A Blog by Jonathan Low

 

May 20, 2016

Why We're All Selling Experiences

For most of economic history, people sold stuff: tangible goods that could be seen and felt and weighed.

Sometime in the past 30 or 40 years that shifted to services, as it has in most developed economies, even, increasingly, in China.

But even within services, the growth in value has come more and more from intangibles like algorithms, software, design, consulting, marketing campaigns, legal advice and now, as the following article explains, from experiences.

Because even within the realm of intangibles, differentiating between the billion-plus apps in the App Store, requires 'assets' whose value is dependent on a visceral, emotional reaction since the underlying technology has become so fast, reliable and convenient. We want to share these experiences and build them into our brands and our lives. The challenge is going to be capturing those experiences in ways that allow us to identify, manage, sell, measure and monetize them. Optimally. JL

Mikael Cho reports in Medium:

Over 16 million websites are added to the web a day.Over 1,000 mobile apps are submitted to the app store a week.As more software gets built, design is becoming increasingly important for your product to stand out. The product’s design must create an experience. That’s what will differentiate you. To get more people using your product is to make your product easier to use.We think doing more is what will create impact. But doing less (is) much more significant.
Design is more important now than it ever has been, according to Medium and Twitter founder Ev Williams.
As technology evolves, core infrastructure becomes a commodity and how you differentiate your product moves from delivering features that are good enough to get the job done, to delivering an experience while getting the job done.
To illustrate this perspective, here’s a graphic from a Harvard Business Review article written by two product experience consultants, Joseph Pine II and James Gilmore:


Over 16 million websites are added to the web a day.
Over 1,000 mobile apps are submitted to the app store a week.
(And these are 2015 numbers!)
As more and more software gets built, design is becoming increasingly important for your product to stand out. The right features mixed with your product’s design must create an experience. That’s what will differentiate you.
Thus far, at Crew, our external marketing projects have been a core contributor to our growth.
But external marketing cannot be the only driver of growth. Our product must also propel growth to substantially impact our business long-term.
And if substantial growth is going to come from a product, the product must be much better than any alternative option.
In his book, Hooked: How to Build Habit-Forming Products, author Nir Eyal, writes,
“Many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.” So when you release a new product for consumers, you have to be at least nine times better than the previous alternatives in order to have a chance to get users switching from the old product they were using to your product.”
For your product to get the attention of your customers, it can’t just be a little better than the current alternatives.
It must be substantially better.
An order of magnitude better.

Attention is the reward of simplicity

In his book on building habit-forming products, Nir also shared a perspective on how to think about building products people want to use. It’s called theFogg Behavioral Model and was created by Stanford computer scientist, B. J. Fogg:


The Fogg Behavior Model illustrates that the best path to get more people using your product is to make your product easier to use.
If you make your product simpler, you increase the probability of your customers crossing the “Activation Threshold” and performing the behavior.
Nir notes,
“Influencing behaviour by reducing the effort required to perform an action is more effective than increasing someone’s desire to do it. Make your product so simple that users already know how to use it, and you’ve got a winner.”
In our case, we knew that we needed to make our own product simpler. Simpler to start. Simpler to stay.
So often we think doing more is what will create impact. But often it’s doing less that’s much more signficant.

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