Differentiated isn’t different
different and differentiated are different
Different isn’t differentiated
Great businesses are differentiated. Not different - differentiated. Most corporate buzzwords are to communication what leeches are to healthcare, but the word differentiated is, well, different. It’s a bona-fide linguistic contribution, brought to you, amazingly, by the same brain-dead white-collar collective that popularized “synergy” and “holistic.” The distinction between different and differentiated is often overlooked. To be different is to be unique. To be differentiated is to be unique to the customer.
Here’s how that plays out in action. One evening in college I waltzed out of my house, my heart set on a $1 slice of pizza. Hardly had I turned a corner when a bearpaw of a hand lifted me into the air by my collar. “Got him!” I heard as I dangled helplessly. I quickly surmised that I was being apprehended by a crew of unruly meatheads who had mistaken me for someone else, someone who, allegedly, had menaced these men earlier in the night but fled before the issue could be resolved with gentlemanly violence. Clearly this was a misunderstanding. I quickly explained to my would-be assailants that I was puny and cowardly and self-evidently incapable of masculine aggression. “That doesn’t matter,” the brute responded. He threw me headfirst into a bush of thorns and delivered his boot forcefully into my tuchus. As I brushed the leaves off my head I reflected on a valuable lesson. I felt I was unique from all the other guys on campus, my own person. To my aggressors, though, I was completely interchangeable with my peers. They sought vengeance, not justice. Punishing the wrong culprit made them feel as good as punishing the right one. You see, while I may have been different, I wasn’t differentiated. This same concept applies in business.
Alta Vista’s IPO
Rewind to 2001. Google hadn’t yet monopolized the search engine market. There were hundreds, maybe thousands, of search engines, each with its own user base. This was Game of Thrones meets Silicon Valley - all these search engines were gunning to become what Google eventually claim. Each week some new search engine would pop-up with some totally new must-have feature. Free email, free calendar, faster results, a JPEG butler in a suit to support you in your query.
Alta Vista was, in 2001, one of the frontrunners in this rat race when it filed for IPO, meaning it would become a publicly traded company. When a company IPOs they release a prospectus, a juicy dossier of all their financial data and secret master plans. In its prospectus, Alta Vista gave its Snow White pitch to potential investors. I am the fairest of them all, Alta Vista argued, because I offer free email, sports scores, news, weather, advertising, maps, and everything else! All this was true. Today Alta Vista might be a punchline in an awful Andy Dick VH1 nostalgia special, but in 2001 it was a bona-fide hot tech startup used regularly by ⅓ of the internet (according to its prospectus). But ultimately, Alta Vista offered little that customers (users of the search engines) couldn’t find elsewhere. Alta Vista’s brand of search was different and special and unique, but it wasn’t very differentiated. The company as admitted as much in a later section:
“Many of our current and potential competitors have longer operating histories, larger customer bases, greater brand name recognition, greater access to proprietary content and significantly greater financial, marketing and other resources.”
-Alta Vista Prospectus, 2000
That seems like it could be a problem, no? Another thing Alta Vista stressed was its relationship with DoubleClick, an advertising services company. The issue, again, was that DoubleClick had relationships with mostly everyone on the internet. Maybe AltaVista had a special agreement with DoubleClick, maybe they exchanged friendship bracelets, maybe their CTOs canoed the Colorado River together. Doesn’t matter. Different, but not differentiated. A great example of differentiation is when Google bought DoubleClick in 2007, giving themselves an exclusive partnership and marking the end of the Search Wars.
Luxury bags can be differentiated without being different
Last month TheCut ran a fascinating article about wealthy women who have access to high-quality knock-off luxury handbags, the kind that cost tens of thousands of dollars. The author of the article even took one of the fake bags to an authenticator, who checked all the seams and proclaimed the fake bag real. Yet even with access to perfect fakes, many of these women still bought real bags. Meaning that, when given the choice between two identical bags, they choose bag A even though bag B is $20,000 cheaper. Why? The real thing is differentiated. It’s not different - at least not to most people - but it is differentiated. God knows why, but it is. That’s why Chanel has raised the price of its medium flap bag 60% since 2019. That’s what being differentiated can do for a business.
There are no style points in business
The distinction between differentiation and different should be obvious. Yet every day CEOs and founders get up on their soapboxes and talk about how amazing their people are, how special their culture is, and about all the little things that make them different. They’re not lying (or maybe they are, irrelevant here). They probably do employ wonderful people who donate their bone marrow and adopt elderly cats from shelters. But when your neighbor Jeremy is rushing to buy hemorrhoid cream, he doesn’t give a shit that the person who designed the label runs ultra-marathons. That’s not to say individuality, respect, and decency have no place in business. Of course they do. But they alone can’t make a business successful, and the people who pretend that isn’t true usually end up bankrupt. Maybe the best course is to be different and differentiated. Embrace all the things that make you different, but don’t stop there - embrace things that customers will find different too.