and because McDonald's doesn't have the agility to really capitalize on this fandom in an efficient way. That means I will probably never get to taste that sweet sweet sauce and McDonald's loses the specific and opportunistic competitive advantage here.
In order to grow your business and to give yourself the room you need to actually test out ideas, products or services you need to record lots and lots of tries. How can you know which changes helped to grow your business when you changed lots of stuff at the same time? Better still, are you changing something on a weekly basis?
I love the Lean Startup model but there is a piece of it I don’t really agree with. The potential customer interviews. Asking people what they want and discovering what they really want are two very different things. You won’t know what people do or don’t want until you ask them to put their debit/credit card information on the line. Here’s how you can work on fostering growth in your business.
The best advice I can give, in terms of a sustainable business model (not competitive advantage), is the same advice I give to my clients looking to iterate, pivot or adapt their business. It’s actually a set of questions I want you to give some honest thought to:
1. Do you have a system that tracks the entire customer cycle?
2. Are you using that system every single time you in front of a customer?
3. How big is your market and how many times have you used that system?
4. Are you solving a relevant and specific problem? (Benefits (NOT features) > Costs)
5. Is your value being clearly communicated?
6. Are you changing one thing at a time?
7. How are you measuring success at each stage of your system?
8. Are you following up and asking “why” with your customers after they buy and even when they don’t?
If you don’t have clearly defined and measured answers to any of these questions don’t innovate, disrupt, adapt, or pivot. You need more data! Figure out what a fair amount of tries are and work from there. Changing your website every day because your products didn’t sell that day is probably not a fair amount of time to test your copy. Before you go changing everything start trying to isolate possible weak spots in your system and change one major variable at a time. This is how you test your market to see if what you’ve changed resonates better and creates more engagement.
Don’t rush to innovate or pivot. It’s time, money, and emotional energy that you can’t get back and that you probably won’t take the time to measure. Instead focus on the boring - the system. With enough tries you’ll start to see patterns in your business. Patterns with variables you can start to manipulate with intention. That’s the secret to getting the best return on your business.
It also helps to keep you from going crazy. Which, I guess is a good thing too.
How do you handle the impulse to constantly innovate, adapt, pivot, or disrupt? Is there a method to your madness? I’d love to see your system in the comments below.