The more a product is differentiated along a dimension consumers care about, the higher price premium it can demand
Differentiation between products is driven by the activities of the firm: product design, product performance, quality, branding, advertising, distribution, and so on. The more a product is differentiated along a dimension consumers care about, the higher price premium it can demand. So, Starbucks can charge $3.50 for a cappuccino, Hermès can charge $10,000 for a Birkin bag, and they can do so largely irrespective of input costs.
When you fly, everyone knows that the dimension that makes us buy our 6 dollars bottle of water is that of distribution, that of the very moment I want to drink. I want to now. And I'm dying of thirst, no matter what the price of a bottle of water in everyday life, at 35,000 feets above the ground, I am willing to pay my beveraege six times the normal price.
Focus is saying no to 1,000 good ideas.
Every time I read a management or self-help book, I find myself saying, “That’s fine, but that wasn’t really the hard thing about the situation.” The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal. The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things. The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed. The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.
The last 10% is 90% of the work.