The Commodity Trap

January 12th, 2010

Has your product become a commodity?

Such that anyone anywhere can offer an identical (or near enough) product such that your customers don’t know the difference.

You may not think so but think again.

You’d be surprised.

You could be closer to a commodity than you initially thought….

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8 Responses to “The Commodity Trap”

  1. Andrew Hedges Says:

    I asked on Twitter a while back whether programming had become a commodity. You answered “Silly question?” I meant to follow-up with you, but assumed you believe it has.

    I wonder if there isn’t room for “craftware” that is high in quality and can demand a commensurate price tag? Surely not everything is best done by outsourcing to the lowest bidder. Maybe it’s a unique situation, but with software, there can be hidden costs (bugs, poor maintainability & upgradability, etc.) that can come back to bite the consumer of software “chop shops.”

    What do you think, Ben?

  2. Jochen Daum Says:

    Andrew, I think that when people buy craftware, they actually buy the relationship with the vendor and all that entails: intellectual property protection, trust, reliability, maybe even status at times. I think programming is a commodity, but then at the same time standards have been raised and now craftware includes some other aspects.

    Same with coffee really, do you really buy the best tasting cup or the ambience, the convenience or reliability of the taste?

  3. Julius Spencer Says:

    Is trust a commodity?

  4. Ben Young Says:

    @Andrew @Jochen If it can be so readily outsourced I would suggest programming itself is becoming a commodity – however it is only one component of your business. You wrap extra value around it, Agile Development, Beautiful Code and the relationship you have. That’s the point of the post to make you question am I slipping into the commodity kind of area…. (and I think all businesses do at some point).

    @Julius Is trust a commodity? Trust is usually between two parties and that (by definition) cannot be replicated.

    However means to establish trust (from a Marketing perspective) could be a commodity. Interesting point – what do you think?

  5. Julius Spencer Says:

    In this case I look at trust as being the certainty you can apply to another party’s future actions, given a variety of different circumstances.

    I guess it depends on the amount of risk you feel you want to take. If your business doesn’t need much certainty about the future or the product doesn’t create a long term relationship perhaps trust isn’t involved.

    The longer term of the relationship the more trust required perhaps.

    Buying a chocolate bar requires different trust from marriage – slightly different products. 🙂

  6. Jochen Daum Says:

    I think trust can be conciously created and fostered through systems. However, something being a commodity I assume it to be “scalable wihout limit”. I think this is theoretically possible, but unlikely too succeed, because it takes too long, too many variables.

  7. Jochen Daum Says:

    Ben are you not based in NZ? The time on this blog appears to be wrong.

  8. Ben Young Says:

    @Jochen Yup but the blog is hosted in the US so runs on their time zone.

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