A colleague told me an interesting story about Progressive insurance. Progressive started out by offering insurance to riskier drivers, who were turned down by other carriers. To do that and survive as a business, they had to get way better at underwriting - predicting risk and pricing these policies - than other insurance carriers. Fast forward many years, Progressive is now one of the largest insurers in the US and has expanded beyond this market to serve all drivers. Progressive's early (and necessary) investment in best-in-class underwriting gives it a definite competitive edge against other carriers.
In my previous company, we signed on our first Japanese client, after nearly 100+ US client. The Japanese customer had a significantly higher bar on product quality and data security requirements. It was hard to keep them happy - we had to redo our technical architecture, add more compliance procedures, improve our product reliability, and QA processes. Our CEO had to fly over to Japan twice for to apologize for what we'd have usually considered small mistakes. But at the end of the day, this single, hard-to-please client, forced us to improve the overall quality of our products.
There are at least a couple of lessons here.
(1) More pain, more gain. You'll develop a competitive advantage if you put yourself in a position where you have no option but to innovate and be best-in-class in areas that matter. If you start with an "easy market" where you can get quick gains and coast, you may just plateau at local maxima.
(2) If you are an incumbent and get complacent, it's only a matter of time before you get disrupted by hungrier entrants or leapfrogged by newer technology. Success also traps individuals and companies in old ways, business models, skills, and technology. Jeff Bezos's advice to avoid that is to always focus on making things better for customers, who are "divinely displeased", and to constantly try to disrupt yourself.
In my previous company, we signed on our first Japanese client, after nearly 100+ US client. The Japanese customer had a significantly higher bar on product quality and data security requirements. It was hard to keep them happy - we had to redo our technical architecture, add more compliance procedures, improve our product reliability, and QA processes. Our CEO had to fly over to Japan twice for to apologize for what we'd have usually considered small mistakes. But at the end of the day, this single, hard-to-please client, forced us to improve the overall quality of our products.
There are at least a couple of lessons here.
(1) More pain, more gain. You'll develop a competitive advantage if you put yourself in a position where you have no option but to innovate and be best-in-class in areas that matter. If you start with an "easy market" where you can get quick gains and coast, you may just plateau at local maxima.
(2) If you are an incumbent and get complacent, it's only a matter of time before you get disrupted by hungrier entrants or leapfrogged by newer technology. Success also traps individuals and companies in old ways, business models, skills, and technology. Jeff Bezos's advice to avoid that is to always focus on making things better for customers, who are "divinely displeased", and to constantly try to disrupt yourself.