ChatGPT vs DeepSeek: Risk of Building Only on Product Features

In recent months, we've witnessed an interesting shift in the artificial intelligence industry: The emergence of DeepSeek has shaken the seemingly secure leadership of OpenAI's ChatGPT, proving that nothing in life is certain.

This case provides an excellent opportunity to reflect on something I consistently observe in brand building: What happens when we build or maintain a business based solely on our product?

To answer this question through the case of DeepSeek versus ChatGPT, let's examine how this product-centric strategy can present opportunities and risks, but most importantly, how to avoid its pitfalls.

The Commoditization Trap
OpenAI's ChatGPT pioneered the democratization of access to LLMs, opening the door to concrete interaction with artificial intelligence and creating an immediate functional connection with users. However, we could say they stopped there. While they've expanded their product portfolio over time, everything remained centered on functionalities, capabilities, and technical characteristics – essentially a Product Brand that stole the spotlight while the main Brand maintained little connection with its audiences (understanding audiences as the different publics that interact with the Brand).

What happened next? DeepSeek emerged from China with a very similar proposition (to say the least):

• The same performance and functionalities.
• A significantly lower price (comparing API Output Price per 1M tokens: ChatGPT costs $60 while DeepSeek costs $2.19 – 27 times less).
• A practically identical user interface.
• Plus an Open Source approach (public access to source code), which speaks to a different way of connecting and delivering value to users – something we'll likely see more of in terms of democratizing and facilitating this technology.

Functionalities Aren't Enough
When we talk about ChatGPT, DeepSeek, and other industry players, we're not just witnessing a features war. What's really at stake is the ability to build lasting meaning. Let me explain: While ChatGPT was a pioneer, the arrival of new players demands competitiveness beyond product features and requires building connections through emotional bonds, delivered value, and ultimately, Brand.

With increasingly informed and demanding users, brand attributes such as transparency and flexibility are increasingly scrutinized. This is where DeepSeek has taken a step forward by embracing Open Source, not just as a technical statement but as a values statement. They're saying "we believe in collaboration and open access." This kind of positioning transcends product features and connects with fundamental values that resonate with audiences.

To put this into perspective, consider Apple: A Brand that also started with a product but understood that to grow, position itself, and create a community, it needed to build from deep Brand meanings: Simplicity, Design, Innovation.

Today, their products transcend functionality, generate belonging, and even improve lives, like the Apple Watch helping monitor health and save lives, or AirPods, which help people with reduced hearing ability.

It's Not About Price, It's About Value
The price-value relationship is particularly interesting in this case due to the significant difference between both platforms, not just in end-user cost but also for investors.
In terms of positioning, any strategy primarily based on price could be problematic because its perceived value will remain tied to a number.

So it's not just about being cheaper or more expensive, but about the ability to justify price with value through Brand building. When a company builds clear Brand meanings, price stops being the decisive factor and becomes another element of the value proposition.

As Amazon’s Jeff Bezos said: "The only way to win in the long run is to make your brand irreplaceable, even if you're not the cheapest one."

Continuing with Apple's case: They maintain their prices without discounts or rebates, despite many users claiming Samsung offers superior features. What enables Apple to maintain this strategy? They have built a brand equity and value that justifies their product prices.
The same happens with Tesla versus Chinese electric car manufacturers: Despite some competitors having enhanced features, Tesla maintains its value position thanks to Brand strength.

For DeepSeek, it will be interesting to see their evolution from here, but they leave us with two relevant points: they break ChatGPT's scheme by exposing the cost position, but will they become the go-to option for startups and SMEs – those not captured by more expensive platforms?

Intangibles as True Differentiators
According to a Harvard Business Review study, 80% of a company's economic value relates to its intangibles, with Brand being the principal intangible. 

Brand intangibles give business elasticity to evolve and adapt, allowing them to build greater relevance through their tangibles and user experiences.

For ChatGPT, the challenge lies in transcending its initial identity as a technical tool.

Being born as a Product Brand — in certain cases and contexts – can be useful as an initial strategy, helping break the ice and create market space that's increasingly difficult to achieve, and then leveraging that momentum to generate greater connections.

The risk, however, lies in stagnating in this role, maintaining the same product discourse or, like BlackBerry, prioritizing hardware over user experience.

If there's one company that has done a good job of evolving from its product, it's Red Bull. They transformed from an energy drink to creating an entire community around extreme sports, even owning their Formula 1 team today. What made that possible? Besides proper management, a major catalyst was their famous slogan and tagline, "Red Bull gives you wings," which provided a coherent and consistent meaning to earn their own space in the marketplace and with their audience.

Other cases that illustrate the importance of transcending meanings include:

- BMW: Doesn't sell cars. They talk about the joy of driving.

- Decathlon: Doesn't sell sports accessories. They talk about experiencing sport at your own pace.

- Bimbo: Doesn't sell baked goods. They talk about a better-nourished world.

- Coca-Cola: Doesn't sell soft drinks. They talk about the happiness of sharing.

- Zappos: Doesn't sell shoes. They talk about service with the best experience.

- Cirque du Soleil: Not just a circus. They offer a new way to experience it.

Action Over Reaction: How Can We Avoid Mere Survival?

Competitors are often seen as threats, making us worry about external factors while forgetting our internal state, but competitors can also catalyze our evolution as a business and Brand.
They drive us to evolve, to reinvent ourselves, and to question whether what we have is truly a differentiator or merely functional rationales. Something that makes us chosen today, but not tomorrow.

Today, technology is the main discourse in many organizations (especially in the tech sector), but that is just the tip of the iceberg. The challenge lies in our capacity to grow, stay relevant, and build a Brand, starting with the product, but enabling lasting connections with customers.

While marketing, products, and technology should be vehicles for the Brand, –what sustains it – the Brand should be the vehicle for the business — what builds the meaning of the organization.

To avoid falling into the trap of competing solely on product, leaders should ask themselves:

• What value are we delivering beyond rational benefits?
• What value do we bring to the market compared to the competition?
• If someone emerged with an identical product, how are we differentiating ourselves?
• Do our differentiators and positioning help or hinder our future competitiveness?

These and other questions can make a big difference if we ask them at the right time.
If you have a business or organization, you have a Brand, whether you manage it or not. You can choose to actively define and build the meanings you want to project or let people and the market decide the place your business will occupy.

Summarizing:

• Sustainable differentiation comes from building through action, not reaction. When a Brand only reacts, it loses the ability to establish its positioning with clarity and coherence.
• A product and other business tangibles can be copied, but your intangibles cannot, or at least will be much harder to copy.
• If your business differentiation is based on your product, you're thinking in the short term.

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Emanuel Westdorp is Brand Strategist and Founder of Naoz, a branding and strategy company that is transforming brands that drive business growth.