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There are two sides to this observation: the product and the user.
For a product, the more people your product serves, the less it serves each of them well. With every user added, the number of needs, preferences, and potential use cases, grows exponentially. With product distribution comes an ever-increasing distribution of the types of people using your product. It takes a rare and incredible amount of discipline to grow well over time in the face of these pressures.
For a user, the more people that are using the same product as you, the less you can afford for that product to be your primary differentiator. Moreover, if that product is in a congested category, it is or will soon be a commodity and you’re not only not advantaged by using it, you’re probably annoyed by an obligation to use it. Every decision must amplify, not take the place of, whatever differentiator you have.
As has been said, anytime you optimize a sub-system, you sub-optimize the whole. The reverse is true as well.
More to come on each of these.
