This Dilbert comic was referenced on HN recently. I got a good laugh out of it and have spent enough time in a developer role to appreciate it.
But after the initial laugh, I recognized some painful similarities between the PHB's request and the situation that many startups and small businesses find themselves in. There's something to be said for first-mover-advantage but it's not a holy grail. It's been said a number of times that if you're first to market and have no competition, maybe there isn't really a market there. To some extent, the presence of competition validates the viability of your market.
So what then is a new entrant to do? Invariably you'll need to address the competition's feature matrix when you start pitching to customers. Many profitable entrepreneurs have succeeded by recognizing a need or source of intense pain within an existing industry and change the game by introducing a novel solution to that need.
But, if a client's basic needs remain unsatisfied it doesn't matter how cool your product is. Put another way, if you solve one problem while re-introducing several others you have an uphill battle to generate a significant conversion rate. Maybe you don't have to match the competition feature-for-feature, but you do need to match them need-for-need. If you don't address customer needs, good luck with your conversion rate. And in the end, a feature matrix is just one company's articulation of what it thinks those customer needs are. Maybe you disagree or maybe you have a better way, but if the same 70% of features show up over and over again amongst your competition, you'd better find a way to satisfy those needs.
So the lesson from this comic shouldn't dissuade entrepreneurs from attacking an established market. Yes, you will have to work day and night to match your competitor's features (or the core set of them that matter). But as long as you carve out sufficient time to develop your own vision in tandem, some time spent on "legacy" features can make it much easier for customers to bridge from their old solution to your invention.