21 Mar Geekonomics: When people aren't buying technology
In a WTN news item earlier this month, John Rondy was kind enough to credit me with defining “geekonomics” as the discipline of managing innovation as if users actually matter; a willingness to recognize that “better” technology can still fail, utterly, if it’s not what people want.
The word came to mind, during a discussion at this year’s Fusion CEO-CIO Symposium, on the spur of the moment: on further investigation, I wasn’t surprised to find that I’m not the first to use it. The G word was probably coined near the end of 2007, as the title of a book by David Rice that was subtitled “The Real Cost of Insecure Software“. I pay full compliments to the bright light that David shines on our collective role as “six billion crash test dummies” for an industry that has had, historically, far too little accountability — but I want the scope of geekonomics to be larger than this one issue.
I get my inspiration from Robert Heilbroner, who wrote in 1953 that economics is “the science that has sent men to the barricades.” In his introduction to his legendary book, The Worldly Philosophers, Heilbroner went on to say that “the evolution of…heretical opinions into common sense, and…exposure of common sense as superstition, constitute nothing less than the gradual construction of the architecture of contemporary life.” (Steven Levitt and Stephen Dubner have put a contemporary twist on a similar broad vision in their 2005 book Freakonomics, which ought to be required reading in all courses of either statistics or social studies.)
Heilbroner’s phrase, “the architecture of contemporary life”, is a label that could easily be applied to the Internet today. The net has become the platform for our lives, observed Nicholas Blincoe in the London newspaper The Telegraph in a book review published last month. Blincoe continued, “the story of computing is no longer the history of a machine. It is the story of a culture.” This means that success in technology markets will no longer be won by technologists: it will be won by anthropologists.
Perhaps you have to be a certain age to appreciate how much the technology scene has changed, from the sale of technology to the sale of an experience. As a teenager, I devoured magazines like Audio for their detailed technical studies of what made for great sound. I could tell you the difference between EIA, IHF, and RMS power specifications for a stereo amplifier, and I owned a 43-pound reel-to-reel tape deck whose massive cast-iron head block was a physical monument to the demands of reducing “wow and flutter” — that is, low-frequency and high-frequency components of error, respectively. Hundredths of a percent used to represent good performance on either of these measures: I’m sure that an iPod doesn’t have 0.00000% errors, but I can’t find any evidence on the Web that anyone even bothers to measure a digital player’s difference from perfection. The closest I can find is a specification for a high-end CD player that states its errors as “Below Measurement Limit (+/-0.001%)”. In a very real sense, sound technology has ceased to matter.
Likewise for the personal computer: I distinctly remember a 780-page issue of PC Magazine, back in the early 1980s, and history records that some issues even exceeded 800 pages. The U.S. Postal Service objected to the mass of all those glossy color pages burdening its carriers every month, and one joke was that “the next issue comes with installation.” Those pages were filled with advertisements for pieces of technology: memory cards, video cards, monitors and drives, all of them competing for attention based on abstruse figures of merit that required exotic equipment to measure. Today, a Dell Adamo or a MacBook Air competes for the distinctions of being thin, light, and long-lived on battery power: in short, for making its technology as nearly invisible as the world’s best technologists can manage.
As Martin Heidegger said in The Origin of the Work of Art, the proper tool is one that disappears into its function; as Alfredo Ruibal further observed, “The less one notices the tool, the better it fulfils its function as a tool.”
So, now we look at what makes a contemporary innovation succeed or fail. The iPod, as has been widely noted, was not the first MP3 player, but it quickly dominated the market because it was part of a solution that satisfied an actual user desire. People did not want an MP3 player: they wanted music of their choice, with them in a form they could easily enjoy, available at a reasonable price within moments of their wish to have it. The hardware is a necessary evil, except to the extent that we make it a fashion statement (as Apple brilliantly succeeded in doing). Even so, the iPod alone would have been merely an expensive gadget; the iPod plus iTunes was a phenomenon, as witness the fact that many people call any downloadable audio program a “podcast” regardless of the device that’s used to play it.
The challenge to technologists is to succeed in spite of themselves. You may be certain that what you have to offer is better. Resist the temptation to think that this is enough. “Better” is measured by user preference, not by a spectrum analyzer. “Cheaper” is not necessarily desirable, either: many good companies have destroyed brand equity by pursuing larger markets, at lower prices, and destroying the aspirational value of their trademarks. They failed to understand what the consumer was actually buying, with the product as merely the package for the experience. In the enterprise market, what’s wanted is not irrelevant technical superiority or unreliable economy: what’s wanted is the kind of consistent, measurable value that creates competitive advantage — in particular, by shortening time to market and reducing unpredictable and unproductive costs.
The user is not an obstacle to the success of your brilliant idea. The user is a major part of the environment in which your idea will succeed, or fail, based on its fitness for that environment.
If you want to try to change the environment, best of luck: personally, I plan to continue the pursuit of geekonomics.
Before that, he was the first manager of PC planning at The Aerospace Corporation, where he also supported space asset management applications of AI techniques; he was earlier a Senior Engineer in arctic project management, chemical facility construction, and synthetic fuels project planning for various divisions of Exxon in California, Louisiana and New Jersey. He holds an engineering degree from MIT and an MBA from Pepperdine University; he has been a faculty member in IT management at Pepperdine and also at UCLA (computer science) and Chapman College (business analytics). He is the author of two books, How to Program Java and Peter Coffee Teaches PCs.
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