From Twitter to private conversations, I've heard people claim there's no such thing as "competitive advantage" in a world where anyone can copy your new features in minutes to hours with AI.
This post (and accompanying video) will reference Shreyas Doshi again, and I'll also discuss Michael Porter's work that I started reading after taking Improving Your Product Sense.
As a fractional product leader working across multiple companies, I see a lot. And I have to say, it's untrue that competitive advantage no longer exists. While the speed at which you need to make the right decisions and creatively innovate has accelerated significantly, that's only part of the story.
If your company fails purely because people copy your features, you may have never had competitive advantage in the first place. Here's why: Your company is more than what you build—it's how you build it. As Shreyas often says, if you're a clear thinker, it doesn't just apply to one part of your life or business. It extends to everything. This includes choices in how you designed the business and how it delivers value, otherwise known by Michael Porter as the "value chain."
Most businesses without a unique value chain still struggle to significantly differentiate themselves. Your competitor can get a demo and copy your features, but they don't know:
Who your vendors and partners are
Your team structure
Your choices around outsourcing vs. in-house resources
The extent of your customer support
Let me share a relevant example: eggs. Many people think of free-range chickens as just a marketing tactic. But it's also part of their value chain, and this becomes especially apparent now that bird flu is killing a large part of the egg-laying chicken population in the US and driving up egg prices. Chickens that aren't constantly confined indoors in close proximity are less likely to get and spread bird flu. While these smaller, more humane farms can't match the volume of larger operations, their way of delivering value actually makes them less susceptible to losing large numbers of egg-laying hens.
Though egg prices are up across the board, I've noticed that brands selling free-range eggs haven't raised their prices. Regular eggs now cost about the same as free-range eggs, but the free-range operations are likely faring better because of their value chain. They could price gouge, but they possibly see this as an opportunity for people to try their eggs, since the biggest deterrent before was the price difference. They're likely hoping people will taste the difference and stick with their brands after the bird flu subsides.
But if you're reading this, you probably build digital products. AI can't lay eggs, but it can copy digital features. The point is, even if someone copies your new business months after you start, in the long run, whoever has the best decision-making abilities will win. The best thing you can do for your product and business is invest in improving your thinking, decision-making, and strategy capabilities.
If you need help with your product strategy, I'm happy to talk more. Reach out. And I recommend checking out "Understanding Michael Porter" by Joan Magretta and "Competitive Strategy" by Michael Porter. I also highly recommend applying for "Improving Your Product Sense" by Shreyas (I'm not affiliated with Shreyas, just love his work).
Next week, I'm talking to my former colleague, Tom Rudczynski, now Founder and CEO of Prompt Engineering. We'll discuss AI prototyping and how it's transformed his business's approach to pitching.
Stay curious.
P.S.: I’m a fractional product leader and consultant. Even if you don’t have anything for us to work on together right now, always happy to meet new people for virtual coffee. Reach out here.
P.S.S.: I recently launched Building Successful Product with AI, a workshop for product teams to learn how to leverage AI in their processes to 10x themselves and focus on the highest leverage work. It’s only available for companies right now, and I’m teaching the first one in April. If your team could benefit from it, reach out here.
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