Essay
September 2nd, 2025
The Illusion of Differentiation
Elliot Crane
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1176 words
7 min. read
Founders love to claim they’re different. A new logo, sharper messaging, maybe a bold color palette. Decks fill with words like “unique” and “innovative.” Investors nod politely. Teams feel reassured that they’ve carved out a special lane. But most of the time, it’s smoke. The company is not differentiated. It only looks that way on slides.
Real differentiation doesn’t happen in branding exercises. It happens in the market. If customers behave the same way toward you as they do toward everyone else, you are undifferentiated, no matter what your tagline says. Differentiation is proven in behavior. Do people switch for you? Do they stay longer? Do they pay more? If the answer is no, the claim doesn’t matter.
This gap between appearance and reality is why so many startups confuse novelty with difference. A clever feature gets added. A new positioning angle is tested. For a moment, it feels like separation. But novelty fades quickly. Once the gloss wears off, the product sinks back into the noise of everything else. Customers aren’t interested in your novelty for long. They’re interested in whether you change something material in their lives.
Look at the glut of direct-to-consumer brands that flooded the market over the past decade. Sleek websites, beautiful packaging, a new “take” on mattresses, razors, cookware, or supplements. For a few months, they felt distinct. But most customers couldn’t tell one from the next. Price wars followed. Discount codes piled up. Many of those brands burned through cash only to discover they had no true moat. Their customers weren’t loyal; they were bargain hunters.
Contrast that with companies who forged genuine difference. When Tesla entered the automotive market, they didn’t just paint the car a new color and call it bold. They redefined what it meant to own an electric vehicle. Range, speed, and software updates weren’t superficial touches. They changed the behavior of car buyers. People lined up to preorder without even test driving. That is what differentiation looks like when it’s real: behavior bending around the product.
The illusion of differentiation is comfortable because it is easy. You can hire a branding agency, run focus groups, or brainstorm a new slogan. Real differentiation is costly and uncomfortable. It requires sacrifice—choosing a lane so clearly that you give up other opportunities. Stripe differentiated by obsessing over developer experience. They could have added consumer wallets, lending products, or point-of-sale hardware early on. Instead, they doubled down on APIs that actually worked. That clarity built gravity. Developers trusted Stripe because it solved one thing better than anyone else.
The test for founders is simple: if you removed your name and logo from your product, would customers still recognize it as yours? If not, you are swimming in the illusion. Think of Apple’s products. Even stripped of branding, the shape, the feel, the interaction patterns reveal the company’s hand. They don’t need to declare differentiation. Customers already know.
The danger of chasing surface difference is that it burns time and energy that could have been spent finding deeper separation. Teams polish marketing copy while customers churn. They redesign websites while the product remains indistinguishable. Every hour spent crafting claims that don’t hold in the market is an hour wasted. The illusion isn’t neutral—it actively prevents the work of building something real.
True differentiation doesn’t always look glamorous. Sometimes it’s hidden in unsexy corners. Costco’s loyalty isn’t built on branding tricks. It’s built on a membership model and a reputation for prices so low that customers believe it instinctively. That’s a moat. Competitors can imitate the warehouse look and feel, but without the same underlying economics, the copy never lands.
Founders often resist this truth because it feels harsh. They want to believe their vision and storytelling can create lasting separation. And in rare cases, story itself does become differentiation. Supreme turned limited drops and intentional scarcity into a business model. But even then, the story worked only because it shaped behavior. People camped out, resold items, and built culture around it. Again, behavior is the proof.
So how do you know when you’re differentiated? Customers tell you in ways they don’t articulate directly. They keep coming back without incentives. They tell friends unprompted. They complain bitterly when you’re unavailable. They pay prices others thought impossible. These are the signals worth chasing. They can’t be faked in a pitch deck.
Differentiation, when it’s real, feels less like a slogan and more like a gravitational pull. Customers don’t just notice you—they move differently because of you. And that difference compounds. Word of mouth, loyalty, and pricing power emerge not from claiming uniqueness but from living it.
The illusion of differentiation is seductive because it gives temporary confidence. The reality of differentiation is harder: it asks you to sacrifice breadth for depth, to resist easy claims, to accept that most people won’t care about you at first. But for those who do, the relationship is strong enough to anchor a company.
Founders should spend less time writing about why they’re different and more time proving it in ways the market can’t ignore. The goal isn’t to look unique. The goal is to build something that changes behavior. If you do that, differentiation is undeniable. If you don’t, all the words in the world won’t save you.
-Crane
Essay
September 2nd, 2025
The Illusion of
Differentiation
Elliot Crane
Share
1176 words
7 min. read
Founders love to claim they’re different. A new logo, sharper messaging, maybe a bold color palette. Decks fill with words like “unique” and “innovative.” Investors nod politely. Teams feel reassured that they’ve carved out a special lane. But most of the time, it’s smoke. The company is not differentiated. It only looks that way on slides.
Real differentiation doesn’t happen in branding exercises. It happens in the market. If customers behave the same way toward you as they do toward everyone else, you are undifferentiated, no matter what your tagline says. Differentiation is proven in behavior. Do people switch for you? Do they stay longer? Do they pay more? If the answer is no, the claim doesn’t matter.
This gap between appearance and reality is why so many startups confuse novelty with difference. A clever feature gets added. A new positioning angle is tested. For a moment, it feels like separation. But novelty fades quickly. Once the gloss wears off, the product sinks back into the noise of everything else. Customers aren’t interested in your novelty for long. They’re interested in whether you change something material in their lives.
Look at the glut of direct-to-consumer brands that flooded the market over the past decade. Sleek websites, beautiful packaging, a new “take” on mattresses, razors, cookware, or supplements. For a few months, they felt distinct. But most customers couldn’t tell one from the next. Price wars followed. Discount codes piled up. Many of those brands burned through cash only to discover they had no true moat. Their customers weren’t loyal; they were bargain hunters.
Contrast that with companies who forged genuine difference. When Tesla entered the automotive market, they didn’t just paint the car a new color and call it bold. They redefined what it meant to own an electric vehicle. Range, speed, and software updates weren’t superficial touches. They changed the behavior of car buyers. People lined up to preorder without even test driving. That is what differentiation looks like when it’s real: behavior bending around the product.
The illusion of differentiation is comfortable because it is easy. You can hire a branding agency, run focus groups, or brainstorm a new slogan. Real differentiation is costly and uncomfortable. It requires sacrifice—choosing a lane so clearly that you give up other opportunities. Stripe differentiated by obsessing over developer experience. They could have added consumer wallets, lending products, or point-of-sale hardware early on. Instead, they doubled down on APIs that actually worked. That clarity built gravity. Developers trusted Stripe because it solved one thing better than anyone else.
The test for founders is simple: if you removed your name and logo from your product, would customers still recognize it as yours? If not, you are swimming in the illusion. Think of Apple’s products. Even stripped of branding, the shape, the feel, the interaction patterns reveal the company’s hand. They don’t need to declare differentiation. Customers already know.
The danger of chasing surface difference is that it burns time and energy that could have been spent finding deeper separation. Teams polish marketing copy while customers churn. They redesign websites while the product remains indistinguishable. Every hour spent crafting claims that don’t hold in the market is an hour wasted. The illusion isn’t neutral—it actively prevents the work of building something real.
True differentiation doesn’t always look glamorous. Sometimes it’s hidden in unsexy corners. Costco’s loyalty isn’t built on branding tricks. It’s built on a membership model and a reputation for prices so low that customers believe it instinctively. That’s a moat. Competitors can imitate the warehouse look and feel, but without the same underlying economics, the copy never lands.
-Crane
Founders often resist this truth because it feels harsh. They want to believe their vision and storytelling can create lasting separation. And in rare cases, story itself does become differentiation. Supreme turned limited drops and intentional scarcity into a business model. But even then, the story worked only because it shaped behavior. People camped out, resold items, and built culture around it. Again, behavior is the proof.
So how do you know when you’re differentiated? Customers tell you in ways they don’t articulate directly. They keep coming back without incentives. They tell friends unprompted. They complain bitterly when you’re unavailable. They pay prices others thought impossible. These are the signals worth chasing. They can’t be faked in a pitch deck.
Differentiation, when it’s real, feels less like a slogan and more like a gravitational pull. Customers don’t just notice you—they move differently because of you. And that difference compounds. Word of mouth, loyalty, and pricing power emerge not from claiming uniqueness but from living it.
The illusion of differentiation is seductive because it gives temporary confidence. The reality of differentiation is harder: it asks you to sacrifice breadth for depth, to resist easy claims, to accept that most people won’t care about you at first. But for those who do, the relationship is strong enough to anchor a company.
Founders should spend less time writing about why they’re different and more time proving it in ways the market can’t ignore. The goal isn’t to look unique. The goal is to build something that changes behavior. If you do that, differentiation is undeniable. If you don’t, all the words in the world won’t save you.