In one of Horace Dediu’s old podcasts, he discusses with James Allworth, among other topics, the importance of measuring when a product has reached “good enough,” based on the current basis of competition. For a company, recognizing when you’ve reached this point is important, as incremental improvements to the product once you’ve hit this point is over-service, exposing it to low-end disruption.
Horace cites that not only has Apple been a serial disruptor, it has also shown evidence of being able to self-disrupt. He also states that over the last several years, he has struggled with trying to measure this point of good enough for the iPhone — there doesn’t seem to be any good public data points that suggests this. He goes on to explain that Apple however has a good built-in mechanism to detect whether they have reached this point with the iPhone: by concurrently selling the current version alongside the previous version of the product. The idea is that if Apple sees that consumers continue to opt for the previous version while the latest version is in the market, this would serve as a signal to them suggesting that they’ve hit good enough.
This was interesting to me and I started thinking: Do other companies actively do this? How does this overlay with software companies?
My mind then quickly jumped to Software as a Service (SaaS) companies: Does the practice of automatically delivering the latest versions of software deprive them of the valuable of data of knowing when they’ve hit good enough? Is the model itself more susceptible to disruption because of this blind spot?