A few pictures of a beautiful fall morning in Alabama.
It is hard for new users of products to see how they actually work. It’s even harder for users to know about the interesting and creative use cases that many products can be used for.
Two companies that do a great job of helping users get initiated are Zapier and Trello.
The U.S. national debt is a terrifyingly huge number, currently $19.9 trillion dollars and racing frantically to the $20,000,000,000,000 mark. If you were wondering whether it is going up at an unimaginable rate – wonder no more! In the mere 26 days between November 18, 2016, and December 14, 2016, the national debt rose by $97,769,384,008.
$98,000,000,000 in 26 days.
Whether in a sports team or a company, there must be one person who is ultimately responsible for each role.
There isn’t a difference in effect between when everyone says “I’ve got it!” and when no one says anything. Both scenarios end up with the team “dropping the ball”.
Why does anyone give time or money to charities? Easy – it’s awesome to help support people in need and worthy causes. It also makes you feel good and is actually good for you. Pretty simple stuff.
I am a picky person when it comes to the causes I support. After all, you only have so much to give and just like anything in life you want your giving to yield great results and be put to good use. So, a small problem arises when you shop at a store with a policy of supporting a charity by requesting donations in addition to your purchase total.
“Would you like to round up your change or donate a dollar to support ________?”
Last week I ordered lunch for several people in the office from Tin Drum using GrubHub (desktop). As a first-time user I was very impressed with the GrubHub experience and business model. Although it was a solid “A” experience there were, however, a few things I noticed that could make the UX a bit more intuitive and in turn the business more viral.
There are “only two ways to make money in business: one is to bundle; the other is to unbundle.” – Jim Barksdale
Most of the time this concept is referenced in a conversation about cable companies, the music industry, or other technology companies, but the concept is more broad than this. It can be applied to land rights as well as other more innate things such as the right to negotiate or contract as well as others that often go underutilized.
I believe the best things to unbundle are assets or rights with no perceived value that can be put into production through creative thinking.
Desirable characteristics include:
- An unproductive asset: What do you have that you don’t even recognize you have?
- Can be very valuable if put to productive use: What could you (or someone on your behalf) do with this right / asset?
- Long lived: Doesn’t become less valuable through time alone or use
- Can be applied in many ways: Whether in mining or negotiating, find creative ways to use your available assets
You’ll Pay Me for That?
A great historical example of this concept is mineral rights and how during the early 20th century many millions of acres of mineral rights were purchased for pennies an acre.
Unproductive – Aside from instances where you live in the Bakken or Eagle Ford and sold for far too little, I would say most people got a fair deal from the sale of their mineral rights. After all, would you really have mined that coal yourself? Before selling their mineral rights, most people had probably never heard of the concept.
Valuable – A right in the wrong hands can be worthless, but priceless in the right hands. Even today so little value is placed on non-productive mineral rights that most states only impose taxes when minerals are produced from the site. Unfortunately for homeowners with surface rights that logic doesn’t hold – you can’t not pay property tax because you “didn’t use the guest room” last year.
Versatile Value – Another beautiful quality of mineral rights is that the specific value driver (coal, natural gas, gold, etc.) isn’t specified and can quite literally change from one mineral to another over time (natural gas and coal deposits are commonly found together).
Long-Lived – You use it; you (don’t) lose it.
“The meek shall inherit the earth, but not the mineral rights.” – J. Paul Getty
Things like mineral rights (as well as almost all other rights) exist in perpetuity which can make them very valuable to the right holder. For example, D.R. Horton and most other large-scale homebuilders keep the mineral rights to all homes they sell in the off chance that their neighborhood sits on a literal goldmine. It doesn’t cost DR anything to hold the right and buyers don’t expect a discount for their home not carrying the right so it is a win-win for DR.
What underutilized rights do people have that they could make better use of?
Why are free trials so often based on a timeframe (7 days, 14 days, 30 days)?
From a company’s perspective it must be very appealing to think you can shortcut the natural sales cycle and herd your customers through the shopping cart when it suits you. But odds are you will run into more than a few gatekeepers like Kevin who need to be wined and dined before they bring out the credit card.
Besides, don’t you want paying customers who love the product and know they will get a ton of value from it rather than those who will churn out after the first month?
No Ultimatums! …Or Else
A free trial based on a timeframe is an arbitrary ultimatum that creates a false sense of urgency. It isn’t like you are going to run out of software to sell if someone needs a few more weeks to decide if they want to pay for the product. Why in the world would you purposefully limit supply of something that 1) has unlimited supply and 2) you desperately want to scale?
Be a Mensch
If a 14-day trial is good, why isn’t a one-day trial better?
Obviously you wouldn’t expect many people will get a handle on the product in one day so this is clearly too short. You need to allow people to experiment with the product and gain value in their own time and through their own use of the product before you ask them to pay.
Value is created through use and understanding of a product, not simply through the passage of time.
People are busy and frankly don’t care about your timeline if they haven’t fallen in love with your product. These are the people you really need to help get value from the product – and pressuring them is a major turnoff. You have already made the software, why not let me fall in love with it before you make me pay for it?
I believe a use-based trial period or freemium model is a much more sustainable and more appealing way to structure the product orientation period. If the product isn’t a priority for me at the moment, I can circle back in a few weeks and learn more about the product when I have the bandwidth.
“The New York State Senate has passed a bill that would make it illegal to advertise short-term rentals (less than 30 days) for entire homes on Airbnb.” (Techcrunch)
First of all, why do we have laws against short-term rentals anyway? Other concepts of property law such as restrictive covenants on the size and look of a home or zoning restrictions on the type of businesses that can be in a certain area have a much more direct relationship to the impact one property owner will have on other nearby property owners. Conversely, the effects of short term rentals on other nearby property owners are minimal, having little aesthetic or property value impact.
I agree that having long-term residents with a vested interest in their neighborhood can be good for a community but that doesn’t mean that a certain amount of turnover has a meaningful negative impact on others nearby.
Whose Economic Rights Control?
Who cares about the distinction between “entire homes” versus other types of rentals like single or shared rooms?
Apparently some people are being pushed out of their existing housing as units are converted to short-term rental units. If this happened to me, I’d definitely be upset but this doesn’t mean that it is immoral – or should be illegal – for a landlord to do this. Although I see it as a very honorable thing to rent a home to a family, if you could make twice as much using the property for some other use it would be foolish not to.
One of the main arguments in favor of the new law is the idea of “leveling the playing field”. If hotels have to jump through hoops to operate, so should home owners.
From my experience across several Airbnb rentals the process works very well so this might be a sign that it isn’t Airbnb that needs to be regulated more, it is hotels that need to be regulated less. Why is it that when anyone speaks of “leveling the playing field” they always mean that we need more regulation? This tit-for-tat victim mentality may allow you to eke out a diminishingly viable business by stifling competition (and yourself in the process) but it will stand in the way of making true progress in moving your business forward.
Everyone understands the concept of ideas becoming laws, but it is much less common to conceive of laws becoming irrelevant. By inverting their thinking and not playing small-ball, the hotel industry might have better success in giving customers a great experience. The hotel industry may have won this battle, but if it wants to survive the war it needs to change how it plays the game.
Did Coke have 51% or 49% of the soda market? Coke executives were tired of the meaningless distinction and came up with another metric from which they could measure success and opportunity – share of stomach.
“It was a mind-bending paradigm shift for me. We weren’t trying to get share of market. We weren’t about trying to beat Pepsi or Mountain Dew. We were about trying to beat everything.” – Coke Executive
This expanded strategic vision led Coke to pursue many successful non-soda acquisitions including PowerAde, Nestea, Fruitopia, Dasani, Odwalla, and Vitaminwater.
It worked for Coke. Will it work for you?
While it is tempting to want to broaden your product focus to new market segments, unless you are already a dominant force in your own product vertical, diversifying your offerings may slow growth in your core product by diverting resources and focus from the core vision. In Coke’s case, when the new strategy came about, Coke was already the soda world leader. More importantly, Coke became the soda world leader by dominating its original market for decades and not abandoning its base competencies.
Coke was able to execute upon the new vision of their addressable market by realizing that their expertise was not only in soda, but liquids generally. While this seems (and is) a logical step for Coke, there are not many businesses with products as comparable as soda and water.
Although share of stomach is no longer part of Coke’s strategy, it provides several good guardrails for when to and not to pursue expansion across similar products. Including similar products in your growth strategy can make a projection more exciting, but pursuing these opportunities before you are a dominant leader in your core market will likely lead to both segments not reaching their potential.