When Being the Best Isn’t Enough


Being the best won’t always win you the trophy.

Everybody wants to be the best, but while being the best is good, it’s not enough. You have to be the best at what matters. Both now, and in the future. The business and technology world is littered with products and companies that were the best at something and were still bypassed by competitors who were better at something else that mattered more to buyers.

The classic example from history comes from the military. The guns of the US Navy battleship USS Missouri, and the other Iowa class battleships, could fire 16-inch shells weighing 2,700 lbs over 20 miles. This coupled with then new RADAR technology and analog computers helped win battles in the Pacific, and helped win WWII.

No ship in battle  has ever matched those capabilities, but eventually those unique abilities ceased to matter because technology has moved forward. One example is the Tomahawk missile which could deliver firepower over 1,500 miles away. Destructive power and range that far exceeded anything the Missouri could launch with it’s traditional guns. It was for this reason that when the Missouri was recommisioned, it was retrofitted with Tomahawk missiles which it used, along with its 16-inch guns during the first gulf war.

The first Honda Civic to be imported into the US provided a beachhead that Honda has leveraged for almost 40 years.

Detroit faced this very same issue during the 1970s gas crisis. Detriot built the very finest muscle cars, big, powerful, high horsepower machines that went very fast in a straight line, and used a lot of gas doing it. The Camaro (if you are a Chevy fan) or the Charger (if you are a Dodge fan) might be two of the finest examples of the muscle car genre. But when the oil embargo hit in the 1970s suddenly Americans decided, at least for a while, that what mattered more than horsepower was fuel economy.

This allowed Honda, Toyota and Datsun (now Nissan) entry into the American marketplace. Not a single one of the these auto-makers had cars that could compete with Detriot’s muscle cars on power and speed, but those weren’t the criteria that buyers cared about most. Suddenly customers were buying these small, underpowered but very fuel efficient imports in large numbers completely blindsiding American car companies.

Even in the world of sports being the best is a constantly shifting target. In the early days of the NBA shots were taken standing still with both hands. It was a “known fact” that using one hand or jumping while shooting would only hurt your accuracy. Of course it only took a few players being successful using the then heretical jump shot and outscoring their opponents before being a great two-handed set shot shooter didn’t matter much anymore – you had to be a good jump shot shooter or you weren’t playing in the NBA.  And in turn the jump shot itself became less important once the game moved to being played above the rim with the legalization of the dunk.

Limited performance compared to mainframes didn’t matter to buyers of IBM’s 1982 PC who were attracted to the low price and comparative ease-of-use.

Some of the more recent examples of this phenomenon exist to show that being the best isn’t enough. In the 1980s PCs couldn’t come close to matching the performance specs and reliability of mainframes. But those weren’t the most imporant characteristics for many business users – what mattered most was flexibility, ease-of-use and low price (relatively speaking). In those areas PCs excelled and buyers flocked to the new machines spending $3,000 or more per machine, or roughly $6,500 in today’s dollars when adjusted for inflation. It wasn’t that the mainframe wasn’t the best and most powerful computer, it’s just that buyers appreciated the relatively low price and ease of use that the PC provided, two areas that became the mainframe’s achilles heel.

To use a current example, today streaming video is has done the same thing to Blu-ray disc sales and Blu-ray player sales. The image fidelity of streamed media probably will never match the quality of a Blu-ray disc played locally, but it doesn’t have to. Fidelity is no longer the prime criteria for most people who watch entertainment. Convenience and choice matter more than asolute image fidelity.

This is also true with music. Once upon a time people built shrines to their audio systems with beautiful sleek glass fronted cabinets to show off and protect their audio components. Speakers were large and just as beautiful. The visual aspect of seeing the audio components was almost as important as the aural abilities of the audio components.

As MP3 players quickly rose in popularity the arguments by the audio cognescenti about the poor quality of the MP3 format fell on deaf ears because people just didn’t care – good enough was in fact more than good enough. Sure an audiophile might realize that certain musical highs and lows were being clipped or removed as part of the digitazation of the music but most people just didn’t notice or care because with just a few presses of the finger they were hearing their favority music no matter where they were. Suddenly those audio shrines seemed irrelevant and today you Craigslist is littered with people selling complete audio systems that cost over $2,000 new and still work perfectly for $50-$100.

Even service based businesses aren’t immune from changing expectations. The US Postal Service, USPS, has no competition when it comes to 6-day a week delivery of first-class mail for the lowest price anywhere in the US, or the world for that matter. It’s not even close.  But FedEx and UPS both realized that speed and reliability mattered more than price for some customers. And those customers, for whom speed mattered, were willing to pay a substantial premium to have a letter/package get somewhere overnight. And that premium is indeed substantial – sometimes it’s a 6,800% premium to have a letter delivered overnight (when compared to a normal delivery of a first class letter). Combined UPS and FedEx generate over $82 billion in revenue delivering letters and packages while the USPS is facing onging budget shortfall and shrinking overall mail volume.

The future will be no different. You have to make sure that your superior technology, or service, is actually superior in ways that are relevant for today’s buyer’s and that you are ready for the changes in the marketplace – six months from now, 12 months from now, and beyond. What’s your favorite story about a company that missed the changing buyer criteria in the marketplace? -t

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