Simplicity: The Value of a Clear and Concise Value Proposition

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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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