Products that compete for the same consumer demand go through periods of natural divergence (differentiation) and convergence (modularity) of solutions in the market.
During incubation, competing products pick unique attributes to compete on with the hope of resonating with specific groups of users that can start a new demand cycle. However, as innovation slows, for products to remain relevant they must offer more parity so they continue appealing to existing users evaluating other solutions based on other attributes. At this point, solutions in the market start to look a lot like each other, and the one that achieves more economies of scale and still sustains a higher profit margin dries out competitors to becomes the most popular commodity. Being largely modular at this point, demand from competitors shifts to this product at a more compelling price point.
Savvier incumbents who anticipate being disrupted will partner proactively to retain top-of-funnel demand, so they continue maintaining a relationship with their users. This is what’s happening with Waymo offering a modular solution on Uber’s marketplace after having already disrupted Uber’s own autonomous vehicle division.
