The Pain Papers
7/10/2001
The Pain Papers
Newsletter #1 - July 10, 2001
Copyright (c) 2001 Christopher K. O'Leary
All Rights Reserved
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CONTENTS
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- No More Gadgets, Please
- The CNS and Pain
- Early Adopters and Ordinary People
- Microsoft Office XP
- AOL Gets It
- Webvan RIP
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RANDOM THOUGHTS AND MUSINGS
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Given that this is my inaugural newsletter, let me be slightly non-random for a moment.
First, let me remind you why this newsletter exists.
I believe that many people have forgotten how to create and innovate. Instead of building products that solve people's problems and alleviate pain, they seem to be largely focused on making money. Of course, the dot-com debacle has pointed out the problems with the money-centric approach.
While the money-centric meme has since died, people seem to have forgotten (or more likely never learned) about the alternatives. As a result, the economy is in a deep and pessimistic funk. The lack of alternatives isn't surprising given the fact that the ideas contained in most creativity books are very hard to apply to the problem of creating a new business and most entrepreneurship books assume that you already have The Idea.
I have taken it upon myself to remind people that the single best way (not one of the best ways) to generate, evaluate, and communicate ideas is to look for and solve the pain that people are feeling. If you take a pain-based approach then you will find that people will be more likely to adopt your product or service and, as a bonus, you will make the world a better place.
Now on to business...
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NO MORE GADGETS, PLEASE
I am currently helping a friend who is trying to start a software company. His idea is for a very technical product that will save eCommerce companies money. My friend has spent the past 3 months building a prototype of the product and has proven that the product will work as advertised.
The problem is that, while we have met with a number of people who think the product is neat, we have yet to find someone who really wants to use it, much less buy it. Nobody will pull the trigger. As a result, my friend is having a hard time finding money to finance the completion of the product.
I would submit that the root of the problem that my friend is facing comes out of the process by which he developed the product. It went something like this:
- Come up with the idea.
- Build the product.
- Find someone who wants to buy it.
Now, this isn't an unusual approach to product development. In fact, this process is probably used by half (or more?) of the companies in Silicon Valley and many other companies and entrepreneurs. However, I think the difficulties that my friend is having point out the fundamental flaw with this approach.
It gets things backwards.
I would submit that the best way to develop new products is to turn the conventional process on its head. A better process would go something like this:
- Find someone who needs a product.
- Build the product that they need.
One big advantage of this revised process would be a higher batting average and much less wasted time. The revised process would also reduce the development of products that do not and will not have a customer. This will save people and companies tremendous amounts of time and money.
So why isn't this done?
Well, I think one big reason is that the systems and processes don't exist to mine problems and pain for ideas. Companies spend most of their time looking for ways to please the customers that they already have instead of taking a hard look at the ways in which they are still dissatisfied. In some ways, our customer service mentality smooths over opportunities for innovation.
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THE CNS AND PAIN
At the urging of Michael Schrage (author of "No More Teams" and "Serious Play") I have been digging into the physiology of pain and I can tell you that what I have found is fascinating. The main book that I have been reading is "Why We Hurt" by Frank T. Vertosick Jr., M.D. One of the main things that Vertosick talks about in the book is the consequences of hurting too much or too little.
The quote that is really resonating with me is...
"Pain protects us from bodily harm. Dangerous things are hurtful things, and pain punishes us if we take excessive risks or push our bodies beyond their physical limits...Without the lessons of pain, our bodies would soon be ravaged by commonplace traumas. Witness the cruel limb deformities seen in numbing diseases such as leprosy and syphilis, and in children with the congenital absence of pain perception...Pain is a teacher, the headmaster of nature's survival school, and like any teacher it requires pupils with an ability to learn...Pain only matters to organisms with an advanced talent for learning, remembering, and adapting...Pain isn't synonymous with life, it's synonymous with intelligence." WWH pp. 1-2
While these lines are so rich and so full of insights that I could write a paper around them (and will), let me just make one point.
For decades people have been asking, "Why do companies die?" I would submit that one of the big reasons that companies die is because they succumb to a form of corporate leprosy. They build up layers and layers of management and reports and end up insulating themselves from the real world. They lose the ability to sense the pain that is going on in the marketplace and thus become increasingly vulnerable to attack. They not only stop listening to pain, they lose the actual ability to listen to pain. As a result, they stop learning.
If pain is central to learning, then a lack of pain means a lack of learning.
Smart people like Sam Walton understood this. One of the reasons that he spent so much of his time out in the field was so that he could feel the pain that was going on in the marketplace. He understood that he would not get the same information if he counted on its trickling up through the organization. This would not happen because people would assume that pain was a sign of a problem and they would not want to tell their boss about the problems.
What companies need to do is understand this problem and work to build a Corporate Nervous System that will allow them to remain in touch with the marketplace even as they grow. They need to understand that pain, because of people's desire to look competent and to shield others from bad news, will naturally become damped if it flows up through the traditional channels of an organization. As a result, smart companies will develop mechanisms that will allow them to remain in touch with the pain that exists in the marketplace.
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EARLY ADOPTERS AND ORDINARY PEOPLE
One big reason why the dot-coms failed can be summed up in three words...
People are different.
I won't go into too much detail about those differences because great books like Geoffrey Moore's "Crossing the Chasm" and Everett M. Rogers' "The Diffusion of Innovations" have already covered the subject.
However, I will tell you about what I think is the Big
Idea of both of these books.
Every human population is made up of two distinct, and very different types of people: the Early Adopters and Ordinary People. Between these two groups is a Chasm that companies must cross if they are to move from selling to Early Adopters to selling to Ordinary People.
Early Adopters make up 10 to 20 percent of any population. They are the people who buy things as soon as they come out because they are new, cool, and hip. In contrast, Ordinary People make up 80 to 90 percent of any population. Ordinary People are very different than Early Adopters. They take their time. They think things over. They talk to their friends. They see what everyone else is doing.
Of course, it should be clear that, because of their sheer numbers, succeeding with Ordinary People is critical to the success of any company, and to do so you must speak their language.
What happened over the past 5 years is that the dot-coms thrived as long as they had a plentiful supply of Early Adopters. However, these supplies, being limited, were soon exhausted and the market entered The Chasm.
To cross The Chasm, many dot-coms then shifted their focus. They tried to find similar groups of Ordinary People who would try and then buy their new, hip, and cool products and services.
But they found that most Ordinary People were not listening.
Ordinary People are very pragmatic. They purchase most products and services in order to address a Pain that they are feeling or to solve a problem that they are facing. They also take their time when deciding to purchase because they have higher Pain thresholds than do Early Adopters.
As a result, when presented with the products and services being offered by the dot-coms, most Ordinary People weren't interested in even trying them. While those new products and services were certainly new, cool, and hip, they really weren't appealing because they didn't address the various sources of Pain that most Ordinary People were concerned about at that moment.
They weren't worth the effort.
It is important to reiterate this point. The problem
wasn't just with how the dot-coms were trying to sell. It's not
just a question of bad or ill-conceived marketing — although
there was plenty of that to go around. The bigger problem was
with what the dot-coms were trying to sell.
The dot-coms were trying to sell products that were conceived and developed largely without any thought being given to the Pain that they alleviate or to the problem that they solve.
As a result, for the most part Ordinary People ignored the dot-coms.
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RANTS AND RAVES
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MICROSOFT OFFICE XP
I can't help but take a minute and rant about Microsoft Office XP.
Can someone tell me what problem Office XP solves? What's in it for me?
Office XP seems to be a prime example of a product that benefits the seller more than the buyer. Microsoft needs to improve its profitability, so they have done two things. First, they have included stronger anti-piracy features in the product. Of course, this means that I am out of luck if I try to move the package from one machine to another. What a pain. Second, they have increased the price. All of this comes in a package that offers me little in the way of improvements.
One big clue that Microsoft is in trouble is that they have broken the "If you have to force people to move to a product then you have a problem" rule with Office XP. Microsoft is trying to force people to move to the new platform early by only ensuring upgrades for a limited time. This smells of desperation to me. Forcing people to move to a new product is never a good sign.
The whole Office XP thing also points out the problem with companies that do not learn to innovate. At some point they die because they have to use increasingly bizarre tactics to keep the money spigot open. At some point these tactics become too painful and people start looking around.
Hear me now. I predict that Office XP will be a failure and signals the tipping over of the Microsoft growth curve. It's all downhill from here.
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HALL OF FAME
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AOL GETS IT
I was in Target the other day and the sight of a rack of AOL
disks made it clear to me why AOL has been so successful.
They understood that to win they had to take the pain out of becoming a customer.
As a result, AOL has spent a tremendous amount of time and money making it insanely easy to become a customer. They practically carpet bomb the United States with their damn disks. While annoying, that tactic has been incredibly effective.
To understand why this is important, compare the AOL sign-up experience with that of one of their "better product" competitors like Mindspring or MSN.
To sign up for AOL, you just have to find one of the disks that you received lately. Alternately, you can go to Barnes and Noble, Target, or any one of a number of retailers. The point is that you are never far from an AOL sign-up disk.
In contrast, signing up for Mindspring or MSN takes significantly more work.
In the case of Mindspring, you first have to find one of their sign-up disks. This can be very difficult and often requires you to call the company - but how do you find out their phone number? It is easy if you already have Web access, but most of the people who are signing up now don't - that's why they need an ISP. Once you find the number, then you have to wait for days while they mail the sign-up disk to you. What a pain.
AOL has also been very smart in putting their disks in places where Ordinary People are located. I would submit that placing disks in B&N and Target is one of the main reasons that AOL has succeeded. It's also interesting to watch which retail stores AOL has placed their disks in. It is almost as if they pick stores according to their clientele. As more and more people sign up, they put their disks in increasingly mass-market stores. This is a classic example of working the Technology Adoption Curve.
Contrast this with MSN. MSN has never had the insane focus on ease of sign-up that AOL did. In fact, MSN and many of AOL's competitors mocked the very strategy that made AOL such a success. Of course, once they mocked the strategy it became very hard for them to then adopt it. This left AOL with an embedded head start. MSN also made a mistake by distributing their product only through stores like Best Buy. While this may seem logical, the problem is that they are too early. Most people do not think about things like Internet access until they are comfortable with their computers. As a result, MSN has been left to play catch-up from day one.
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HALL OF SHAME
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WEBVAN RIP
I am not going to say much about Webvan, but I will say that I am not surprised. As I see it, Webvan had two main problems. First of all, the company and idea were based around nostalgia and technology, not pain. Second, and most importantly, they got some really bad advice and got too big too quickly. Basically, they bet on one approach and did little or no experimenting. They put all of their eggs in one basket. The problem is that their experiment failed and they had no time or money to recover.
I believe that home grocery delivery will succeed. However, it will take a great deal of experimentation before companies figure out exactly what works. Webvan didn't build the learning into their business plan and thus died when they bet wrong.
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