By David Ronald
It’s tempting, in today’s fast-paced tech landscape, to create a product that mirrors an already successful solution.
After all, if there’s already market demand for a product your competitors have built, why not mimic what they have achieved.
It’s a good idea, right?
Wrong. Building an undifferentiated product is a strategic mistake, especially if you are a startup.
Steve Jobs famously said, "I would rather gamble on our vision that make a "me too" product".
A study by a product management association revealed that products that
are differentiated enjoy five times the success rate, over four times
the market share, and four times the profitability compared to products
lacking this ingredient.
Not just that. Building a “me too” product is a sign of laziness.
No One Wants a War
Now, I’ll be the first to admit that companies have had success with a “me too” product. Pepsi, for example, has made billions of dollars from its cola, even though it was launched 12 years after Coke.
This, however, is largely due to Pepsi spending tens of millions of dollars every year to carefully craft a brand identity that has made these two products, that serve the same basic needs, seem like polar opposites!
The competition between Coca Cola and Pepsi Cola has been so fierce, it’s been called the “Cola War”—do you really want to get into that type of struggle?
Doomed to Disappear
Let’s reflect on the fortunes of Plaxo, another inadequately differentiated product.
Founded in 2001, Plaxo was a social networking service that targeted business people interested in professional relationships. In many ways the company was a competitor to LinkedIn.
Today, Plaxo is only a memory. Why? Although there are a few reasons, the most significant one was because it failed to differentiate itself from its competition.
There was a time when Plaxo and LinkedIn were equally popular but Reed Hoffman, founder of LinkedIn, implemented his famous “blitz scaling” strategy and LinkedIn became the dominant business social network service.
Avoid building a product doomed to disappear.
Reasons to be Undifferentiated
Now, many people advise in favor of building “me too” products these days—during my many years of mentoring entrepreneurs, I’ve heard many reasons for this. Here are some of the more popular ones:
- Proven Market Demand—by creating a "me too" product, you're tapping into an already proven market. If there’s existing demand for a product, you’re less likely to face the uphill battle of convincing customers to adopt something completely new. This reduces the risk involved, especially for startups or businesses looking to enter established markets with an existing customer base.
- Lower Barrier to Entry—for newcomers or smaller companies, entering a market with an existing product type can be easier and faster. You don’t have to educate the market on what the product is or why it’s needed – you can focus on refining it and differentiating in other ways. This lowers the barrier to entry compared to creating an entirely new product category that requires more time and investment to build awareness.
- Opportunity for Improvements—a "me too" product doesn’t have to be a carbon copy. It can be an opportunity to improve upon existing solutions. If you identify areas where the competition is lacking – whether it’s user experience, performance, customer support, or pricing – you can build a similar product while addressing those pain points, making your version more appealing.
- Learn from Competitor Mistakes—by creating a "me too" product, you have the advantage of learning from your competitors' mistakes. You can analyze what they’ve done wrong – whether it’s product flaws, marketing missteps, or customer dissatisfaction – and avoid making the same mistakes, improving your chances of success by offering a more polished product.
- Lower Development Costs—developing a product in an already existing category means the foundational work (such as market research, customer needs assessment, and technology trends) has already been done by your competitors. This can save you time and money in product development, as you can leverage existing solutions, frameworks, and technologies, speeding up your time-to-market.
Although it’s beguiling to embrace one or more of these viewpoints, entrepreneurs need to take a long hard look in the mirror and identify what is motivating them to do so.
In my opinion, too many people find the allure of being a startup founder too attractive – and can be too willing to forego more honest analysis of a competitive landscape, along with long-term customer needs and market trends.
Reasons to Avoid Building ‘Me Too” Products
Here are six reasons why you should avoid falling into the trap of building an undifferentiated product:
1. Customer Loyalty Is Built on Value, Not Imitation
In today’s competitive landscape, customer loyalty is built on value, not imitation. Customers are attracted to companies that genuinely understand their pain points and provide unique solutions.
An undifferentiated product, no matter how well executed, cannot build that type of trust. If your product doesn't resonate with customers on a deeper level, they’ll eventually move on to a solution that offers more value, better customer service, or a more engaging experience.
2. Lack of Differentiation Makes It Hard to Stand Out
The most obvious issue with a “me too” product is that it lacks differentiation. In saturated markets, customers are overwhelmed with choices. They aren’t looking for the same thing, they’re looking for something better, faster, or more tailored to their needs.
If your product doesn’t offer something unique, then you’re just one of many. Without a unique value proposition, it’s challenging to grab attention and generate customer loyalty.
3. Competing on Price Is a Race to the Bottom
When you create a copy of an existing product, you’re left trying to compete primarily on price. This often leads to a race to the bottom, where margins shrink, and businesses become unsustainable.
Competing solely on price doesn't build long-term value or loyalty; it just attracts customers who are quick to leave once something cheaper comes along.
By focusing only on mimicking competitors, you miss the opportunity to innovate and add unique value that would allow you to justify a premium price.
4. Long-Term Brand Impact
“Me too” products can damage your brand in the long run. A reputation for innovation and originality attracts customers, investors, and top talent.
By simply copying what others have done, you send a message that your company is unoriginal or lacks the capability to lead in your industry. Your brand’s identity becomes tied to imitation, not to creating the next big thing. That’s a difficult reputation to shake off.
5. The Risk of Being Overshadowed
Building an undifferentiated product doesn’t only lack innovation, it also places you in direct competition with a company that likely has more resources, a larger customer base, and a stronger brand presence.
This creates a disadvantage, especially when you’re trying to compete against a well-established competitor. Unless you can find a niche or an underserved market, you’ll always be living in the shadow of the bigger players, unable to break free.
6. Missed Opportunities Growth
The most successful products are often those that challenge the status quo and offer new solutions to existing problems. A “me too” product, by definition, fails to capitalize on this opportunity.
When you’re only looking at what others have done, you limit your creativity and your potential for innovation. Instead of merely copying what’s out there, you should be asking: How can we improve the experience? What can we do differently to serve customers better?
Embracing innovation not only sets your product apart but also drives growth by meeting unaddressed customer needs.
Conclusion
While building a “me too” product may seem like a safe bet, it’s a strategy that rarely pays off in the long term. Customers crave innovation, uniqueness, and meaningful solutions to their problems.
By focusing on what’s already been done, you miss the opportunity to create something truly transformative that can set your business apart. Instead of mimicking your competitors, focus on creating value, solving real problems, and positioning your product as a category leader.
In the end, that’s how you build a successful, sustainable business.
Thanks for reading.
Did I leave something out? If so, get in touch at david@alphabetworks.com and let me know what it is.
