Product Differentiation vs. Product Improvement


Build a better mousetrap. That’s what they used to say. But that doesn’t differentiate our products. Everyone is doing better, we need to do different.


Innovation is good. But as Geoffrey Moore points out, it has to be differentiated too. We talked about this when discussing Kano analysis and prioritization of requirements.

One of Mr. Moore’s points is that innovation isn’t the goal – product differentiation resulting from innovation is the goal. He’s absolutely right. An innovative way to minimize the window of an application isn’t likely to differentiate the product from it’s competitors. An innovative way to automatically validate requirements would be the proverbial better mouse trap.


More precisely, valuable differentiation. Differentiating our products in ways that don’t matter is a bad idea, and common mistake. Differentiation should be in areas that redefine the problem, or solve problems that no one ever combined before.

The idea of a mashup is interesting, most mashup execution isn’t. Being able to view flikr photos geotagged with the location on the Google map is pretty cool. Being able to read Zagat restaurant reviews for the restaurants on the Google map would be valuable. Showing the restaurants near my hotel with a $20-$30 dinner option, and at least 3 stars would be even better. Might as well offer a coupon code with the directions. Anyone done that yet?


Sailboats can sail into the wind because the sail acts like a wing. Why did we wait decades until someone actually used a wing instead of a sail? We’ve had the data since the Wright Brothers built the first wind tunnel a hundred years ago. People were trying to make sails better instead of making sailboats different. We had to wait until someone had a differentiated innovation.

Sailboat designers weren’t focused on the market requirement – make sailboats faster. They were focusing on a product specificationmake a better sail.

Seth Godin puts it succinctly:

When you make something that works a little better, you’re playing the same game, just keeping up with the status quo. When you make something different, on the other hand, you’re trying to change the game.


When comparing our products to our competitor’s products, if we find ourselves saying “It’s like X only better” we’re in trouble. If we’re saying “This is nothing like X because…” Make sure there’s differentiation. And make sure its valuable.

2 thoughts on “Product Differentiation vs. Product Improvement

  1. I think there is a trap a lot of people fall into, especially techie types. “Different” does not mean “better”. Sometimes incremental improvements make more sense than something new (of course, sometimes just the illusion of different makes it seem like things have improved).

  2. Deepak – thanks for commenting – and great point.

    There is definitely a point in time where incremental improvements are better than additional functionality. If we look at the following chart, used most recently in MRD Writing Tips, we see that there is a law of diminishing returns in place.

    Profit Maximizing incremental improvement

    When we are on the left side of the tangent point, we can benefit from incremental improvement. When the amount of that benefit exceeds the expected benefit of a new feature introduction, we should do it.

    Thanks again,

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