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Changing customer needs

Market entropy is good for new entrants.

It’s not impossible to break into a market by brute force, but it’s hard. Very hard. Most successful companies, especially startups, have found tailwinds to harness that help pull them forward.

Changing customer needs are the largest source of entropy in markets. When customer needs rapidly change, there is less advantage in being an incumbent. Instead, legacy companies are left with all the overhead and a product that no longer is what customers want.

There are many causes of changing customer needs. Often there are new and growing segments of customers with different use cases. Existing products may work for them, but they aren’t ideal. The features they care about and how they value them are very different from the customers the legacy company is used to. Companies resist changing core parts of their product for every new use case since it’s costly in work, money, and attention. But every once in a while, what was once a small use case grows into one large enough to support its own company.


8 reads


Tapping into the right level of abstraction

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 co...


8 reads

How Adobe lost users to new startups

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 acc...


6 reads

Identify new market needs

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...


4 reads

Approach the problem using different concepts

How should we understand these market transitions and why these young companies are able to thrive, even against a strong incumbent like Adobe?

These companies have distinct atomic concepts from Adobe. The primitives that their products are built around are fundamentally different from thos...


44 reads

Changes which come with changing market scale

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 ...


8 reads

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