Don’t compete on features

The “Ultimate Driving Machine” is a classic slogan that makes BMW compete based on position, not features.

It’s hard to keep things simple, especially when adding so many new features
In my recent post on the virtues of marketing simple products, a couple readers wrote in to write a really interesting questions – here’s a particularly interesting one by Mark Hull:

How do you ensure that by simplifying your product too much, you are not losing a competitive edge by a lack of additional features/functions?

Every product team struggles with this question- it seems like naturally adding more featureset adds more power to the product, yet at the same time adds complexity that makes it hard for new users to even get started. This is a common problem in the initial version of a product, because most of the time the first version doesn’t work, and the most obvious way to solve the problem is to just keep adding features until it starts to click. Yet does this ever work?

Don’t compete on features. If your core concept isn’t working, rework the description of the product rather than adding new stuff.

Make sure you’re creating a product that competes because it’s taking a fundamentally different position in the market. If the market is full of complex, enterprise tools, then make a simpler product aimed at individuals. If the market is made up of fancy, high-end wines, then create one that’s cheaper, younger, and more casual. If the market is full of long-form text blogging tools, then make one that makes it easy to communicate in 140 character bursts. If computers are techy and cheap, then make one that’s human and more premium. These ideas are not about features, these are fundamentally different positions in the market.

BMW is the Ultimate Driving Machine
My favorite example of differentiated market positioning in a very crowded market is BMW’s “Ultimate Driving Machine” slogan. It’s not just a marketing message, you know it’s true when you sit inside a BMW and turn on the engine. Among other things, you’ll notice that:

The center console is aimed towards you, the driver
The window controls are next to your stick so it’s easier for your right hand*
… and obviously the remarkable driving experience

Furthermore, when you go to the dealership, the entire experience keeps reinforcing the “Ultimate Driving Machine” message. The point is, the positioning is about the driving experience and the engineering to back that up.

In a price and features comparison, it’s unlikely that BMW would ever come on top- it’s expensive, and very little of the money goes into the interior and niceties that you’d expect out of a Mercedes. Yet people end up buying BMWs not for the features, but because it’s a fundamentally different car than a Mercedes (or at least it feels that way).

I’ve always felt that Apple goes this way too, where their products are more expensive and often do a lot less than competitive devices, yet win because they have a more cohesive design intention across their whole UX. Again, the idea here is more about competing via a differentiated positioning rather than based on a feature checklist.

You’ll never win on features against a market leader
The other important part to remember is that for the most part, if there’s a winning product X on the market, you’re unlikely to win by creating the entire featureset of X+1 by adding more features. Here’s why:

First off, that’s crazy because you have to build a fully featured product right away, and that might already take years to match a market leader
Secondly, as described in the Innovator’s Dilemma, if you’re mostly copying the market leader and then adding features, those features are likely to be sustaining innovations that is likely on the incumbents roadmap already- by the time you’re done, they’ll either have it or just copy you

Instead, the idea is to have a simpler product that attacks the low-end of the market leader’s product by taking a completely different market positioning. That way, you don’t have to build a fully featured product and you can take a completely different design intention, which leads to a disruptive innovation.

Ramifications for startups building initial versions of a product
I think there are three key ramifications for teams building the first version of a product.

The first is: Don’t compete on features. Find an interesting way to position yourself differently – not better, just differently – than your competitors and build a small featureset that addresses that use case well. Then once you get a toehold in the market, you can figure out what to do there. This doesn’t mean that new features are inherently bad, of course- they are fine, as long as they support the differentiation that you’re promising.

The second thing is: If your product initially doesn’t find a fit in the market (as is common), don’t react by adding additional new features to “fix” the problem. That rarely works. Instead, rethink how you’re describing the product and how you deliver differentiated value in the first 30 seconds. Rework the core of the experience and build a roadmap of new features that reflects the differentiated positioning. Avoid add-ons.

The third is: Make sure your product reflects the market positioning- this isn’t just marketing you know! If your product is called the Ultimate Driving Machine, don’t just slap that onto your ads and call it a day. Instead, bring that positioning into the core of your product so that it’s immediately obvious to anyone using it- it’s only in that way your product will be fundamentally differentiated from the start.

* UPDATE: An astute reader, Greg Eoyang, pointed out that the modern generation BMWs (E90s) are different now- I have an E46 that’s a few years old, so I was basing my observation on that. He writes:

First of all, a most modern BMWs do not have the window controls near the stick, that’s like 2 generations old, they are on the windows just like Honda’s these days. BMW doesn’t even tell you about a lot of the features that have been standard for a long time – such as speed variable volume on the radios – Wide Open Throttle switch (back in the non-CPU days, it cut off the air conditioner when you floored it) – They have improved the concept of a car which is more than the features.

Thanks for the additions Greg!

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http://andrewcross.ca Andrew Cross

The hardest part with this concept is sticking to your guns and saying no to customers who are asking for more features. It’s really easy to commit to a small feature addition to close the sale, but adding a feature is rarely as straightforward as it seems.

What are your thoughts on the Crossing the Chasm approach where you build a few more features to go after a specific niche? Once you get that beachhead, you expand into the mainstream and simplify your product.
http://twitter.com/thinkt4nk Ryan Bales

You nailed it. Great insight.
http://www.vidyard.com Michael Litt

I feel a modern product is 80% sex and 20% function.

80% = it looks and feels great, I’ll tell my friends/co-workers, etc.20% = it performs the basic function I need, because it looks good I’ll keep using it.

Awesome post Andrew!
http://www.w2lessons.com Michael Woloszynowicz

My guess is that Andrew is a big fan of the Crossing the Chasm approach as he briefly eluded to the concept above “once you get a toehold in the market, you can figure out what to do there”.
http://andrewchenblog.com Andrew Chen

to be clear, I’m not saying that features are bad- they are fine, but I think you have to lead with a fundamentally different market position rather than a feature checklist. You should obviously build as many features as it takes to win your market.

re: crossing the chasm, I feel like that’s not about features as much as marketing. Anyway, targeting a niche is fine (esp effective in B2B) but I still don’t think that has to do with a laundry list of features but rather a strong positioning statement plus a key feature that makes it really relevant for the niche.
http://andrewchenblog.com Andrew Chen

when I worked at Mohr Davidow Ventures I sat right next to Geoffrey Moore :) He’s a very nice guy and signed a book for my sister’s college graduation.
http://andrewchenblog.com Andrew Chen

I think what you call “sex” I would mostly think of as great design- but visually and with elegant interactions. For consumer products, it’s true that this is part of the value in itself.
http://www.dalmenyclose.com Ross Hall

Going to offer a counterview. There are times – particularly in technology – where competing on features is absolutely essential.

This is particularly true where the product is being launched that has no clearly defined market, or which is trying to create one. In these instances it could be entirely appropriate to scream about the features to attract the “innovators” who are going to be looking at the product for “geek appeal.” This segment will want to know what the features are, how the product works and what kind of future features they can expect.

As the market matures then it is entirely appropriate to start looking for non-feature based positioning. Of course timing is critical on this as a business won’t want to start marketing “post feature” before there is sufficient interest growing in the mass market, while at the same time leaving it too late could leave the firm vulnerable to a follower.

(Part of the reason why “first mover advantage” plays out most often as a disadvantage).

If you’re going to build a car yes – compete on emotion, price or whatever else distinguishes your segment.

If you’ve going to build the first aerocycles then you may need to go for features first and bring the emotion in later.
http://andrewcross.ca Andrew Cross

I personally really like the approach. But what I’ve been struggling a lot with is how much do you customize your product to be a great fit for that niche, knowing these niche-specific features will likely be unnecessary for the mainstream market.
http://andrewchenblog.com Andrew Chen

Nice insight and differentiating between approaches for new and existing markets.
http://twitter.com/kadnan Adnan Siddiqi

I think that doing something “different” only will not work unless it provides ease. What if someone comes up with a product which is Unique(having less feature) but people are not being able to figure it out how does it work?(In real world it does happen).

IMO, as long as your product is not making your users to think about how it works it would be accepted with open hearts otherwise even if you provide something which noone else ever thought in past.
http://twitter.com/kadnan Adnan Siddiqi

I
think that doing something “different” only will not work unless it
provides ease. What if someone comes up with a product which is
Unique(having less feature) but people are not being able to figure it
out how does it work?(In real world it does happen).

IMO, as long as your product is not making your users to think about how
it works it would be accepted with open hearts otherwise even if you
provide something which noone else ever thought in past.
Anonymous

This is exactly what happened to me recently. I was looking for a url shortener that had strong analytics. I only cared about features, at least in terms of adding vendors to a shortlist.
Positioning was more or less irrelevant. In cases where the company emphasized position over feature-set, I’d go so far as to say it was damaging. My criteria were price, features, and ui in that order.

Overall, I agree with you, Andrew, and this is a fine post. But as Ross says, a car analogy is perhaps wrong here. It may encourage some founders to unleash the kind of generalized ‘we help companies improve sales” that too many startups spray on their homepage.

Messaging should be always be audience-appropriate.
http://twitter.com/JayGilmore Jay Gilmore

The reason companies want to add more features is they figure as they tick more boxes for customers but customers buy on emotion and rationalize with features. Adding features if your USP is vague or built on me too features will not help.
http://twitter.com/JWD_CREATIVE JWD-Creative

Awesome post. We call it “More²” or “more more.” Reactionary implementation and response to the competition, not the customers/users needs. @Jay Gilmore, excellent comment, couldn’t have put it any better.
http://andrewchenblog.com Andrew Chen

re: your URL shortener example, my point is that you lead with the positioning and then build out the features to match.

And it sounds like if there were a “URL shortener for geeks” maybe you’d be really into that, even if it didn’t match all of bit.ly’s features, as long as it was better in the aspects you cared about.

re: plugin, it’s apture.
http://about.me/mikeschinkel MikeSchinkel

Nice post Andrew. The wisdom of your post is apparent.

OTOH, we are currently starting to build a SaaS to solve problems that we and our clients have with we then plan to productize and as I think through all the problems we need streamlined it occurs to me that we need many features to solve our own problems. And as far as I know we are planning to solve problems nobody else is currently solving in our market.

How do you reconcile the “Keep it simple” mantra with the “We are building this initially for our own needs and we really need lots of those features?”

Thanks in advance for your consideration.
http://andrewchenblog.com Andrew Chen

If the problem is worth solving, then you should be able to deliver a LOT of value even with a simple implementation that doesn’t cover all the corner cases. There’s certainly merit to getting to all the ancillary features, but you ought to be able to do this later.

If you’re the first caveman to find fire, even if you have to use rocks and it takes you an hour, the payoff is so huge that it’s worth it. You can work up to a lighter later :)

On the other hand, if you start building features and even with a fairly complete version things aren’t clicking, my take is that going down the path more usually doesn’t help fix the problem. So I think that’s the careful balance that has to be worked out there.
http://www.askthepony.com/blog/ Marcin Mincer

Although I’m a geek and so on I catch myself so often following this pattern. But after rethink — it’s not bad at all.
Herb Lau

good strategy analysis. to expound on it, it’s not necessarily the low-end of the market leader’s position that you go after, but it’s more the MOST VULNERABLE PORTION of the market leader’s customer base, from a psychographic POV more than anything else.

IIRC, a few years ago, Budweiser was US market leader for beer, Coors started pushing hard for the mainstream youth beer market, and made tremendous market gains.
http://andrewchenblog.com Andrew Chen

nicely said!
Robert Graham

I like how you connect positioning and features together directly here. It is so critical to maintain mindshare and consistency makes a real impression.
http://twitter.com/xcelbusiness Helen Cousins

Interesting article Andrew. In particular, the 2nd of your three ramifications is so true, a product that ”doesn’t find a fit in the market” causes many start-ups to “pivot”. Like all fundamentals, making a product that the market actually wants is obvious in retrospect, and often overlooked. Sometimes start-ups have a good product but the wrong customer profile and / or pitch. When we know what we are selling, it’s so much easier to sell it!
http://maxwendkos.com Max Wendkos

An interesting offshoot of this post is that, not only are companies trying to win by adding features to their products, companies are actually trying to make features their products. In my opinion, this is why we have a bubble.
http://twitter.com/JayGilmore Jay Gilmore

As Andrew points out, you need to lead with positioning. You were in search of a solution but because no one had used analytics as it’s USP and all the services likely had weak, if any positioning statements you were left with having to dig into features to determine: “What’s the difference between these services?” I see far too many tech services that are in a crowded space not publicly answering the “What makes our service special and why should you use it?” question.
Anonymous

I agree that not enough startups are upfront with their differentiation. But in this case, there were clear USPs. Awe.sm was clearly trying to be an analytics platform/layer and Argyle a social publishing service for agencies.
Thing is, I didn’t care : ) I wanted to know “can these guys solve the problem I have”. They could position themselves perfectly for my needs, but I was still going to investigate the feature-set.I understand your point though, and admit that I’m perhaps atypical. But I do think Ross is right for startups that are at the bleeding edge of a market or creating something new.
Anonymous

thank you!
http://giffconstable.com giffc

++ great post Andrew!
http://twitter.com/BobSteeger Bob Steeger

Nice write up, Andrew. I was just contemplating a related topic, when did functions become features? A feature is defined as:
- Have as a prominent attribute or aspect
- Have as an important actor or participant
- Be a significant characteristic of or take an important part in

Functions are the things your product does, not the thing that makes it special. If you make MP3 players, your product better have the basic functions, and those are NOT features.

To your point, Features are the things about your product that make it stand out in the crowd, that differentiates it from all the others, that will win you your share of the market. And features don’t have to be functions, as you noted, they can be in the design or the experience. I’m surprised you didn’t mention Starbucks – it’s not the coffee, it’s the experience.

I also agree with your take on positioning, that it is more than the message, it is also knowing the right part of the market that wants/needs this feature (aka niche), and you couldn’t have said it better - that feature had better be there in everything you produce.

This all of course assumes a product breaking into a highly fragmented market. If you can really come up with a unique feature, you may be able to come up with a whole new market (Blue Ocean), and that’s when you’ve really nailed your positioning!
Greg Eoyang

There are some flaws here. First of all, a most modern BMWs do not have the window controls near the stick, that’s like 2 generations old, they are on the windows just like Honda’s these days. BMW doesn’t even tell you about a lot of the features that have been standard for a long time – such as speed variable volume on the radios – Wide Open Throttle switch (back in the non-CPU days, it cut off the air conditioner when you floored it) – They have improved the concept of a car which is more than the features. The flaw is that a car is a composite of features. But, BMW says, it’s a balancing act. A BMW is not the fastest, not the most luxurious, not the cheapest, not the best gas mileage, not the best handling, but they are saying it’s the best car for people who like to drive.

They have established a Meta concept for what they are trying to achieve. It’s not just marketing, its actually understanding what people want and building, refining that concept. The 3 series has been at the top of the charts and what every other manufacturer has been shooting for since it’s introduction in the 1980s. That’s because BMW understands this balance of what a car should be – for some people, who can afford a BMW. They have defined it, focuses on it, refined it and sold it.
http://andrewchenblog.com Andrew Chen

Wow, this is a great comment on the post. I’ll add a footnote in the article about it- I have a 2003 BMW 3-series (E46) so I just wrote what I noticed about it, but I’m definitely not a car guy :)

As you said, I think the important part is that they have a strong positioning and some differentiated features they can point at, to reinforce that they really care- but it’s really more about positioning than it is about building a Mercedes with more features.

That’s sad they moved the window controls, that has been around for many many years.
http://andrewchenblog.com Andrew Chen

Yes, Starbucks coffee is an incredible example as well- I should have mentioned that but I had just been reading about BMWs when I wrote this post :)

Funny enough, there was an original iteration of Starbucks that was extremely authentic- mostly standing up, all espressos, etc., very much in the Italian style. As I recall, this was a total failure and it wasn’t until they Americanized it that things worked. Yet they still maintained little cues to the historical origin of the idea in the coffee sizes, bar seating, etc., so that it had a differentiated premium positioning in the market.

Also agree re: Functionality vs Features. Oftentimes it’s easy to confuse those two.
http://andrewchenblog.com Andrew Chen

Yes- it’s sad that in the world of branding and pure marketing, you have a superficial veneer on top of an otherwise undifferentiated product. A lot of consumer packaged goods are this way. In tech, it’s up to the product manager to be able to connect both parts.
http://twitter.com/brendanbaker brendanbaker

iPad vs other tablets is a vivid example of this as well. You can tell exactly which review journalists just don’t get it.
Philip Yi

I like the post and the lesson, Andrew. Just a point of feedback: BMW and Google are great examples, and you were right to include them. You could take us to the next level of thinking by including other, less well-known examples, as well. Keep on keeping on…
Vincent van der Lubbe

May I add: Or compete on different distribution channel or business model. For example using a different distribution model with a value proposition towards partners who might resell your product. Or find a different source of revenue.
http://twitter.com/kevinkauzlaric Kevin Kauzlaric

“The third is: Make sure your product reflects the
market positioning- this isn’t just marketing you know! If your product
is called the Ultimate Driving Machine, don’t just slap that onto your
ads and call it a day. Instead, bring that positioning into the core of
your product so that it’s immediately obvious to anyone using it- it’s
only in that way your product will be fundamentally differentiated from
the start.”

I’m curious to hear opinions about whether or not startups should bring their first product’s positioning not only into the core of their product, but also into the core of their culture. I’m coming from a service-based startup standpoint that suggests that the essence of the services be instilled in the company’s culture. But what about product-based startups?
http://about.me/mikeschinkel MikeSchinkel

Thanks. I think what you are suggesting is that it is different to build a SaaS for others than to solve problems for one’s self. For one’s self, many of those features are really needed but they can get in the way of marketing a SaaS, especially given how features need to more generic in a SaaS than if just for one’s own needs. Is that a fair summary of your thoughts?
http://andrewchenblog.com Andrew Chen

Not exactly.

If you are waiting for the product to be baked to the point where it has all the features you need to be happy, frankly, you’ll never be done. Even the great masterpiece products or artistic pieces- the creators are never happy with the result. That’s a common theme.

My point is that if you are solving a big problem in a differentiated way, you should be able to solve the first order problems well without doing all the ancillary features- and you can test whether your product will work or not at that point.
http://andrewchenblog.com Andrew Chen

I think most startups, being 2-3 people, don’t too much time thinking about culture :)
http://andrewchenblog.com Andrew Chen

sure, that’s really interesting too. In many cases, doing a simple product that’s tied more strongly to a more ubiquitous platform can be a great advantage. That’s why X for iPhone is great right now :)
http://andrewchenblog.com Andrew Chen

I’ve tried to use more esoteric examples in the past but it turns out people have a tough time relating to them.
http://andrewchenblog.com Andrew Chen

Agree. And same as Google+.
http://about.me/mikeschinkel MikeSchinkel

Thanks for the fast follow up. But can I get you to address one final point and that is the point that building for one’s own needs (or for one customer) is different from building a SaaS for many, and your comments are explicitly not about building for one but instead only about building a SaaS for many, right?

(Of course the latter often comes out of the former because those are proven need vs. “I have a great idea.” But this is just orthogonal elaboration, not relevant to that final point requested.)
http://andrewchenblog.com Andrew Chen

Haha, I guess I don’t get the point of building a SaaS product just for yourself? Ultimately, it’s all about building a business and addressing a market right? And building a product for yourself happens to be one way to get to that approach- but never forget the goal.

If you are just building a product for yourself, literally a market of 1, that’s not really a product right :) I’d call that a pet project or tool or something.
http://about.me/mikeschinkel MikeSchinkel

I must have mis-spoken; I meant “To solve our own problems with a web app (not a SaaS per se) vs. building a SaaS for others.”

The goal is to get to a SaaS, but what is funding the development is our needs for our clients. In one case it’s to manage things that we build for clients (WordPress plugins) but later we wan to move from clients to customers and allow them to use our tools to manage projects for themselves.

For another client we are building a tool to manage WordPress website development for his many clients, and we want to be able to offer that solution to all professional site builders who use WordPress (with our funding client’s blessing, of course.)

Both of these are funded by our clients directly or indirectly. If we focus on minimum features that means ultimately streamlining fewer of the day-to-day problems we face. So we want to get to a SaaS but we want to get there by solving our own problems first.

FYI, we are in Atlanta, and Atlanta isn’t the town where you can just get a web idea funded. So we have bootstrap with client funding in order to get traction, which means it’ll both take us longer but also that we’ll be profitable along the way.

Anyway, I find your post really helpful for framing my thinking. I think we are just still too much in the “solving our own and our clients needs” phase vs. the “building a SaaS for others” phase for the minimum features idea to drive our actions right now. But when we put a name on it and launch it as a SaaS, that will be a different subject entirely. Thanks!

P.S. Most of our WordPress plugin customers are SaaS companies; maybe you know some who need their WordPress plugins developed and/or managed? :)
http://andrewchenblog.com Andrew Chen

Easiest solution: Move to silicon valley.

It’s an incredible time here right now, and if you can’t get funded now, you can’t ever get funded at all :) There’s a limited window where things are this hot…
http://about.me/mikeschinkel MikeSchinkel

Ha! At 48 years of age, I’ve got a few too many things holding me here in Atlanta. If we get traction, it would be an option but not an option to just pull up stakes without a concrete plan for funding.

BTW, this is by no means my first startup. One made it to #123 on the Inc 500 list in 1999 so I’ve been down this road before. :)
http://www.facebook.com/profile.php?id=100002568116515 David Adewumi

Great post Andrew. I think the temptation as a product designer is to say “but maybe this feature is going to do X for us.” One thing that helps is solid customer development a la eric ries/steve blank; it helps dispels ideas of grandeur from us hackers heads by how people respond.

A good solution I’ve heard from a Zynga GM is don’t let users tell you solutions; only let them tell you problems. This ensures that YOU’re the one coming up with product features/hacks, etc. to solve a real problem users have (only realized by cust. dev & user testing).

@andrewchen