Do you have any evidence whatsoever to back this notion up?

Without much effort, I can think of a lot of markets in which this isn't the case. One example: eDiscovery software for law firms. There are young companies gaining traction in this market and they're absolutely not "10x better" than the competition as far as technology, usability and overall sophistication go. Some are actually less robust than the competition but are able to compete on price alone because there isn't always a need for the Cadillac offerings.

Uhm, most businesses compete "on different dimensions." What's your point?

> in fact, i would argue that they're carving out a new market (smaller law firms who don't need the cadillac)/disrupting incumbents through a simpler product that better fits the needs of a different type of law firm customer.

Ironically, you're providing a perfect example of the importance of domain expertise because I can tell from your comment that you're not familiar with this market:

1. Not all of the eDiscovery upstarts, many of which are engaged in offering hosted document review, are targeting smaller law firms. In fact, this really isn't such an attractive target market because small law firms are far less likely to have cases large enough to warrant the use of a hosted document review service.

2. Large firms have relationships with multiple eDiscovery vendors, so an upstart vendor has the opportunity to play ball without having to displace entrenched competition in one fell swoop.

3. eDiscovery is ultimately paid for by the client, so clients make the final decision on which vendor is used.

There are lots of people who have mid-to-high six and seven-figure a year businesses who are "nibbling at the edges" of markets. To those who aren't impressed I say: don't knock it until you've tried it.

Your definition of domain expertise seems self-referential. If you define it as "knowing everything which makes a business in this area successful". That's like marketing/consulting speak, so its ok, but Its not adding much explanatory power to the analysis.

Can you explain why chipotle and chobani are massively successful? Fast food and dairy grocery are classic commodity products in the US. That's broadly defined. Narrowly defined, the markets in which they compete, their products are also not amazing vs. direct competitors. But they are both massively successful.

Why? Domain expertise? Harldly. They are merely competent competitors, making OK but not class leading products.

But how do they succeed ast selling at 2x competitor prices? Is it a 10pc better product? Or a 10x one?

What is the definiition of domain expertise that reverse engineers the secret to this success?

One likely answer is that they dimensionalize their product in certain ways, when bringing them to market, that changes/highlights their relative performance. By bringing a different class of commodity product to bear on an existing market, they mimic/synthesise a class leading product.

So, chipotle takes a bog-standard SF burrito and makes it go head to head with pastrami-deli sanwiches for lunch in nYc, where nobody would otherwise touch tex-mexican food. Likewise, chobani takes 2nd rate strained yoghurt and goes head to head with watery americanized stuff. Its quite similar to how starbucks took italian espresso-based coffees mainstream 20 years ago. In other workds, yeah, they are competing in different dimensions by using a different class of product to compete in a commodity industry.

But note the prices are not 10% deltas, they are 1x-2x (ie 10x 10%). So in that sense, they are coming to market with products that have if not an order of magnitude higher performance, a significant premium that commands a whole new tier of pricing.

This is the equivalent of North Face and Patagonia selling street clothes to urban your and college kids. Again, these are brands that may or may not be class leaders when viewed apples to apples, but they profit from marketing to people who compare them to choices which haver weaker performance in certain dimensions. Its another variation of making a 10x product out of a 10pc product, by altering the product/market fit...not the product. These are abstract market plays, not "marketing" driven plays, in the first instance...they historically gain their nich/cult status through WOMO not traditoinal advertising. In other words, these are considered "hacks" by early adopters (using a product for some other purpose), which then become popularlized by followers and ultimatley are adopted by the mainstream.

Your if is a big, incorrect one.

Expertise is defined as "expert skill or knowledge in a particular field." It does not mean "knowing everything which makes a business in [a particular industry] successful." There is no way of knowing whether a new business will be successful, but I think most reasonable people would agree with the statement, "An experienced individual who knows a thing or two about the industry he's in almost certainly has a better chance of being successful than a person who knows very little."

> Can you explain why chipotle and chobani are massively successful?

Chipotle was founded by Steve Ells, a graduate of the Culinary Institute of America who worked as a chef before he opened the first Chipotle.

Chobani was founded by Hamdi Ulukaya. He worked on a dairy farm his parents owned as a child and ran a cheese company prior to starting Chobani.

I can't respond to your meandering analyses of these companies, which seems to be based more on assumption and personal perception than fact. But if you believe that the experiences and domain expertise of these two successful founders did not help them spot opportunity and did not contribute greatly to their success, we'll have to agree to disagree.