Menu

The benefits of prioritizing customer retention over revenues

Horace Dediu has a characteristically astute analysis of Apple’s business model in Priorities in a time of plenty. The part I’m particularly interested in is where he discusses how Apple prioritizes their product roadmap:

Conventionally, product development is filtered through a sieve of metrics, market sizing and impact on top/bottom income lines. These “financial” measures of success are considered prudent and optimized for return on equity (also known as the maximization of shareholder returns).

But this can be a toxic formula. The financial optimization algorithm always prioritizes the known over the unknown since the known can be measured and is assigned a quantum of value while the unknown is “discounted” with a steep hurdle rate, and assigned a near zero net present value. Thus the financial algorithm leads to promoting efficiency at the expense of creation. Efficiency may be the right priority when times are difficult and resources are scarce but creativity is the right priority in a time of plenty. And abundance is what being big is all about.

The difficulty is that creativity is hard to quantify, and therefore hard to measure, and therefore hard to prioritize—particularly in large enterprises. Horace speculates that “the creation and preservation of customers” is Apple’s primary focus (above revenues), which changes the way they prioritize:

Seen this way each centralized resource allocation question can be assumed to be prefaced with “In order to create/preserve customers should we…?”

This leads to answers quite different from questions that start with “In order to sell/profit more should we…?”

Much to digest here, particularly around the role of managers to identify the right balance for prioritization, and the right metrics to measure if your primary goal is, in fact, “the creation and preservation of customers”.

The rise of inclusive design

Cliff Kuang wrote an excellent article on Microsoft’s push for more inclusive design. From Microsoft’s Radical Bet On A New Type Of Design Thinking:

Dubbed inclusive design, it begins with studying overlooked communities, ranging from dyslexics to the deaf. By learning about how they adapt to their world, the hope is that you can actually build better new products for everyone else.

What’s more, by finding more analogues between tribes of people outside the mainstream and situations that we’ve all found ourselves in, you can come up with all kinds of new products. The big idea is that in order to build machines that adapt to humans better, there needs to be a more robust process for watching how humans adapt to each other, and to their world. “The point isn’t to solve for a problem,” such as typing when you’re blind, said Holmes. “We’re flipping it.” They are finding the expertise and ingenuity that arises naturally, when people are forced to live a life differently from most.

This is similar to the points I tried to make in Beyoncé, Coldplay, and the myth of the “average” user. The advantages of having more diversity in our design and development processes go far beyond the moral rightness of it. We end up with better products that serve a much wider cross-section of a population.

Quote: Tomer Sharon on the importance of understanding a problem

The question “How do people currently solve a problem?” is critical, because deeply understanding a problem can go a long way toward solving it with a product, feature, or service. Falling in love with a problem happens through observing it happen in a relevant context, where the problem is occurring to people in your target audience.

—Tomer Sharon, Validating Product Ideas

Resilience is not just about luck

Maria Konnikova digs into the research on How People Learn to Become Resilient:

[Developmental psychologist Emmy Werner] found that several elements predicted resilience. Some elements had to do with luck: a resilient child might have a strong bond with a supportive caregiver, parent, teacher, or other mentor-like figure. But another, quite large set of elements was psychological, and had to do with how the children responded to the environment. From a young age, resilient children tended to “meet the world on their own terms.” They were autonomous and independent, would seek out new experiences, and had a “positive social orientation.” “Though not especially gifted, these children used whatever skills they had effectively,” Werner wrote. Perhaps most importantly, the resilient children had what psychologists call an “internal locus of control”: they believed that they, and not their circumstances, affected their achievements. The resilient children saw themselves as the orchestrators of their own fates. In fact, on a scale that measured locus of control, they scored more than two standard deviations away from the standardization group.

The problem with #blessed

Kate Bowler’s Death, the Prosperity Gospel and Me is the best thing I’ve read this year so far. It’s funny, sharp, and deeply moving. Kate recently got cancer, some time after writing an academic book on the prosperity theology phenomenon in many American churches. Prosperity theology—the idea that “good” faith in God can make you rich and keep you healthy—is an immensely damaging philosophy, and Kate addresses this with poise and clarity.

I hesitate to quote anything from the essay because you really should read the whole thing, but one of my favorite paragraphs deals with the recent rise of the #blessed hashtag:

Over the last 10 years, “being blessed” has become a full-fledged American phenomenon. Drivers can choose between the standard, mass-produced “Jesus Is Lord” novelty license plate or “Blessed” for $16.99 in a tasteful aluminum. When an “America’s Next Top Model” star took off his shirt, audiences saw it tattooed above his bulging pectorals. When Americans boast on Twitter about how well they’re doing on Thanksgiving, #blessed is the standard hashtag. It is the humble brag of the stars. #Blessed is the only caption suitable for viral images of alpine vacations and family yachting in barely there bikinis. It says: “I totally get it. I am down-to-earth enough to know that this is crazy.” But it also says: “God gave this to me. [Adorable shrug]. Don’t blame me, I’m blessed.”

I am thankful for people like Kate who, instead of saying “Everything happens for a reason,” says “Life is really hard—and yet, I still believe.”

Why movies are scarier than they used to be

Patricia Pisters explores why horror movies are much scarier than they used to be in her essay Neurothriller:

Consciously or unconsciously, contemporary filmmakers not only tap into increased knowledge about the brain offered by neuroscientific experiments, but their films also stimulate the neural senses of emotions without the detour of narrative. […]

But the difference between the classic thriller and the neurothriller is not simply the difference between a narrative-driven plot and a character-driven plot. It is not necessary, and often not possible, to identify or engage with the character at the beginning of a neurothriller at all. In contemporary cinema, we are often denied an establishing shot or introductory scenes situating the character in a narrative context. Thrown in the middle of a confusing situation, we first connect on the immediate primal level, expressed through cinematography’s aesthetic stand-in for the emotional mind: close-ups, grainy images, colours, sounds can all have direct impact without being connected to either a story or a person. The neurothriller has ‘embodied’ the emotion of the film, just as the human body embodies the emotion of the mind.

The ethics of “empowering” users

Katherine Benjamin wrote a fantastic essay on designing for user empowerment, and what that really means. She asks, specifically in the context of digital health, When are we empowering users, and when are we just being lazy?

The World Bank talks about empowerment in terms of two things. Firstly, they talk about enhancing an individual’s capacity to make choices. They then talk about leveraging those choices into desired actions or outcomes. […]

When we think about things like wearable devices that enable people to actualise the “quantified-self”, we are usually realising just the ability of someone to self-monitor. In other words, we can make it possible for people to take better care of themselves by developing new technologies that support self-care. However, these innovations will only help those who are genuinely interested in taking greater control of their health. This type of self-determination with regard to health is a necessary pre-condition for successful adoption of digital health solutions.

Unfortunately, all too often, in the digital health industry, we get lazy and speak as though technology itself can create that individual level of empowerment. This fails to consider the inherent power dynamics between providers and users of health services, and the role this dynamic plays in facilitating agency among the users of health services.

When we design to empower users we can’t just think about giving people the information they need to act. We also need to help them develop the desire to act on that information.

The power of a secret in the age of over-sharing

When everything about your life is out in the open, there is power in keeping some of it secret. The ironic side-effect of social media is that it makes it easier to hide. When people think that you share everything, they don’t expect you to keep anything secret.

I recently went on a brief trip to South Africa to visit family, and I stayed (mostly) off social media. It felt weird—I felt this strange guilt, like I was “hiding” something because so many of my friends didn’t even know I was in the country. I know it was the right thing to do considering the circumstances of my visit, but still. Our minds can be deceptively cruel to us.

Anyway, I started thinking about it because Jim Farber explores this from a celebrity standpoint in his really interesting article The New Celebrity Power Move: Keeping Secrets:

Meanwhile, the stars get to both circumvent the media and to float an image of utter transparency through their promiscuous use of social media. In fact, that may only obscure them further. “Digital media creates this notion that we can know everything,” [Kathleen Feeley, co-editor of a scholarly study of celebrity gossip] said. “But it’s still a performance. It just creates a false intimacy.”

The audience’s belief in social media as the most direct route to a star exacerbates “the expectation that everyone will tell everything,” said Daniel Herwitz, a professor at the University of Michigan who wrote “The Star as Icon.” “Against all that, it becomes totally extraordinary when somebody doesn’t tell. On one hand, the public is in awe of the fact that the star, for the moment, resisted the system. But they’re also disappointed, as if somebody let them down. ‘Why didn’t I know this? The media dropped the ball!’”

“Why didn’t I know this”, also known as Why wasn’t I consulted?

More

  1. 1
  2. ...
  3. 65
  4. 66
  5. 67
  6. 68
  7. 69
  8. ...
  9. 202