Innovation by reduction of inconvenience

I was just thinking to myself …one of the biggest success factors of twitter is it’s quality of being an IM tool minus courtesy to respond.

This led me to thinking: right, if twitter innovated out of IM (not replaced it) simply by taking that certain bit of inconvenience out of it, than could we apply this formula of

NEW GOOD PRODUCT = ALREADY GOOD PRODUCT minus that_little_troubling_bit.

At the end of the day, that’s the basic premise of re-innovating existing things. You either add new and new features (good if you’re Microsoft and release another more bloated version of Office 2011 and your customer base don’t care enough to bother switching) or you take something that’s already there, is quite popular and remove bits that people hate or would do without.

Following my line of thinking, you could say that…

• IM = email – not knowing if the recipient is available – all unnecessary fields (ie topic) – formal tone
• webmail = just email – having to respond at your computer
• last fm = itunes – having to own (be in possession of any music files
• googledocs = MsOffice – featuritis (software cellulitis) – having to work from the same computer
• podcast = radio – noise – push

As I look around myself, it’s fairly evident we have some candidates for a major product / functionality shake-ups, done in exactly this fashion. Look at these guys for example:

• calendar (minus what?…)
• browser (minus what?…)
• e-commerce site (minus what?…)
• price comparison engine (minus what?…)
• social network (minus what?…)

Filed under: (in English), UEX & UI, business & strategy

Black Swan Theory and what Nasza-Klasa (NK) taught me about mainstream.

Just the other day I took part in the 3camp.pl event where I gave a quick heads-up on pstro.pl. Other presenter on that night was Dominik Kaznowski from Nasza-Klasa, who kicked off by announcing that NK success is an obvious case of a black swan theory in action. At first I was skeptical, but with days passing and grey cells evaporating his thesis started to sink in. So just to recap, if you’re not familiar with the theory, Nassim Taleb used the term Black Swan to describe a very rare and hard to predict event.

What phenomena could we attribute a BlackSwan sticker to:

1. Event has appeared by complete surprise.
2. Event has a major impact.
3. Event, after it has appeared, is ‘explained’ by human hindsight.

(definition by wikipedia)

Following this lead, we could say indeed that the phenomenon of Nasza-Klasa was an exemplary Black Swan.

#1. Notwithstanding incumbent, well-funded social networks in Poland, who tinkered with building their communities around classes/schools way beforeNK time, it was the new kid on the block – NK who had a break in the classmates category

#2. You won’t find a person in Poland who doesn’t know Nasza-Klasa. Just the fact that an online product built so much awareness outside of its Internet-savvy focus audience is clearly astounding. I know people who have active NK accounts and are not capable of starting a computer, let alone, typing or using a mouse. Show me any other web product so magnetic that mums ask daughters to set them up with user accounts.

#3. Daaaahh!. Haven’t we all had exactly same idea for an Internet service just before they launched? It seems so obvious from where we are today.

Now. By definition, Black Swan is something you don’t over-analyze, draw conclusions for future or try to smoke out black-swans-to-be, as they’re only meant the be the simple episodes of randomness. Hence I put the theory aside for a second and focus on #2 – the major impact on the mainstream audience.

Nasza-Klasa is the first major online product in Poland* (excluding portals that are merely a reincarnation of traditional media) that apart from being a regular hang-out for Internet kids, also taps into that mass audience of non-geek population, 50+ of mums and dads, semi-computer savvy teenagers and other non-obvious Internet users. This is their biggest strength. They’re for all and don’t try to be otherwise.

NK is the first web product in Poland that doesn’t replace or improves traditional products, but adds value where nothing else existed before. What do I mean. My dad or my friend’s mum isn’t inclined to switching to online collaboration tools (IM, email, skype, twitter), consume online media (blogs, portals, podcasts), because those only upgrade functionalities of existing products / mediums (telephone, conversation, tv, radio, press) which they got used to and are very comfortable with.

Difference with NK is that they furnished us with the value that wasn’t available anywhere else. So, population of you, me, our mums and dads and hordes of slow Internet adopters were sort of forced to jump on the NK bandwagon, if their need for 24/7-global-socializing, perving on childhood sweat-hearts, sneak-peeking their friends photos, and last but not least, building their self-image by comparison to others, was ever to be satisfied. The rest was history.

Staying with Black Swan theory, what other web apps could we expect that, above-all-else, will be eagerly received by the broad-base of Polish Internet users:

• opinions, reviews, advisory sites (check out pstro.pl for example)
• recommendation engines & collaborative / behavioral filtering stuff (show me things I will like, check-out szufler.pl for example)
• uncomplicated (unlike-GTD) simple productivity tools / frameworks – online calendars? seeing availability of your dentist before making that call?
• vertical social tools/portals for specific interest groups – ie. amateur musical instrument players

What I think Nasza-Klasa needs to do to maintain it’s growth trajectory:

• mobile (bring it to the masses, bring it to the Malls/Galerias
• open API and allow creating third party apps
• more functionalities with images please (apparently this is what people use NK mostly for these days, Fotka for the masses)
• change name (surely it’s passed their care factor by now) or create an alternative domain name in preparation for separation from the classmates core (www.nk.pl?)
• now that they’ve captured the slow-adopters, give them access to collaboration tools (NK email account, NK IM etc)

Concluding my random thoughts on NK, here’s a short list of things Nasza-Klasa taught me about web products for the mainstream market:

1. Give them something they don’t have anywhere else. Not an online substitute. Not an upgrade. Just fill a brand new need. A need they never before thought they could afford to fill.
2. Let your users feed their egos. Let them bask in the light of glory and fulfillment shinning from their profile photos of exotic trips, scuba dives, car racing tournaments.
3. People (in Poland especially) are obsessed with monitoring their self-image and comparing themselves to others. Enters Personal PR.
4. If you believe brand names (domain names) matter or if you believe they don’t, you’re right in both cases.
5. As long as you do all of the above you don’t need to be obsessed with design and usability (just open nasza-klasa.pl, you’ll see what I mean)
6. Lean startups lead by energetic, passionate teams can win with cash-obese incumbent players (ie. grono, fotka)

* all right, all right. Maybe second, right after price comparison sites like nokaut or ceneo.

Filed under: (in English), business & strategy , nasza-klasa, online product, strategy

Seth made me write this!

I’m pretty late with stuff, and so I was while reading Seth Godin’s Small is a New Big. I’ve come across a line there that is a quintessence of what’s been building in my head for the last 5 years. On page 100 he boldly proclaims “functionality is a new marketing”. Godin hits the nail on the head. After years of being brainwashed by 4P die-hards, push marketers and advocates of ATL it suddenly came to me that product is …KING (well… some say it’s content …they’re almost right).

Back in old days, you needed to have a fat comms budget, and could get away with flogging crap products to folks. These days don’t bother spending your millions if your product sucks. Push gives in, in favour of pull. It never stops amazing me that some companies spend millions on mass marketing bringing the traffic, only to see the conversion decrease, as they undervalue their product. I suppose it’s easy to explain. Mass marketing is easy. Give a budget to your agency and off they go to bring your traffic. You make the bad ad. Bad luck, take it off the next day and try something else. Product work is hard. You need to find out what you need/lack, research it, check your competitors, spec it, build it, test it, build it, test it, rebuild it, test some more and so it goes. It takes time and money. You need to fight with attitudes & personal habits of senior managers who happen to use the product in their own way, with IT who think you’re crazy, deal with competitors who constantly benchmark each other and raise the bar. With marketing it’s just you and your agency to come up with a new concept, low entry cost, low exit cost. Product is opposite. High entry & exit costs. 48 stakeholders, each one with vested interest in your product, each one wanting your product to be their own vehicle. And it’s not that easy to get out of bad online products either. Once you build bad functionality, too much functionality, misplaced functionality, redundant functionality, it’s damn hard to get rid of it. You just end up saying: users don’t get it. They’re not ready for it. We’ve pushed the envelop too far. But did we? All in all. Product work is way too difficult. So what we do? Spend cash on marketing instead. Users use mediocre products, cause they don’t know any better, marketing is happy cause the traffic is flowing in. Corporate status quo maintained. I’m harsh I know. Not all companies are like it, but far too many behave like that and lack guts to do good products. I hope this will change. Why?

If 4P model holds any validity for the online world. The product P is a massive giant P monster and all other ps are its little servants. If I was to draw a pyramid, at the bottom of it, you’d find all biz support functions, like finance, accounting, IT, and at the top Marketing, with the sharp tip of it being the product. If I threw this pyramid into the water it would be your classic iceberg, with all support functions sitting below the water level (effectively invisible to the customer) and with marketing and product boldly sticking out of the water. I reckon, last couple of years saw the icebergs sink deeper, moving the marketing part below the water level, rendering it virtually invisible to the user with only a sharp tips of products communicating uniqueness of each offer in the marketplace. I think this shift has profound consequences on the marketing industry. More resources should be pumped up the pyramid, to make the product shine, to let people notice it without having to yell out how good you are. Cause if we all yell out, noone can hear you anyway. Why bother yelling, go ask your user what they think about your product and make it better.

So what do I mean by Product? Product = Brand, why?. Brand = User expectations + User experience. User experience is emotions invoked while interacting with your product. It’s not just the object they came to pick up, but how they came, how they entered, how they heard about you, did they smile while using it for the first time etc. Not just the obvious touchpoints, but all the micro-moments when your product flashed through their synapses. Product person should be as much Freud as he is a Frank Lloyd Wright.

Here’s my checklist of what constitutes a good product & user experience?

• Solve a problem. Your product has to solve a problem or fulfil a need. If yours doesn’t, get back to the drawing board.
• Focus. Best if your product does one thing only, but does it very well. Don’t expose features that will be used by 5% of your audience. Recently I’ve been toying with this MindMap manager app. Boy it has a featuritis. I bet, if they tested it, they’d find 80% of stuff there never got to be used by anyone after the QA person touched it last time.
• Design. Your product has to be elegant and classy. Honestly, there’s plenty of awesome products, with horrendous look & feel. Just look at ryanair.com. Doing design doesn’t make you gay. Design is not reserved for fashion or FMCG. You should equally invest in design if you’re making sewerage systems, nails or sell legal consulting.
• Simplify. Your product has to be simple to grasp. If you need a user manual to use the product, no one is going to bother. These days you don’t read manuals, faqs, labels, tooltips. Think of a hammer, screwdriver, pen, google, Mac OS X. You don’t need a manual.
• Watch your customer use your product. You have to talk to your customers, get to know them, become their friend, involve them in creating, finetuning, enhancing your product. Rather then sending 10000 Xmas cards to your user base, spend this budget on rewarding your 5 heavy users for opening their front door and letting you come and see them at home, yes – at home, see your products being used in real life environment.
• Be a usability freak. Your product has to be ergonomic. Usability is a foundation. Employ standards, test usability regularly, identify show-stoppers, implement users’ suggestions. Easier said than done, but incredibly rewarding. Have low conversion? Check your usability first.
• Use your own product. You have to use the product yourself and make your staff use your stuff. Engage your staff ASAP, let them be beta testers, give them discounts, better – give it away for free (unless you’re Mercedes, then call me). Ask them for feedback and reward for good suggestions.
• Staple yourself to your product. Identify touch-points between customer and your business & product. Surely, touch points pop up way before the customer uses your product for the first time. It might be at a party when a friend drops a story about your product. It will be when your client walks inside and asks for a brochure. And it will be after they used it trashed it and went to a competitor. Each of these moments is worth having a good look at. Each of them is an opportunity to communicate a value, inspire, gratify. Once you identify the touch point…
• Measure it. Measure your product, measure your user, measure all touch-points. Seriously, how many companies measure every inch of their factory floor, operations, call-centres, TQM and reengineer the bottom of the iceberg, not knowing basic statistical info about the product or the user. One of the reasons I love web so much, is because it’s so measurable. Just take Omniture, mix it up with Hitwise, add Legenhit (just for Poland I think) sprinkle with your logs and you’ll figure out a shoe size and a wife’s name of the customer who at 4:13am GMT clicked your “book” button. Almost!. But you wait.
  I laugh each time Windows asks me if I want to send a bug report after an app crash on me. Why bother asking. Websites don’t. Don’t ask and log it to improve your product.
• Make it sexy. Your product has to be sexy for the user you’re trying to reach. I know, this is so vague. What is sexy? Sexy is new, sexy is cool, sexy is contentious, sexy is funny, sexy is in, sexy is stylish, sexy is relevant, sexy is viral, sexy is magnetic. If your product is sexy to at least one segment of the society, you’re onto something. If your product isn’t sexy for anyone, you better go back and rethink some elements. Sexy is the final output. It’s a combination of price, packaging, design, UX, emotions, problems solved, satisfaction, promises, brand, self-actualization… (stick another 50 marketing jargon words). That’s what sexy.
• Serve emotions with your functionality. I don’t think customers buy your product only to get their problems sorted out. They also buy it to become someone, to be recognized, to belong to a group, to be associated with a trend, to stand out. Because they believe, agree, hate, respect, admire. Aspirational products are functionality bundled with personality. Does your product have personality?

This list is probably not complete and we could all add couple of points there, but if you manage to tick 80% of it, go suck your marketers and with the money saved, take a long holiday. When you get back, your business will rock!

Filed under: (in English), UEX & UI, business & strategy, marketing

Economy Class and what went wrong with Customer Service?

Couple of thoughts on quality of customer service, that flashed through my brain while waiting for a Qantas stewardess after pressing the “call attendant” button, only to see her rock up 10 minutes later, turn off the little light over my seat, don’t ask a word and briskly return to her chit-chat with a fellow stewardess. “Bottle of wate… never mind!”

So, what went wrong with customer service?

• Market integration. Most oligopolies or otherwise big corporations that service you every day (telcos, retailers, Travel companies, banks, etc) don’t pay much attention to customer retention. They are too busy reengineering every quarter, and it just turns out that their customer is far less important than the shareholder. They maximize the customer value for today, and don’t plant the seed for future customer satisfaction. Why bother anyway, if you might yourself end up being swallowed by a bigger fish. And the corporation that takes you over cares only how much you milk your customers today, not if they’re likely to be back in future.
• Loyalty became a myth. Despite all the hype that loyalty marketing and CRM attracted recently. Companies acquire (organically or in bulk) customers still at a fairly low cost and therefore don’t have incentive to keep them loyal. Customers themselves hate to be tied up and are very prices sensitive. In the era of mass availability, instantaneous findability, Google, experimentation, free trials, price comparison engines and low switching costs, customers don’t need to lock themselves to a particular brand. “Let’s try the new thing”.
• Incapable technology. Good customer service is about detail and personalization. These are easy and cheap when you run a corner convenience store, but super-expensive and procedurally impossible when you run a business that spans continents (especially if that company continually acquires new entities with different CRM cultures/processes/systems). CRM technologies are still in the nursery and it will be years until technology allows us to run Wal-Mart scale operations with the corner bakery flair for customer service.
• Corporations are so keen to make a buck for their fickle shareholders, that they cut costs left right and centre, cutting human touch-points in the first instance. Proliferation of call-centres, IVRs, and other automated approaches does increase efficiency, but removes flexibility and personalization.
• Pareto style polarization. With abundance of data-mining technology and ubiquitous business intelligence allowing companies to endlessly segment down to their single biggest spender, customer bases are getting polarized into tier1 VIPs who can count on a top-notch service and the rest – plebs, waiting 20+ minutes on IVRs in India, squashed in Economy compartments or being intentionally disconnected to get their bandwidth transferred to Golden customers. There is no middle tier these days. You’re either part of the top 20% contributing 80% revenue or you will be left to your own devices, because they simply can’t afford servicing you.
• Outsourcing and Offshoring. You wouldn’t do well as a head of a global customer service department if you didn’t act on the information that your full time employee in Australia could easily be replaced by 100 headcounts in Bangalore. Nothing wrong with it, one might argue. After all, labour shifts to 3rd world countries evenly distributing wealth, costs fall, shareholders grin wider. So what’s the problem? Usually they don’t hire 100 folks in India to replace one headcount in Australia. It’s more like 1 to 1. Costs go down, efficiency and wait times? Not always.

Last minute comment: I swear not to whine about customer service in Australia ever again. Having spent almost a month in Poland now, I declare that the bottom can actually be much much lower… more about it in future posts.

Filed under: (in English), business & strategy