If life were fair, the best product in a market would be the best selling product in that market.

Too bad life isn’t fair, and the best product doesn’t always win at sales. Customers unknowingly end up with inferior products, and producers who invest heavily in quality often lose out to second-rate competitors.

The unbalance between sales and quality is the result of the asymmetries of information between producers and consumers. Put differently, your customer is never going to know as much about your product as you do (especially before they make the purchase). They’re also not going to know that much about your competitors’ product either.

To overcome the lack of information, customers tend to rely on signals and referrals, and they often default to the cheapest and/or the first product to come to mind when they think of the category (usually the one though bought last time).

What does this mean?

Brand & Marketing + Story + Signals & Differentiation > Product Quality

Once you have a good (enough) quality product, don’t invest in marginal improvements. Rather invest in your marketing and sales, and in differentiating your product from your competitors. Focus your energy on standing out, above your competition.