The launch of the iPhone, announced in January 2007, created the smartphone industry and tapped a flood of latent demand. To this day, no competitor has succeeded in fully beating its array of hassle-fixing features.
And think about the sheer frustration of wrestling with digital tools that do only a fraction of what you’d like them to do and were apparently designed with anyone but the end users in mind. One Wall Street trader recalls complaining to the engineers who supplied electronic data-managing equipment to his firm, “All of you people keep producing devices where the letters and numbers are much too small for me to read, and the buttons are too small for my big fingers.” Petty problems? Not when a trade is in the balance and a mistaken digit may cost millions.
That trader was Michael Bloomberg, who parlayed his experience with the hassles of using financial data into the information empire that bears his name.
The kinds of insights that led Hastings, Jobs, and Bloomberg to create big new streams of demand seem obvious in retrospect—but only in retrospect. These three great demand creators made their discoveries by immersing themselves in the lives of customers—indeed, they were the customers—and becoming experts in the hassles that ordinary products and services generated. It’s a form of intense, problem-solving exploration that is both objective and subjective, often better couched in intuitive, emotional terms than in statistics. Maybe that’s why most business executives find this kind of exploration difficult to master—especially those immersed in the high-tech world, where it’s so easy to fall into the trap of putting devices rather than people at the center of the universe.
Hastings, Jobs, and Bloomberg are all masters of the hassle map—the array of frustrations, inconveniences, complications, and potential disasters lurking in most customer experiences. Think about the last time you traveled by plane, challenged an erroneous cable TV bill, or dealt with any large and unresponsive bureaucracy. That’s the definition of a hassle map. Each needless step, wasted moment, and disappointing outcome is a friction point on the hassle map—and each represents an opportunity to create new demand by eliminating the friction or even reversing it, turning hassle into delight.
A hassle map may be a purely mental construct, or it may be a literal map—a physical, visual representation of the hassles a customer experiences. If you want to master the discipline of demand creation, drawing the hassle map of the customer you seek to serve is an invaluable exercise. It’s a crucial step toward seeing differently—glimpsing, for the first time, both how bad the present reality is and how much better it can become.
Some hassle maps are lists of the steps involved in a process, often including too many activities that are needlessly complicated or whose value and purpose are unclear. (Filling out your income tax return might be an example.) Other hassle maps chart the people, organizations, suppliers, and sources a customer must engage to complete a given task, often leading to confusion, waste, excess choice, and information overload. (Renovating a kitchen, for instance.) And still others graph the trade-offs between consumer needs that are equally desirable yet apparently mutually exclusive: In one arena after another, customers are told they can have low cost or quality, convenience or variety, personal service or speed—but never both.
As they sketch the hassle maps of their customers, the smartest demand creators ask themselves probing questions like:
“What is the psychology of customers? What do they want out of life? How do existing products meet those desires? And if they don’t, why not?”
And also: “Which hassles drive customers crazy? Are there hassles they barely notice because they’re so familiar—but which we might be able to fix?”
Hassles are everywhere. But people with the clarity of vision to understand them and the tenacious creativity to fix them are few and far between. That’s why it took decades for auto travel to become (relatively) safe, easy, and efficient—and why it may take decades more for the digital information revolution to achieve its full potential.
TODAY—at long last—we’re witnessing the start of a transformation of the digital landscape driven by a handful of pioneers who recognize the crucial importance of hassle map thinking. In the process, they are creating incredible floods of demand for their magnetic, life-changing, hassle-reducing products … as well as changing the rules of the high-tech industry game.
Hassle map thinking has a way of turning traditional perspectives upside down. Accordingly, the transformation of our digital world by masters of the hassle map has produced business outcomes that look like startling anomalies.
In this transformed world, a computer company (Apple) makes the best cell phones and leads the music distribution business. An online company (Netflix) is the most powerful emerging rival for the demand currently flowing to the television networks and the cable companies. Another online company (Amazon) is the world’s second most valuable retailer (despite having no retail stores), one of the most innovative makers of electronic devices, and an increasingly powerful player in book publishing. And a data technology company (Bloomberg) is a major force in the media universe once dominated by companies like NBC, the New York Times, and Dow Jones.
These outcomes make little sense when we try to sort companies under neat, familiar labels like “computer company,” “media company,” “telecom company,” and “consumer electronics company.” But they make perfect sense when we consider all of them under the heading of “hassle-fixers.” The companies that are creating the greatest demand streams in today’s high-tech world are the ones that do the best job of fixing customer hassles by using technology from any source—regardless of labels. Today’s digital hassle-fixers are reaching beyond individual technologies like the PC or the cell phone, redesigning these devices and the infrastructure that surrounds them to make them more responsive to customer needs.
Sometimes this involves merging technologies; in other cases, it involves connecting the dots among devices or information streams; in still other cases, it involves creating new tools, technology-based or otherwise, that make digital devices more convenient to use. But in every case, the hassle-fixers understand that the new key to success is developing innovations that are centered on customer problems, not device capabilities.
The emerging result of this new, customer-centric approach is the erasure of the neat divisions that once separated technologies from one another. We’re now moving rapidly toward a One-Click World in which customers take for granted easy, instant, ubiquitous access to digital products and services—and in which the industry boundaries that once defined demand spaces are no longer operative.
Hundreds of companies are now grappling in the resulting worldwide scrum. Yet only a few seem to fully understand what is happening. Consider, for example, the contrasting paths of two great corporations—Sony and Apple.
Sony could have been an early player in the one-click game. It had expertise and experience in all the industries that today are merging. Starting as a consumer electronics company, Sony took positions in the computer industry (Vaio), the telecom industry (Sony Ericsson cell phones), and the media industry (Columbia Pictures, music, games). But all these positions were “siloed”—that is, there were no links between these businesses that would benefit or even impact a consumer’s experience. Owning a Vaio laptop had nothing to do with using a Sony Walkman to listen to music or watching a movie from Columbia. Sony owned places in all four industries, but (despite the much-discussed notion of “synergy” among these positions) it didn’t integrate them for the consumer or create new tools to improve anybody’s hassle map.
By contrast, Apple’s Steve Jobs has been a pioneer of One-Click World. When he entered the consumer electronics world with the iPod, he integrated the iPod with iTunes, the world’s first (and still its best) system of software and online retailing for buying, organizing, and enjoying music and video. Then he entered the telecom space with the iPhone and integrated that product into an even bigger and more powerful system of apps and services (incl
uding iTunes). Today the iPad is connecting touch-screen technology with video created by movie and television producers, digital content from book and magazine publishers, and many other sources of information and entertainment.
Rather than simply participating in four separate industries, Apple integrated them. Even more important, it connected the dots between the digital technologies and a world of desirable content, redrawing the consumer’s hassle map and providing a seamless, unique, and powerfully magnetic experience.
The business result: an extreme and unforeseen reversal of fortune. In December 2000, Sony had a market value of $63 billion, Apple less than $5 billion. Today, they’ve swapped positions. Apple’s value (as of March 2011) is $330 billion, while Sony’s is just $36 billion. The demand result: Consumers the world over associate the name Apple with products and services that are not only cool, elegant, and powerful, but also intuitive, easy, and fun to use—hassle-fixers par excellence.
In One-Click World, we customers increasingly assume that products will ignore technological boundaries to bring us convenience, accessibility, and fun. When offerings remain trapped within traditional technological or corporate walls, we are poised to reject them—and more so with every passing month.
Another example: The first version of Sony’s Reader, launched in the United States in September 2006, was a well-designed, even revolutionary consumer electronics device, using E Ink technology to create the best-looking digital book reader anyone had ever seen. But you almost certainly didn’t buy one. Why? Because Sony didn’t find a way to merge that wonderful technology with affordable, instantaneous, ultraconvenient wireless access to most of the world’s favorite books. Fourteen months later, Amazon’s Kindle made that connection happen, making Amazon the early winner in the e-reader race.
The e-reader contest illustrates the Curse of the Incomplete Product. The rule is simple: In One-Click World, a new product that offers only part of what customers want will miss the target.
Imagine the iPhone without the App Store and the thousands of loyal software developers creating cool, useful tools to enhance the phone’s value—it would be just another cell phone (though well designed) for people to complain about rather than a lifestyle accessory people fall in love with.
And mentioning Apple, Netflix, Amazon, Kindle, and other successful one-click demand creators suggests a second reality of the new competitive universe—the Three Dimensions of Design. In One-Click World, design has become ten times more important—in terms of device design, yes, but also in terms of experience design and the design of the business system that supports it.
The great one-click companies take the physical design of products very seriously. You know about Apple’s superlative aesthetics. But did you know that Netflix ran through more than one hundred fifty redesigns of its iconic red mailing envelope before finding the design that served its customers most effectively? Have you ever really examined the brilliant combination of form and function that is the Amazon website (and which Netflix frankly admits it imitated when creating its own superb pages)? Or noticed all the subtle differences, such as perfectly positioned buttons, that made the Kindle easier and more fun to use than the original Sony Reader?
Even more important than device design, however, is the artistry that these companies deploy in designing the experiential connections between them and us, their customers. Think in terms of hundreds of adjustments, large and small—in systems, interfaces, information flows, service protocols, intercompany alliances—each of which reduces the amount of time wasted, effort expended, or frustration experienced by customers by a fraction of a percent. Add up all those differences and you have a (practically) hassle-free experience that we customers love and will happily pay for, rather than one we remain indifferent to.
And then there’s the third dimension—the design of the business, which nails the difference between success and failure. Successful one-click companies understand that a world-class business design is not available ready-made but must be custom-built with at least as much creativity as an innovative new product, including a value proposition that’s unique, a profit model that captures a share of the value delivered to buyers, and strategic control to protect those profits.
So the emergence of One-Click World is a fascinating phenomenon with all kinds of implications for the future of demand. But it starts in a very simple place—with a few unusual people who share both a clear-eyed focus on customer hassles and an unrelenting determination to eliminate them, no matter what technological boundaries they must violate in the process.
BETTER THAN A BONUS: BLOOMBERG BUILDS
A SERVICE TRADERS JUST WON’T GIVE UP
As long ago as the early 1970s, Michael Bloomberg was exploring ways of fixing the hassle maps that bedeviled Wall Street traders. His mission: to make timely, vital data more easily accessible and really useful to men and women for whom information equaled profit. It was a mission for which his background and personality made him ideally suited.
Bloomberg’s first job, in high school, had been a part-time stint at an electronics company in Cambridge, Massachusetts. He went on to study engineering at Johns Hopkins before attending Harvard Business School and becoming a floor trader at Salomon Brothers—by all accounts a particularly impatient and irascible one. (“He was always screaming,” recalls one former colleague. “He’d call me, put me on hold, then three minutes later he’d come back and yell, ‘Whaddayawant?’ I’d say, ‘Bloomberg, you called me!’ ”) Bloomberg appreciated the value of any tool that could save traders time and help them focus on their number one job—making money. He was also quick-witted, strong-willed, self-confident perhaps to excess, and fond of the spotlight. These traits exasperated Bloomberg’s colleagues at Salomon but ultimately served him well in his later careers as a One-Click World demand creator and a precedent-smashing independent politician.
At its root, success on Wall Street is all about information—about being quicker to recognize market-moving trends, price shifts, imbalances, and anomalies than the trader around the corner, or, today, around the world. So investment banks, brokerage houses, and investment managers had always been among the early adapters of new information technologies, from the telegraph and the telephone to the telex and fax machine.
By the early 1970s, Bloomberg was already using his engineering background to figure out how computers could make securities trading more hassle-free. Having been put in charge of Salomon’s information systems, he talked the company into providing every trader with a computer workstation wired to a back-office mainframe—a step that was revolutionary at the time. Then he recruited programmers to devise ways of connecting the dots so as to make this infrastructure more useful to traders. Having been a trader himself, Bloomberg understood the trader’s hassle map, even down to the physical elements of infrastructure—hence his obsession with details like the legibility of characters on monitors and the size of buttons on keyboards.
Unfortunately, Bloomberg’s fellow partners at Salomon Brothers didn’t fully appreciate the value of his insights (or, perhaps, the high-voltage combination of those insights with his combustible personality). When the firm merged with commodities-trading company Phibro Corporation in 1981, the irascible Bloomberg was “not invited to stay”—or, as Bloomberg less genteelly put it, “They threw me out after fifteen years.”
Being ungraciously canned stung Bloomberg’s sizable ego. But it also unleashed his powerful entrepreneurial streak. Together with a handful of partners, Bloomberg used the nest egg he carried away from Salomon to launch a company dedicated to bringing electronic information tools to Wall Street. Three forms of value would be provided: streams of up-to-the-moment financial data, from stock and bond prices to currency valuations; electronic systems to connect traders with back-office systems to facilitate rapid execution of trades; and software tools to perform analytic tasks like identifying arbitrage opportunities or comparing the relative values of securities.
; These were the kinds of services Bloomberg himself would have lusted for during his trading days, and they looked and were impressive even on the primitive electronic equipment then available. A Wall Street veteran recalls seeing an early demonstration of the service using “an old IBM Selectric typewriter hooked up to a terminal”—dated technology even at the time. But savvy traders understood its power.
The first order was from Merrill Lynch—an ideal business fit, since Merrill was not then a major player in the capital markets and was looking for any unique advantage to spur its growth. Merrill assigned two traders to provide detailed, real-time feedback on the technology. According to Bloomberg himself, their “nit-picking” played an important role in the service’s success by facilitating a steady stream of improvements. Increasingly impressed with the trading edge Bloomberg’s data feeds were providing, Merrill invested $30 million in the business with the proviso that no sales be made to Merrill competitors for five years—a restriction Merrill waived when it realized the huge profits to be enjoyed once the floodgates of demand were opened. Bloomberg LP was up and running.
It didn’t take a prophetic genius to see, in the 1980s, that electronic IT tools would be increasingly important for financial professionals. Bloomberg had at least twenty potential rivals, chief among them Reuters and the Dow Jones electronic news service, Telerate. But these competitors assumed that generic data was all their customers needed. Bloomberg knew better. He began hiring analysts to transform generic data into proprietary information with unique value to traders.
Some of those value-adding transformations might seem mundane—for example, converting company data compiled for different fiscal years and based on different financial assumptions into uniform formats for easy, accurate comparisons. But they dramatically simplified the trader’s hassle map by eliminating time-consuming steps from the investment decision-making process. Others were more sophisticated—for example, continually updated yield-curve analyses, an array of portfolio-planning tools, “what if” systems that allowed traders to extrapolate the results of alternative investments, and programs to support “black box” trading systems that made investment decisions electronically. Thousands of traders who tried using such Bloomberg tools quickly found it difficult to imagine ever having to live without them.
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