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I've heard the same argument stated as 'must be 3x better' before, but it feels overly simplified. I think how much better you need to be depends on:

- How painful the status quo is for the market; do existing solutions have a perception of being 'good enough' or are folks screaming for something better? (People feel Google is good enough: a -ve for MS.)

- What are the switching costs? (Switching between search engines is relatively easy: a +ve for MS.)

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Obviously, any pithy observation is by necessity overly simplified :) However, there's a lot more truth to it than otherwise. E.g, your first point, the painful status quo. My previous company addressed the job search market, in which most people are very unhappy with the status quo solutions; and our particular solution, I feel, was about 40-70% better than existing ones (and also a new paradigm), nonetheless, people weren't really readily jumping ship. With search engines (including a vertical one, like ours) evaluating comparative quality is actually pretty hard, which washes away a bit the easy switching cost (I don't mean expert comparisons; I mean average user looking at average queries).

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