In the early years, performance is the basis of competition. In later years, basis of competition evolves, and performance becomes secondary. This forces companies to compete differently. Once requirements of functionality and reliability are met, customers start to redefine what is not good enough. When this happens, customers start to make buying decisions based on new priorities such as speed, convenience, customization. Basis of competition will change.
Performance surplus is when the product is over serving the customer by delivering more performance than is actually required. At this point, sustaining innovation buys you very little. If you continue to improve the product with sustaining innovation, you become susceptible to disruption by others targeting those customers not willing to pay premium price.
