There is a big problem in today’s internet technologies and the companies trying to do business in it. The Internet is now the medium for pretty much everything we do. Need to sell something? Build an e-commerce shop. Need to market something? Buy online ads. Need to manage operations? Subscribe to a SaaS. The problem is, many of these services (and the overall Internet) area suffering from issues with handling the signal-to-noise ratio.
If you’re not familiar with the signal-to-noise ratio, here is the easiest way to describe it. Imagine you are at a restaurant siting at dinner with one other person. There are hundreds of people around you eating and conversing. Your mind is making various “micro” choices on what to pay attention to. Imagine you’re following a conversation attentively with your friend. The following scenarios happen:
Someone comes over the loud speaker and announces that it’s someone’s birthday.
Your waiter comes up to ask you what you want to eat.
The person behind you is talking about your favorite new television show.
How does your mind decide what to pay attention to? Do you ignore the birthday celebration because you’re more interested in the conversation? Is your conversation so boring that the discussion about the television show is becoming much more interesting? What if you’re not hungry and simply ignoring the waiter would much easier than having to break your conversation to tell them you’re not ready yet.
Your mind is constantly managing the signal-to-noise ratio, so that only the most important information (or signals) gets fed to it. In some cases you want noise to become a signal; for example, you may hate getting the feedback form unless of course you had a bad dining experience. In other cases you want noise to stay noise and never become a signal; for example, you don’t want to hear any other conversation in the restaurant. This is the battle your mind is constantly fighting and it’s easily exploitable. Hence why good marketing is so powerful.
Way too often I see new companies popping up with claims they’ve solved the signal-to-noise ratio problem. They don’t explicitly claim it, but rather make claims like “easier to use” or “be more productive” than the competition. Especially when services/products have gained the network effect (Facebook, G+, Twitter, etc), the signal-to-noise becomes extremely problematic. For example, many people are now finding Twitter to just be a spam haven. Two things normally happen:
The product/service is usually easier to use because early evangelists are more motivated to do human work, thus creating an efficient signal-to-noise
The product/service is limited in capacity and therefore much easier to use. Thus causing less attention drift.
Here’s the problem now. These two events do not scale well. As I’ve pointed out before in the cyclical nature of the hammer industry, when these business models try to scale these events to reach the masses, they tend to open themselves up to competition. Once the human work becomes less interesting, the quality of the output of the hammer will stay consistent. There are very few technical systems that can eliminate this, and inevitably we must rely on socio-technical system to solve this. Unless AI and machine learning begin to mature, I don’t see this changing anytime soon.
Isn’t this fascinating? Technology is much more human than we think.
Note- When I say software, it’s understood I mean SaaS as well.
Awhile back someone sent me a link to a video clip of a Mad Men episode. It’s a scene in which Donny Draper is pitching the Kodak Carousel. If you notice in his pitch he rarely mentions what the product is or what it does, but rather tells a story about an experience he has. It’s easily one of the most powerful and possibly eery television scenes I’ve ever watched. Take a look for yourself:
I’ve worked in both the B2C and B2B market in software and this story resonates very well for me. Why? Because it’s interesting to understand why both Companies and Individuals chose to buy software and I think it comes down to one prime thing: individual user experience. Let’s break it down:
Consumer – It’s no secret that in today’s B2C software market that user experiences always win out. It’s the reason Facebook, Twitter, Apple, and Google are all winning. Their offerings mainly rank high in the following areas: How easy is the product to use? How easy is it to interact with friends? How much enjoyment do I receive from the product/service?
Businesses – There are generally two buyers of business software – CIOs and Line of Business heads. In the case of the CIO, enterprise software is largely completed by the shake of a hand. If you ask anyone experienced enough in enterprise software sales they will tell you that CIOs buy enterprise software because (1) they like the person selling it to them and (2) they don’t want to get fired. The offerings from business software vendors rank highly in the following areas: How easy is it to keep my job? How easy is it to find people to implement and support the software? How easy is it to pass blame to service provider? How much enjoyment did I get out of the sales process? You may have noticed I mentioned nothing about the user experience of the people who will actually use the software! This is important, because this is largely the reason many end users complain about enterprise software. This won’t change until the CIO reports to it’s end users and not to a CFO/CEO/Board. For Line of Business heads, it is slightly different, because they do have direct interaction with their end users. They software they tend to purchase is more user friendly, but still has a good personal experience for them. Their offerings mainly rank high in the following areas: How easy is it for my team to use the software? How easy it is for me implement the software? How easy was it to purchase the software? How easy is it to prove to my management that the software is working?
“You didn’t buy it, your boss did…How did they sell this crap? Steak and strippers baby!”
There’s lots of ways software vendors answer these questions. For example, their software has features such as scalability, premium support, longevity of vendor’s establishment, references, etc. I’ll get more into this in detail in an upcoming blog post about how start-ups work in the enterprise area.
The two things every human is terrible at: Planning and Explaining.
Planning – Human beings are awful at planning. Seriously awful. I always find it interesting that financial services companies go out and say “We will help you plan your financial future” and then in fine print at the bottom is “Past Performance Does Not Guarantee Future Results”. I hate to pick on the financial services industry but it’s just an easy example that everyone can relate to. In my field of work (enterprise software implementation and development) planning is everything. Yet, organizations still to this day believe they can accurately plan everything. On top of this, they believe that there is some expert voodoo that only certain companies, and certain people, posses the ability to execute on. I’ve been involved in so many implementation projects over the past 6 years, that it’s extremely rare to see a project that goes on schedule, at cost, and without scope adjustment. (sidenote- this is considered the triad of constraints). This is largely why the agile methodology was created. We are flawed because we can’t predict the future, and no one should be to blame but our human nature.
Explaining – Human beings have the hardest time explain how things work. I, for one, am largely guilty of this. Thus why I tried to spend as much time as I can practicing. Why do you think there is so much confusion about latest economic crisis, or recently about how SOPA/PIPA will affect the internet? It’s because humans have an absolute awful time explain precisely how things work. I find that even those who are gifted enough to articule information correctly often use their means to articulate information that is incentive base (i.e. a congressman who says why we should believe the SOPA/PIPA act will help us all).
Have you ever noticed what financial services or consulting services ads are really saying? After they state “Plan for your future with our services” they’ll go on to say “Talk to one of our specialists, who can explain to you how to get your feet on the ground”. Seriously? You’re going to tell me that every employee that you interface me with is going to have the know how to explain how my future will unfold? I work in one of these fields and it amazes me how wrong this is.
What are some ways around this that I’ve found effective?
1. Setting expectations correctly – I normally tell people the confidence I feel about hitting potential dates and not whether I plan to actually hit them or not. This saves me from the conversation that will happen: “But you told me this solution would be available on this date!”
2. Keep it simple – Explanations work best when they are short and concise. Let your audience asks questions. All of my conversations start by asking what the audience wants to hear and understand first.
Two years ago when I moved to NYC I was able to find my NYC roommate randomly through a Craigslist roommate search. My only reasoning to give him a chance was because his craigslist posting basically said “Guy from Cincinnati looking for roommate” and nothing more. Personally I found it much more interesting than half of the other typical posts that state “I’m clean, responsible, quiet, etc”. Anyway, he ended up being a great guy to live with. Interestingly, his father is the Chief Creative Officer at Proctor & Gamble. I would consider both he and his father to be what we call “certifiable geniuses”. Many of the things he spoke about in day to day conversation resonated that of his fathers profession. One of the things that his father, and arguable himself, fixate their work and lives around is understanding why people (and particularly businesses) do things. This is commonly known as the field of Cognitive Science and I believe it’s ripe for growth. To understand what Craig Wynett believes there is a short interview on YouTube which I think is worth watching:
I believe the large takeaway is that he states that most people see creativity today as alchemy and not chemistry. In that for some reason we tend to see the quality of creativity as something that is naturally bestowed upon certain individuals. To portray this point he uses the example of the pilot: “Can you imagine the pilot that comes on the loud speaker and says ‘Welcome everyone, I’m Captain Wynett and I’m the most creative pilot we have’. People would be reaching for there bags almost immediately.”
Why do I think this is important to business? First, whether you are in B2C or B2B, at the end of the day, we are all human beings working together in institutions to service other human beings. Second, I believe the success of a business largely relies on understanding on how this interaction works. Interestingly, I think this goes for every department of the firm and is never limited to just what we consider “creative” departments. Craig talks about this and explains how his role at P&G is not only to just serve the marketing department, but also sales and manufacturing. If we extrapolate this, let’s look at some other very large scale examples:
1. Coca-Cola – Coke is actually just a huge marketing department. If you look at their marketing expenditure they spend nearly $2.9 billion a year (more than Microsoft and Apple combined) . In reality Coke doesn’t sell bottles of liquid, it sells happiness, and it’s marketing department is largely responsible for its current success. If you’ve ever seen a Coke ad you’ll notice it rarely talks about the taste of the actual physical product it sells (which is hard to objectify anyway). Rather it shows people being happy. So really, Coke doesn’t sell soda, it sells happiness. The cognitive science behind this is that Coke has properly understood what it’s audience wants: happiness. Do you think if Coke’s advertising only talked about the flavor of it’s soft drink they would be as big as they?
2. Toyota Production System – Largely regarded as the base for the concept of Just In-Time Production, it’s one of the most subsantial business systems created in today’s world. Guess what? It’s not a technical system, its a socio-technical system, which means it’s not just a set of instructions or business processes for manufacturing but a set of standard for how people interact with other. Most of what is considered “lean” or “agile” is a result of the success of the birth of the Toyota Production System. It’s important to understand why this is successful. If you analyze the main points of the TPS you would realize that a majority of the system is in line with Daniel Pink’s theory on motivation: that people seek Mastery, Autonomy and Purpose.
I think the larger question here is: Is it possible to create a either a department or company who’s total focus is understanding the behavior of the people that interact with the company? I personally believe it is possible and many of today’s UX teams or companies are doing just that. Businesses today understand that it is all about building good user experiences. There are loads of examples such as Coca-Cola, BMW, Twitter, Apple, Toyota, Starbucks and many more. If we can scientifically understand what good user experiences are, then we will end up winning. I believe this is the future of business.
I was recently dubbed a “hyper-organized” person by one of my superiors at work. Initially I didn’t know how to take that? Compliment? Insult? I guess it’s not such a bad thing to be hyper organized, right? Isn’t that every employers dream? Reflecting back, I do actually take it as a compliment. The problem I’m having now is that I’m constantly trying to manage EVERYTHING in my life. All the way down to the queue that I constantly build up in my “Words with Friends” app. It’s currently at 6 and I freak out if I fall asleep at night and don’t clear that queue out. Is this a cause of gamification? I’ve recently reflected on this and realized that I currently own a large range of software stacks that are all “supposed” to make my life better. However, the more and more things I need to manage, the more I think it’s driving me crazy.
Some of the things I do to say hyper organized usually involves a long list of pieces of technology. First my setup is a MacBook Pro which runs Max OS X SL and a VM containing Win7. Here are the technologies I utilize:
I really only run a Win7 image for Outlook, everything else Office, and SAPGui. If Google docs could preserve the formatting of Office 100%, then I’d gladly kill the Office suite. Outlook is also much better Calendar integration than iCal or Google Calendar. Until then I’m tied to Windows.
On the Mac OS X bit, I regularly use Chrome (general web browsing), Skype for IM/calls, OmniGraffle for mock-ups, Evernote for to-do (and everything else that has to do with notes), Spotify and iTunes
Now let’s talk about all of the SaaS services I use:
Dropbox – General back-up and sharing of files (pictures, etc)
Evernote – I’m anal about my to-do list and use Evernote extensively to manage my to-do list (btw – I have no idea why people use anything more than a txt file for a to-do list)
WordPress – This blog is WordPress installed on a shared host (WebFaction)
Hypem – I listen to mostly remixs on Hypem, “regular” music via Spotify (monthly fee) and iTunes (amazon mp3′s usually)
Google Apps – Use this for work and collaboration on my apartment utilities, vacation planning, etc.
Outlook Web – To manage my current project e-mail (I use the company’s e-mail)
Then let’s talk about the apps I have on my iPhone that I use to make my life easier: Dropbox, Evernote, Tumblr, and Box
Lastly there is the general communication apps I use on a daily basis: WhatsApp, Messages (built-in), E-mail, Yammer, Twitter, and Facebook
On an average day I’m managing a queue of people e-mailing me (which I generally keep to 0), phone calls/vmail (which I also always leave at 0), twitter, contracted company web Outlook, WhatsApp messages and Yammer. This is nearly a full-time job in itself. The amount of Chrome tabs I have open in a given day is extraordinary!
So what does this all mean? It requires an unreal amount of task-switching. I feel like I have to manage 100 different queues and they all need to be as close to zero as possible at any given point. Which leads me to believe…are all of those innovative technology products making my life any easier? Or am I in a constant state of technology hell? The problem is I realize what every single one of these services means to me and how important they are. So I’m not really willing to ditch any of them. For example, I don’t check Facebook as much as I used to but I realize that it’s important for me to have a presence there. I otherwise I may lose touch with a core set of friends and family which happen to live all over the world (Australia, UK, Germany, Sweden, California, Illinois, New York, etc).
I realize now why people don’t respond to e-mails right away anymore…because we’ve found 100 million ways to replace e-mail, because apparently e-mail wasn’t good enough.