Notice that Commerce is indeed a collection of 5's (best) and I's (worst). The bank was so successful because it had the wisdom to know the difference, to know where it should be winning and losing. Being worst in class on the things that were least important to its customers allowed it to be best in class at the things that were most important to them. That's the trick. You have to be bad in the service of great — and you have to be very smart about which is which.

Here's the trick for incumbents: the experiences we just described feel very different to consumers, but they share lots of back-end processes. The Best Buys and Armanis of the world can compete with players that are more focused, because the two companies gain certain advantages by linking multiple models together. In other words, each service model in the company somehow makes the other service model better off. In Best Buy's case, for example, two distinct models share one location (a very tricky thing to pull off), which achieves economies of scale on real estate.

Notice that Commerce is indeed a collection of 5's (best) and I's (worst). The bank was so successful because it had the wisdom to know the difference, to know where it should be winning and losing. Being worst in class on the things that were least important to its customers allowed it to be best in class at the things that were most important to them. That's the trick. You have to be bad in the service of great — and you have to be very smart about which is which.

When these kinds of questions start to haunt you, it's typically a good sign. It signals a pivot from the kind of customization we just described to some level of standardization. The trigger for this switch is usually the realization that it's not sustainable to keep delivering one-of-a-kind, made-to-order service. Your margins can't take it anymore. Moreover, the complexity of maintaining a wide range of distinct offerings makes the business difficult to scale operationally.

Here's the trick for incumbents: the experiences we just described feel very different to consumers, but they share lots of back-end processes. The Best Buys and Armanis of the world can compete with players that are more focused, because the two companies gain certain advantages by linking multiple models together. In other words, each service model in the company somehow makes the other service model better off. In Best Buy's case, for example, two distinct models share one location (a very tricky thing to pull off), which achieves economies of scale on real estate.