The fundamental story of Lender’s Frozen Bagels is that the winning product isn’t always the best one. Like Ikea for furniture, H&M for clothing, or the Olive Garden for Italian food, Lender’s innovated by finding a way to compromise on quality and reap huge gains in other spheres. To an extent, it’s thankless work. Nobody wants to stand up and proudly proclaim, “I changed the world with my inferior products.” But often this is how the world changes. And if you look at the health care and higher education corners of the American economy where spiraling costs are bankrupting the middle class, you see sectors that are largely untouched by this kind of low-end innovation. The world could probably use a few more Murray Lenders.
I draw a slightly different conclusion. The fact is you (as a business owner) don’t know how to define quality. That’s right. You are not the one to say what’s inferior – or for that matter, superior. Said a different way, your customers are the ones who decide what’s the right level of quality. And they show it not in answers to surveys (who would admit to liking a lousy bagel?) but by their buying habits.
If IKEA’s furniture, often made out of press board, is ” inferior”, what about furniture made of cardboard? Worse you say? But customers are buying it from Zach Rotholz in New Haven. That’s his chair in the photo. Be sure to check out his bed, table, sofa and even his bar at Charigami.com
Obviously cardboard furniture isn’t right for every market, neither is pressboard. But neither is solid maple, cherry wood, or mahogany. Who’s to say that inferior in one context isn’t superior in another? Your customer.
In most industries, there are people who appreciate (and are willing to pay for) different levels of quality. Success comes to those who can supply the quality customers want at a price that’s less than they are willing to pay.