"They are obsessed with the quality of the product/experience"
Maybe "competitive advantage" is not so directly addressed, but I feel some of the other points touch on it, like "do things that don't scale".
And "obsessed with the quality of the product/experience" is BS wording. It means nothing. I could say the same thing about any subject without making any distinctive point. It's not about being "obsessed", it's about "making the right choices in terms of priority regarding the product/experience". That's more like it, and that says that decision/compromise is needed in everything you create.
I made the mistake in my first years. I made consultingware products which didn't grow but paid expenses and helped me keep my company alive and even grow it very slowly. Then, I dropped the non-growth products and focused on a single growing product.