The author suggests that product differentiation should be based on a clear Point of View (POV) that forces a choice rather than a comparison and that this unique POV should be engineered into the product itself. The article also points out that while external factors like compute availability and user experience are important, positioning is within the control of the product makers and should be the starting point to avoid commoditization. The author concludes by announcing a forthcoming free course on activating radical differentiation.
Key takeaways:
- Large Language Models (LLMs) are facing commoditization and price pressures due to lack of differentiation and the instinct of buyers to compare products.
- Even though LLMs have meaningful differences among them, the market's instinct to compare and the maker's reflex to compete often overshadow these differences.
- Radical differentiation through category design can help LLMs avoid the comparison trap. This involves identifying a unique point of view (POV), and engineering that POV into the product itself.
- Positioning a product away from direct comparisons and protecting it from pricing pressure can help avoid commoditization and maintain pricing power.