User Funding

Yesterday, I posted about the contribution that Al Sloan made to US business culture. Whether you think Al was great or something less than great, he was a trail blazer. He introduced new ideas that “stuck”. And great corporations copied his management ideas.

Al also started a process that we are still getting used to. That process is giving people what they want. As Lafley & Martin bring out in their important book, “Playing to Win” this is much harder to do than it looks.  I never realized how complicated it is just to sell laundry detergent. But modern markets are based on nuanced understanding of what people will pay for – not on what you or I or anyone else think we should buy.

At least part of this is manipulation. “NEW” and “IMPROVED” is at times actually bad for you. Products may actually harm you (like cigarettes). But even if they don’t, you easily cede problem solving thinking to firms by relying on them to do stuff for you. Without realizing it, as you turn over your preference data, you can be squeezed out of the design cycle.

BTW, this was an idea that Angelo Pellegrini wrote about back in 1948. Here is Angelo hard at work in the kitchen

You might check out his book “The Unprejudiced Palate“.

I think about Angelo a lot these days. He championed the simple idea that growing your own food and eating it is fun. He took back the power of shaping his life. Not as a rebel, but as a regular guy who loved to live well. He just thought it was silly that people knew so little about what great stuff they could get from their own gardens.

So why is this important? I am sure that Al Sloan would have dismissed Angelo Pellegrini as a bit of a nutcase. But I think the future belongs to people like Angelo. People who do simple things better and share these ideas will re-shape how huge markets operate.

If you are still scratching your head, keep in mind that our buying preferences are not fixed. What we buy is shaped by our expectations of what we get out of the purchase. So it is said that we buy “experiences”. Errr …. Like the experience I get when I use my amazing Leica binoculars.

Do I need these? No. Do I love the experience when I use them? Absolutely.Would I buy other gadgets that have little practical value but offer similar great experiences? Probably, if I could afford them.

So how are our expectations shaped? By stories that we connect with – stories that appear possible and desirable. And here is the kicker – as we share information about what is possible and what is desirable, we develop expectations that are less dependent on marketing directed to us. We start valuing stuff like growing our own food, the way that Angelo did. And instead of loving my not so useful binoculars, I might start loving my “slugs away” electric fence.

You might ask “what is new about this?” After all, Angelo passed on back in 1991. Don’t we already do this? Here is what is new —  radically lowered costs of generating and sharing information via internet (costs that will fall further). Information is power, when it is put in usable form. In the old days, firms enjoyed the power of researching consumer preferences and got fantastically rich by transforming that data into stuff that was good enough. But when buyers get involved in more stories, our expectations and hence our preferences change. Power will move to those who are in tune with this new sort of process.

You might read this article about bitcoin from this perspective. Not so much to get into bitcoin, but to start thinking about appcoin.

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