Product Strategy on the Beach

It was on Ipanema Beach that I had the most surprising lesson on product strategy.

My girlfriend and I were enjoying the endless Rio de Janeiro summer. Her sister had lent us a beach umbrella which had two features I had never seen before: a corkscrew-shaped tip and retractable handles, both of which made it a lot easier to stick the umbrella in the sand.

I was in awe of what was, at least to me, an amazing innovation. It brought back memories of my childhood. My siblings and I would watch as our dad struggled and suffered to bury the umbrella in the sand. Minutes later, strong winds would blow the umbrella away and we’d run to chase and retrieve it.

As I grew up, I’d follow the same script and it would be my turn to sweat to try to stick the umbrella in the sand.

The innovations in my sister-in-law’s umbrella were clearly superior to the traditional umbrella design, and they weren’t hard or very expensive to implement. I imagined that the competition would soon copy them. So I asked my girlfriend how long her sister had owned that umbrella and was surprised to find that the “new” design was several years old. Looking around I could find no other umbrella like it on the beach. So that innovation had not spread as quickly as I figured. Why not?

The answer hit me when Wardley Maps came to mind.

Wardley Maps are a body of ideas and theories about strategy, applicable mainly but not exclusively to technology, created by Simon Wardley.

According to Wardley, products and ideas evolve due to the laws of competition in capitalism. They arise in the stage Wardley calls “Genesis,” move to “Custom,” then to “Product”, and finally to “Commodity / Utility.” In the Genesis stage, the new thing is still poorly understood, by its creators as well as by its (very few) users. It is more of an idea being explored than a viable product. In the Custom stage, it is more widely accepted but still not a standardized product. In the Product stage, it’s broadly adopted, it has a definite shape, and competition happens by differentiation through innovative features. In the Commodity / Utility stage, competition happens more through reliability and cost than through differentiation.

An interesting phenomenon happens when a product, service, practice, or offer arrives in the Commodity / Utility stage: it enables offers with greater added value.

That’s what happened with beach umbrellas in Rio. Nowadays, not many people bring their own umbrellas to the beach. You usually rent one from the plethora of merchants on the beach. They’re happy to rent umbrellas and beach chairs for a very reasonable price because they know you’ll then buy drinks, snacks, and other offers with a heftier margin. The umbrella is no longer a product in itself: it enables more valuable offers.

My sister-in-law’s umbrella held innovations that made it easier to stick it in the sand. What of it? If I don’t stick it into the sand myself, it makes no difference to me. To the merchant, it’s not important to make his employee’s life easier. To the merchant, who buys the umbrella, reliability (durability) and cost are more important.

Wardley explains that the shift from Genesis to Custom to Product to Commodity / Utility is inevitable due to the forces of competition in capitalism. Since we’re talking about the beach, let me extend the metaphor and say that you should learn to surf the waves of the market instead of trying to fight them. The umbrella manufacturer probably believed that they would gain a competitive advantage when they created the new features. Maybe they even patented them. That was a waste of time, effort, and money. The people who buy the umbrellas are past caring about the features. Competition no longer happens through feature differentiation.

Wardley keeps talking about the importance of situational awareness, about understanding the context you compete in, instead of focusing exclusively on your navel. If the umbrella manufacturer had understood that lesson, they might have saved a lot of energy, money, and frustration.

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