What Is the Commoditization Trap
What is the commoditization trap?
The commoditization trap is building features because competitors have them, not because customers will pay for them. The company competes on the offer (what is visible in the market) instead of on demand (what people actually buy). Over time the product becomes a slightly worse copy of everyone else, margins shrink, and the only thing left to compete on is price.
How do you stop competing on the offer instead of demand?
Pause any feature that takes more than a day of work and run a blunt peer review. Are we adding this because customers demand it, or because competitors have it? Does it make us more differentiated, or more interchangeable? What is the three-year cost including development, maintenance, infrastructure, and support? The pause is the point. Skipping those questions is how the trap reopens every quarter.
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