Withholding features as a Competitive Strategy

copy and pasteWhen Apple announced what was coming in it's iPhone 3.0 software update it activated a hidden marketing weapon that it had deployed the day the iPhone was released. Was it a secret feature that had gone some how unnoticed? Actually quite the opposite, it was a missing feature that Apple had been very openly criticized for: No copy & paste.

When the iPhone first came out, many of my friends could not believe that the iPhone did not have copy & paste. What was Apple thinking they cried. How could they have left out such a simple feature? Personally I didn't really miss it, but they did have a point, why leave out something so basic?

It certainly wasn't the first time Apple has left features out of their products. Some see this as a relentless pursuit of minimalism, that's true but I think there is more to it that that. Apple just doesn't release features that are not ready, even if that feature is super important. If a good solution doesn't exist, they wait until they find one.

As a consumer you might think this makes perfect sense, but having been on the other side I can tell you that it's not easy for a company to hold features until they get them right. Customers are relentless in their demand of features and companies more often than not will do anything to make them happy. The pressure that sales & support teams and even CEO's can exert on product teams to add that feature to the "list" can be unbelievable and your R&D team might even run off with the best intentions and just start building it. The pressure and good intentions would be great if it were not for one simple fact: the customer is seldom if ever right when it comes to talking about what they need.

If you are a customer and you are reading this, bear with me for a moment.

Customers know their problems and daily pains passionately and often in great detail (if you take the time to ask them, a lot of people don't), but they almost never know what the right solution is. This is where good product managers can make a serious difference in the success of a business. They have to know their customers pain to the point where they feel it themselves and then take that pain and share it with R&D where the right solution can be developed (but not in a vacuum! You have got to get feedback from your customers during the design, but that's a different blog post).

So what does this have to do with competitive strategy? Apple clearly understands their customers pains and what features they can and can't live without. If they didn't then the iPhone would not have been a blazing success but I think they revealed something even more powerful when entering into a highly competitive market - the strategic withholding of features.

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When you are in a highly competitive market, either one that has become commoditized or one where the existing players are heavily entrenched and have already huge market share there is one word every product strategist has to focus on first - differentiation. Your product has to be better as well but if you can't find a way to stand out in front of the crowd it's pointless (for example why the Palm Pre is on the path to failure) . Now I used to think that only new, unique things that you could do that your competitors couldn't was the only way to differentiate but Apple has proven otherwise. The features that you don't have that your competitors do is just important and sometimes it's best to withhold one or two that are obvious like copy & paste.

The withholding of features does more than just check the differentiation box, it takes advantage of several other important tactics in competitive strategy such as pushing competitors to react and anticipating their moves. If you can force them to react and you know how they are likely going to respond you have all the makings of a perfect trap.

When Apple withheld copy & paste (regardless if they knew this in advance or not) they found a way to differentiate that would generate a lot of attention, pushed their competitors to respond because they couldn't resist pointing out they had this feature. Apple only needed to wait until the attention and demand for copy & paste reached the right level to spring the trap. What Apple's competitors didn't realize is that they were unknowingly building the market for Smart Phones that had copy & paste, making what was once a minor issue into a big deal, a must have feature. Everyone was talking about it, the reviewers were all pointing it out. Ask consumers everywhere why they hadn't bought an iPhone and they would almost certainly mention the lack of copy & paste. Apples competitors were laughing to themselves "Ha ha! we got Apple right were we want them!".  Unfortunately for the competition, they had just set up the perfect "conditional close" for the iPhone and had walked into the trap totally unaware.

And then the 3Gs came out. It's Apples most successful selling iPhone ever and it has copy & paste.

As a word of warning to any marketing team, never, ever, market a feature up that you can't defend through at least 2 (maybe more depending on your market) of your competitors product release cycles. (one of Erik's rules of competitive marketing - something for another blog post)

The takeaway here is that as a product strategist, marketer, product manager or program manager (whatever your company calls you), when you are competing there is always another box to be thinking outside of. Take a look at your product road map, pick a few features that you know your competitors already have and you know will make a big deal of but don't stop your product from being instantly eliminated from the shortlist. Pick ones that you know are not addressing the top pains of your customers but you can quickly release when they become a sales issue and withhold them. If you are certain about how your competition will react you might even build them and hide them, waiting for them to fall into the trap.