Competing Alternatives Define "Good Enough"

Just a short post based on a comment I recently made on Ben Thompson's excellent website, Consumers can't really assess whether something is "good enough" in a vacuum -- they need competing alternatives to make this assessment. As competing alternatives change and improve, it seems logical to assume that consumer expectations of what's good enough also change.

Competition also helps consumers assess the value of each company's improvements -- it allows consumers to compare products that do and don't have the new feature or functionality, which helps them decide whether the improvement is meaningful or overserving.

Extending these ideas, industry-wide innovation, often driven by intense rivalry, seems to change consumer expectations of what's good enough, raising the trajectory of the improvement absorption line. The absorption line reflects the consumer's ability to absorb sustaining product improvements. See Concepts page and discussion of Clayton Christensen. When the trajectory of this line shifts up, industry competitors have more runway to make sustaining improvements that don't overserve.

When you look at Apple and Google you can see how competition has benefitted both companies, pushing them to make meaningful product improvements that keep raising consumer expectations of what's good enough. Apple comes out with a new version of Photos, Google comes out with Google Photos and Now on Tap, and Apple comes out with improved Siri functionality and Apple's new "Intelligence" feature. These product improvements/iterations drive each company's future sales and profits.

In slow-changing industries with big time gaps between sustaining improvements, the good enough and overserving concepts seem more relevant. See Concepts page and discussion of Clayton Christensen. These ideas don't seem as relevant in industries like tech, where iterative improvement is continual and can persist over long time periods.

The author owns stock shares of Apple.