Your product is either a commodity or hospitality.

Have you ever been to a truly great hotel? You walk in and find yourself thinking:

  • “Oh, this makes sense” when you see an extra pillow
  • “Ok, that’s nice” when you discover a lovely porcelain tea set, with all you need prepared for you,
  • “That’s beautiful” when you open the window.

Everything is just where you want it, whenever you want it, just how you want it before you even realize what it is that you want.

You feel like all your concerns are melting away, and you don’t have to deal with minutiae anymore.

These are the same thoughts I would use to describe my Apple experience. Of course, we can talk about the declining quality of the keyboards, but when interacting with Apple products or great hotels, I don’t mentally tick off the list of benefits. I enjoy the feeling ‘everything being in its rightful place.’

MacBooks and iPhones are expensive – they don’t stack up feature-to-feature or number-to-number to other offerings on the market. My more technically-inclined friends keep reminding me that a different machine has more burro-bytes or zetacycles than a $2000 Macbook.

What I usually tell them is hard to justify, so I started viewing it through a lens of how I would judge a hotel.

Welcome to the Hotel California

Such a lovely place (such a lovely place)

Such a lovely face.

– The Eagles

That hospitality is Apple’s entire business strategy. Playing in the commodity sandbox requires you to play the cutthroat game of racing to the bottom of the lowest margin.

According to Forbes, Apple’s profit share is over four times larger than Samsung, its nearest competitor. 

Despite this success, people rightly point out, that by most of the measurable parameters, devices from Cupertino are falling behind – they have slower processors, smaller pixel density and are more expensive.

And yet, this is not the game Apple plays.

The full vertical integration is the strategy that also works in luxurious resorts. They have thought deeply about every single need of their users and designed an experience to cater to them. There is rarely a need to venture outside.

‘We are programmed to receive.

You can check out any time you like,

But you can never leave!’

– The Eagles

I won’t belabor the Apple point any further, I promise.

Think of the great products you really love. Maybe it is an app for tracking your fishing expeditions or a tool you use at work.

If you feel at home while using this product, then it’s real business is hospitality. A great host knows exactly what his guests want and provides it to them before they realize it themselves.

Focusing on the user’s secret needs, of course, is simple but not easy. Your business has its own budgets and trade-offs, and you will have to make it all work. Both types of businesses have to tackle logistics, value chain, porter’s forces, and labor laws.

But the first question they ask is different.

The hospitality business is about leading with Qualitative Questions, like:

  • “How can we make this experience better.”
  • “What do our guests secretly want?”

Commodity business asks Quantitative Questions first:

  • How can we make this cheaper?
  • How can we have more feature X?

Hospitality is opinionated. To best suit your specific needs, it has to know what is the group of people that it does not want to make happy. In a truly great hotel, the other guests matter. They make you proud to be a part of the group and – in truly exceptional ones – they help you learn a thing about yourself.

There are, of course, hotels that I would consider a commodity and not hospitality. The proliferation of price comparison engines makes it easy to shop around with numbers, commoditizing the whole industry.

When searching for a hotel during my travels, I’ll use Booking.com to find something affordable. But inevitably, after an hour or two, I’ll stumble upon a photo that will make me abandon my price limits.

I’ll know if this hotel is genuinely hospitable if it has a working iPhone charger by the bed instead of some useless desk phone.

The Hospitality vs. Commodity lens helps me better understand the product-market fit for consumer businesses. B2B and enterprise markets have their specifics – like bundles and vendor relationships that make it play by different rules.

But every consumer business can learn a lot from great hotels.

Feel free to attach this post to your expense report, but don’t blame me if it gets rejected.

Still, the stay will be lovely.