Parity v Differentiation in the Market (POPs v PODs)

A (pea) POD navigating a sea of 'POPs' (Popcorn)

POPs v PODs

You know that feeling when you're looking at your product roadmap and wondering whether you should focus on catching up to competitors or building something completely new?

There's a strategic framework that can help you navigate this dilemma: Points of Parity (POPs) versus Points of Differentiation (PODs). It's one of those concepts that sounds academic at first, but once you get it, it changes how you think about every feature decision.

Let's start with the basics:

Points of Parity are essentially the primary features customers expect from any product in your category. Think about music streaming apps. Whether you're using Spotify, Apple Music, or YouTube Music, you expect a massive music library, offline downloads, and the ability to create playlists. These aren't exciting features anymore, but without them, you're not even in the game.

Points of Differentiation make customers choose your product over another. For Spotify, that might be ‘Discover Weekly’ or ‘Wrapped’ features that make people say "I can't switch because I'd miss this."

The challenge is that many businesses (and their product managers) either obsess over differentiation while ignoring the basics, or get so caught up in feature parity that they never create anything remarkable. I've seen teams spend months building an innovative AI feature while their core content offering was dated. Users didn't care about the AI because they couldn't find what they needed in the first place.

POPs v PODs forces you to be brutally honest about your competitive position. Take Zoom during the early pandemic. They had solid parity features like screen sharing and recording, but their real differentiation was reliability. While everyone else's video calls were dropping or freezing, Zoom just worked. That single point of differentiation, executed flawlessly, made them the default choice for millions of people.

But here's where it gets more complex, your PODs are not static. What differentiates you today becomes expected tomorrow. Netflix's streaming capability was revolutionary when they launched it, but now every media company has a streaming service. So Netflix had to find new ways to stand out, original content, personalisation, global reach. They kept moving the goalposts for themselves.

 

So what are your Points of Parity?

When you're trying to identify your points of parity, start by looking at what your competitors all seem to have. If 80% of successful products in your space offer something, it's probably not optional anymore.

Don't just look at features, look at customer expectations. I once worked with a SaaS company that thought their advanced catalogue of pre-defined reports were a differentiator. Problem is, customers saw a smaller number of configurable reports as basic requirements for any business tool, their catalogue of reports was neither parity nor a differentiator.

Customer research becomes crucial here, but you need to ask the right questions. Instead of "What features do you want?" ask "What would make you immediately rule out a product?" Those deal-breakers are often your points of parity. Also pay attention to what customers don't mention, the things they assume will just work. When was the last time someone specifically praised your login system? Exactly. It's a point of parity.

Next focus on Differentiation

For differentiation, you're looking for the opposite. What are the things that make customers light up, features they tell their friends about, capabilities that solve problems they didn't even know they had. Dollar Shave Club didn't invent better razors, but they solved the annoying experience of buying razors. Sometimes differentiation is less about what you build and more about how you deliver it.

The resource allocation piece is where this framework really pays off. Points of parity should get enough investment to meet standards, but not more. You don't need the world's best login system, you need one that works securely and smoothly.

Save your innovation for areas where you can win. This is why so many successful companies use third-party solutions for parity features. Stripe doesn't build their own email system; they focus on making payments better.

Treat your differentiators as a living document.

• Audit your feature set and ask, "Is this still a differentiator, or has it become expected?" Look ahead to anticipate what might become parity requirements.

• If your main competitor just launched a feature and customers are asking about it, you're probably looking at a future point of parity.

When you start to use this framework it will change conversations with stakeholders. When someone suggests a new feature, instead of debating its merits in abstract terms, you can ask: "Is this helping us maintain parity or creating differentiation?" It's a much more productive discussion because it forces everyone to think strategically about customer value and competitive positioning.

The measurement side is important too, but it works differently for each category. For parity features, you're mostly measuring absence of problems.

• Are customers churning because of missing basics?

• Are prospects eliminating you early in their evaluation?

For differentiation, you want to see active preferenceAre customers choosing you because of specific features?

• Are they willing to pay more?

• Are they recommending you based on unique capabilities?

Let me give you a practical example. I worked with a portal that was struggling to gain traction. They had built some innovative features to facilitate online compliance reporting, but their basic task management was clunky compared to established players. We mapped out their features and realised they were trying to differentiate in areas customers saw as nice-to-have, while falling short on ‘must-have’ functionality. Once they invested in getting their parity features right, their differentiation features started resonating with customers.

Parity is not always a ‘Yes’ to development

The framework also helps with saying no, which might be its most valuable application. When you're clear about what constitutes parity versus differentiation for your market, it becomes easier to prioritise. That clever feature suggestion from the CEO? If it doesn't strengthen a parity requirement or create meaningful differentiation, it probably doesn't belong on your roadmap.

What makes this framework particularly useful is its simplicity. You don't need complex scoring systems or lengthy analysis, just clear thinking about customer expectations and competitive realities.

Simple doesn't mean easy. It requires ongoing market awareness, customer empathy, and the discipline to invest in less exciting but necessary foundational work. You also need the conviction to say no where appropriate and not race to copy every feature from every competitor.

I have worked with leadership teams in the past absolutely obsessed with copying/adapting competitor features in an effort to deliver ‘parity’. This is a sure-fire way to burn through money with little impact on value. We must be cautious and pragmatic.

Balance is Key

Companies that master a balance, navigating POPs with PODs tend to be the ones that last. They never fall behind on the basics, but they also never stop pushing boundaries in areas where they can truly lead. They understand that both sides of the equation matter, and they allocate their energy and resources accordingly. It's not the most glamorous framework in product management, but it might be one of the most practical.