Tag Archives: Fred Wilson

Simplicity: The Value of a Clear and Concise Value Proposition

Crossing the Chasm
Image by cambodia4kidsorg via Flickr

Fred Wilson has a great blog post entitled “What drives consumer adoption of new technologies?”  The post is interesting- Fred’s one line articulation of  the special sauce of ten of the most popular consumer products in recent years- but as Fred says himself, the comments are golden.  One great comment by Alexander van Eslas on “first use” sparked by attention in particular. My response is below.

Many of the comments on Fred’s post talk about “simplicity” as a necesssary characteristic for consumer adoption.  I agree, but it is important for entrepreneurs to remember that products must not only be “simple to use,” but also to “simple to understand the value of.”

The point here is the need for a clear value proposition. People are willing to invest a lot of effort into adopting a product something if the perceived value of using that product is high. Chemotherapy is a horrendous experience and doesn’t always work, but given the alternative (death) it’s a no brainer. Alternatively, if the product’s perceived value is low, the users will be considerably less forgiving. I refuse to register, verify an email, and create a profile when all i want to do is play a game of solitaire on the train for five minutes. **The relationship between perceived value and users’ willingness t overlook product shortcomings reminds me of the relationship between price elasticity and wealth.

Clearly and concisely articulating the value proposition is a real problem for many great technology platform companies*, twitter included. It’s not as if people haven’t heard of these platforms! Everyone COULD benefit from joining Facebook or using Twitter but not everyone realizes it.  The most common thing I hear from non-twitter users “why the hell would i do that?” Conversely, the main reason that people try out services such as twitter despite having no idea what they do, is that “everyone else is using it (therefore it must have value).”  The challenge for the entrepreneur is to evince their service’s value before people give up (Retention- See Dave Maclure’s Startup Metrics for Pirates).

This is where Alexander’s concept of “first use” comes up. Alex asks

“Is a user willing to put in the effort to learn about this new technology and incorporate it in his current habits?”

I bet Marketers try a lot harder to “get” Twitter than Accountants because even if they don’t initially understand it, they know it is supposedly of value to people of their ilk.  They are supposed to be using it.  Twitter is getting better at delivering value upfront by suggesting friends and auto-populating new accounts with popular tweeters but it still needs work.

Ultimately, the correlation between the value perceived and one’s willingness to overcome friction to adopt is more about people than products. This is classic Geoff Moore/technology adoption curve. Technologists find the perceive value in technology for technology’s sake. They could care less if a product  is “simple” or “easy to use” or about sharing or whatever as long as the technology it is built on is new or interesting. Early adopters find technology interesting, but only because of technology’s ability to create disruptive change. Early adopters are willing to put up with a lot of frictionand overlook a lot of foibles if they perceive that adoption will deliver huge benefits. The majority just want to keep pace. Skeptics actually perceive negative value to adoption and thus will hold out until non-adoption becomes so painful that it is easier just to capitulate! Different people see different value in different things.

In conclusion, I’ll reiterate: Products must not only be “simple to use,” but also to “simple to understand the value of.”  A clear and concise value proposition should make the list of drivers of consumer adoption.

*People are insensitive to large relative prices increases for goods that are cheap relative to their wealth, but they are very sensitive to small relative price increases on goods that are large purchases relative to their wealth. In English, I am virtually indifferent between a $1 pack of gum and a $1.10 pack of gum (10% price increase), but raising the price of a house from $100K to $110K (also 10% increase) is game changing. To complete the analogy, the amount of friction users are willing to overlook is proportional to the value they perceive. Thus I believe that a user’s initial perceptions are all the more important if the value proposition is marginal or unclear.

**Drop.io is another example of a “great” technology product (simple, sexy, social, useful etc) that risks missing consumer adoption because people don’t fully appreciate all of the things it is capable of. Getdropbox is a less versatile product that may ultimately gain more traction because it is more intuitive.

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Be Accessible (Plus 4 other lessons learned from successful VCs and Entrepreneurs)

Over the past year of interviewing CEOs and venture capitalists, I noticed an interesting, potentially counter intuitive trend: some of the most successful people are also the most accessible.

It’s counter intuitive because one would think that as someone becomes more famous/important/successful, the importance and number of people calling on that person would rise, leaving no space for the “average” person in their busy lives.

My experience completely contradicts this.  Brad Feld sits on half a dozen boards, writes three blog posts a day and is always training for a marathon and yet he took the time to give me several interesting ideas for my Fulbright research.  Fred Wilson looks at between 5-10 bplans a day, blogs/microblogs/audioblogs incessantly, and seems to constantly be hanging out with his kids during any spare moment, and yet finds time to comment on my blog, circulation circa 60.  Peter Barris had to cancel our first meeting because he had to smooth talk some foreign diplomat into letting his company launch a satellite into space, but he made absolutely sure to follow up with me.  The list of amazing people i’m indebted to goes on and on.  Thank you so much.

Why do successful people make the time?  I think there are a couple of reasons:

1)  Successful people are open to opportunity. You never know where it is going to come from, so you’ve got to keep your ears open.  If you tune people out with a superficial filter-just because they aren’t already important, famous, or powerful- then you are never going to catch the superstars of tomorrow.

2) Successful people pay Karma forward. I’m not even being spiritual here.  If you give someone an opportunity, even if they don’t end up benefiting you immediately, they will remember that you helped them and will go out of their way to help you down the line.

3) Successful people are just plain efficient. Who in gods name is typing blog posts from the treadmill anyway?  Further support for the maxim “If you need something done, give it to the busiest person you know.”  Lord knows this has held true in my own life.

4) Successful people are nice. These people are people too.  If you are nice and are talking about something they are interested in, why wouldn’t they want to talk to you?

Note: I’m not saying that everyone should start harassing the most famous people they can think of, but I am saying that anyone can contribute to anyone else’s life.  There’s no reason to be afraid to approach someone if you have their best interests in mind.  It pays to be good.

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