Other times the scale or dynamics of a market shift enough to make a product no longer work despite having been a great fit. Companies are often caught flat-footed by these situations because what they have done successfully for years suddenly starts to falter—and they aren’t sure why. Ebay is a good example of this. Their decentralized auction model was very good in a nascent internet economy when there was a scarcity of items being sold online. Once ecommerce became commonplace, price and speed became much more important factors and Ebay’s decentralized model was at a disadvantage. Amazon was much better at building economies of scale in this post-liquidity ecosystem.

The internet drove entirely new design use cases. Photoshop was built for editing photos and images. It’s a powerful tool that operates at the pixel level. However, many of these new uses weren’t about image manipulation. Images were a component—not the essence—of the job users were trying to accomplish.

For some users, this was designing digital products. Designers at software companies or any company with a website wanted to create the websites and software products they worked on. This is less about image manipulation and more about designing the UI and UX of these digital products. Vectors are more important than raster graphics. The complexity and process of designing these high-value designs also got increasingly more sophisticated. These designers worked with teams of other designers and non-designers. Their designs are part of a larger product development process and what mattered wasn’t just making a design, but how that the entire process could be improved to make collaboration easier and handoff of designs better. Iteratively.

The complexity of the designs and the components in the resulting code became more complex, too. The need for their tools to have a higher-level understanding of the components and variants became more important. It’s increasingly useful for designs to understand the same concepts and abstraction levels as the HTML and CSS in the resulting end product.

But Adobe hasn’t captured it all. And in many of these new emergent use cases and customer types, Adobe has lost the lead to new startups.

The best products map to how customers think about their workflow. They match the abstraction level of their customers: not too high that it’s unusable, but not too low that it’s hard to use easily or extend in more complex ways.

They choose the right atomic concepts.

These are the core concepts around which the entire product is built. They not only align with how customers think of their workflow, but often crystallizes for customers how they ought to. Great atomic concepts are honed and then extended and built upon in more complex compounds that…well for lack of a better word…compound .

Similar companies often have slightly different atomic concepts that end up making them meaningfully distinct. Photoshop is focused on pixels and images. Its focus is on editing images and pictures. And its functions operate by transforming them on a pixel level.

Emergent use cases and new customer types lead to new ideal atomic concepts. These new workflows and different customers have different priorities than existing customers. How they think about their problems and weight possible solutions is different, even if often the end output has similarities. Of course, astute readers will pick up that causality is reversed here. New types of customers are a good proxy for where to pay attention. But it is actually the changed atomic concepts that are what make startups a compelling contender against incumbents in the space.

Customers don’t care about your technical architecture or internal org structure. When these no longer align with the job they are trying to do, then all the sprawl of the company becomes harmful, not helpful. These are the core bedrock that are much more difficult for a company to change mid-flight. Everything that makes an established company strong is built on top of this foundation and will fight back against changing them. Take Blockbuster and its reliance on physical stores and late fees. People often fall into the easy narrative that incumbents are asleep at the wheel. That they are too stupid to see the coming threat. This can be true but it isn’t the most common reason. Contrary to popular belief, many execs at Blockbuster not only saw the threat Netflix posed, but also the opportunity for Blockbuster to have claimed the mantle Netflix now holds. They even spun up a team to take Netflix head on. But what made retail stores and late fees so powerful and profitable for Blockbuster is also what made them so hard to displace. Every move to prepare Blockbuster’s core for a digital future was resisted by execs who generated more revenue, store operators who were livid at being cut out, and Wall Street investors uncomfortable with turning a consistent business into a high risk venture.