Differentiation requires being different AND better

Being different is not enough, because it's very easy to build a thing that's different from what exists today, because you just have to look at what exists today and build something else. Being better is not enough, because it's also easy to say, 'Hey, I'm going to make this thing better, and just charge you more money for it.' It has to be better than what exists today in a way that matters to the end user.

I think people who adopt a product, or buy a product, or switch to a product, there's two driving forces. One is the attraction of the new solution, and that's basically differentiation. But, on the other side, there's a entry requirement or table stakes.

The "X" refers to times better or more effective - meaning a product needs to be 2-3 times better than alternatives.

For a product to make a difference, it has to be at least two, three more X for people to say, 'You know what? This is offering enough value for me to maybe make a switch in cost.'

As soon as you become a comparison, as soon as you become one of three that they're testing out, you've already sort of lost. It's all about differentiation.

There's feature and functionality and then there's like why should I use this thing in the first place?

We're no longer in this era of good enough is fine. Good enough is not enough. It's mediocre. If you want to win in the game of software, you need to differentiate through design. Craft matters.