Here’s a mistake that is easy to make, and one that I’ve made myself many times.
If a company does a part of their business really badly, it sometimes leads people to believe that this certain part is a big problem for them. And that if you did that part better than them, then you could compete with the company by having a competitive advantage in this area.
Although there are many examples where this is the case, I would argue that there are equally many that simply lead competitors down the wrong path. Not intentionally, but still.
Take banks and financial services for instance. Generally speaking, their user interface is pretty bad. Sometimes terrible. And there is so much data in and around your account that could be visualized with graphs and pie charts instead of being just numbers in a list. It seems simple. Just improve the UI and you’ll get a long way ahead already.
Now although I’m not saying that we should leave bad UI and random numbers as they are, I doubt that the UI is a big game changer for banks. It has been tried many times. Mint.com is one of the more known examples, and after using it for a while I am still thoroughly unimpressed. It’s better than what my bank can do, but it is not significantly different to create real change. Because the problem with banks is not the interface. Bad UI is a symptom, but it isn’t the disease.
Look at McDonalds. They make hamburgers. If you make tastier hamburgers than McDonalds then you might think that you are getting ahead of the game. But although tastier hamburgers is a good start, this per se will not make you a viable competitor to McDonalds.
Here in Silicon Valley there are hundreds, if not thousands, of tiny startups that are taking on one tiny piece of a problem that they have identified with the incumbents. If you want to sell your company to become a feature of something else – that is fine. But if you want to significantly change something, you might want to consider what the real disease of the incumbent is and then try to cure that – as opposed to simply treating the symptom.