What value are you adding?

On finding an edge

I came across an idea recently that explains a lot of mysteries: why some products are dead on arrival, why others soar to great heights, even how some people build an undeniable edge.

Inspired by a gem of a tweet, the basic idea is that there are four kinds of value:

Four kinds of value

Most of us focus on table stakes or commodities, instead of building a true edge. This makes us think we’re great, only to be met with indifference from the market. I’m convinced examining and applying this idea will make us 10x better.

Once upon a time…

… I was a management consultant. One of the things they teach is to double down on strengths over neutralizing non-fatal weaknesses. Strengths give us our edge.

The irony is that the value of a strength is judged by the manager and who they need, which varies project by project. So the typical fate of a consultant is conflicting advice which, over time, rounds them into a generalist — useful in many scenarios, but rarely mission critical.

Performing for managers means catering to a market of one, when you are better off keeping the larger market in mind. Even inside a company, your long-term value is a function of your demand from this larger market. As Kendall Roy proved, there’s no freedom in being a cog built to fit only one machine:

But being an interchangeable cog that fits any machine is not ideal either. After all, a cog is the very definition of a mass-produced commodity.

The reasoning is simple: anything that can work in any machine or serve any market is never going to be the most important thing. They may be compatible and inoffensive, but they won’t be finely tuned enough to a particular setting for exceptional performance.

A product manager that can fit inside any company won’t be the best, because the best has edges. Over 40% of the web is built on WordPress, yet as a newsletter writer, Substack is better because it’s laser-focused on emails and subscribers.

In both cases, the interchangeable solution delivers value to a broad market, but the bespoke solution delivers outsized value to a specific group, commanding higher willingness to pay from them. So how do we get there? First, we have to recognize its deceptively close siblings: commodities and table stakes.

Signs of commodity

  • People say they care, but when ranked against other values…
  • … a commodity drops off
  • This makes it low value, low willingness to pay

When you’re in a crowded market, the ocean of commodities can swallow you whole before you even start. Existing players usually offer a big bundle of features. Some are high-value, many are low-value, but we mistakenly assume we have to match everything.

Since a commodity doesn’t change the customer’s decision, you can test this by asking if they would take action, knowing that [commodity] will not be supported right away.

The question is rarely: can we copy everything they do? But rather: can we do one or two things so well that the rest won’t matter (to start)?

Most of the time though, what we believe to be an edge is merely… table stakes. 

Signs of table stakes

  • Most people care about this
  • Most people know it’s high value, so it’s commonly offered…
  • …which cuts willingness to pay

This last point is easy to miss. Once something is broadly recognized as valuable, competition ramps up, and willingness to pay falls. What was once magical is now expected.

In a product, table stakes = things that are necessary for the customer to do what they need. In a person, table stakes = things like working hard, showing up consistently, talking to customers.

Delivering table stakes makes you moderately desirable, not irresistible.
Good, yes, but not differentiated.

So what is real differentiation? I don’t have a perfect answer, but I come bearing some notes.

Narrow and specific

When you are clearly different in a way that some people really care about, it makes them say “hell yes!” even if [you’re more expensive / don’t support a lot of features / inferior in some other way]. And by “some people”, I mean a specific group you can name and reach. This seems obvious, and yet whenever I’m in a brainstorm, the typical pitch is a vaguely appealing idea that fails to answer: who specifically would care about this?

When someone cares, it tracks back to their values and incentives. Example: a non-techy business owner runs their business on duct-tape solutions, and would love to spend money to fix them and grow faster. Even better, they view it as an “investment” which means they’ll pay more than someone who sees it as mere “spending”.

This begs the question… if there’s a starved market willing to pay, why haven’t they been served? Some possibilities:

  • People aware of this market are not equipped to help – this is why the most competitive space in tech = serving other people in tech because we’re all looking to use the same hammer for the same nail
  • They were served, but the solution got worse for their use case – products deteriorate every day from complexity and bloat. A good way to spot this is clusters of negative reviews for mainstream products
  • They’ve been deliberately overlooked – existing players think this niche is too small or unsustainable for their overhead. But maybe this niche is quietly growing, or can be sustainable for a leaner business

The first bucket is fascinating because there’s no adverse selection. The market was not abandoned or forgotten, they were just hidden in plain sight. 

To find these hidden treasures, it helps to ask: where are my peers with similar skills and interests not looking? Doing this feels weird and scary because it’s the exact opposite of chasing high-status things.

It’s easy to get lost along the way. The path of least resistance is to make popular decisions where we appease everyone. Prioritizing a consensus means picking the least controversial option. This is how we end up sinking all our time into table stakes, instead of building an edge. Or copying commodities that add bloat, not real value.

The world nudges us to work towards being “the best”, or at least “better”. To fall in line and focus on attributes that are defined and widely recognized. But like all established paths, there’s a dark underbelly.

Being the best is zero-sum and fleeting. Every single day, yesterday’s best is being replaced. And while being different isn’t bulletproof, the exercise of thinking more independently gives us all a chance to do more interesting work, and maybe just maybe become uniquely valuable.

Read this next:

One last thing: I made an actionable toolkit to grow your product career! Get the shortcuts that took me years of work to figure out.

Product Manager Toolkit


Built with no-code using Webflow 💙
© 2023 Product Lessons