This completely makes sense and in some ways justifies the success of companies like Apple and 37signals. Rather competing on features, companies should compete on ease-of-use.
Getting past the endowment effect also comes down to using concrete metrics. What's more effective? "My product has the latest and greatest features, it is so much better than the competition" or "If you use my product, it will save you X amount of time and/or Y dollars"? Obviously the latter. Saving time and money is a compelling value proposition--they are both easy-to-understand concepts that cut through consumers' irrationality bubble. Naturally, to be able to make this claim, you've got to make something that consumers want and that is also easy to use.
For a great book on this topic, check out Made To Stick by Chip and Dan Heath.
Anyone else familiar with the book he mentions at the end, Blue Ocean Strategy? The website (http://www.blueoceanstrategy.com/) is setting off all sorts of get-rich-quick-infomercial flags.
But I have some doubts about it. The basic idea is simply to be the first mover in a new market, rather than fighting for smaller and smaller niches in an existing market, as far as I can tell.
It's the kind of book you would read at say Stanford GSB or Harvard Business School--it's definitely reputable.
That said, davidw just summarized pretty much everything a tech entrepreneur would get out of the book.
All it says is that the wide-open markets are "blue oceans," the competitive ones are "red oceans." Many of the most successful companies started out in a blue ocean. Thus, you should opt to be in a blue ocean too.
It takes you through cataloging the 'dimensions' of an existing product, then changing one or more radically, and going back to look and see if it could make sense. It's an interesting mental exercise, if nothing else.
You can get a sense of just how irrational buyer behavior really is now that you understand why people are afraid to leave their overvalued software.
Uh huh. I'd been upgrading FF consistently until I realized that every new version just got worse and worse. So now I'm done upgrading. I understand that the "X" mark to close tabs is now on every tab, rather than on the right side of the pane. So, there: I've missed that ridiculous change.
It's worse with other things. The Java IDE Eclipse starting at 2.0 made a simple change: The search box defaults to "Case Sensitive", and never learns that I wan't this unchecked. Believe it or not, this destroys my productivity. So, I've learned not to upgrade Eclipse anymore. I don't care if they add a million new features--they've effectively destroyed the software for me with one stupid change.
There is no shortage of people who regret the 2000 > XP > Vista upgrade/descent path.
I remember the first VCR my family had. Put tape in. Press play. It works Want to try improving on that? You can't. DVDs are a nightmare by comparison. There's a 15 step process between holding the disc in your hand and actually watching a movie.
Consumers are more savvy than you think, in some ways. They realize, at some level, that companies just release the same thing over and over, sometimes with a new talking paperclip, sometimes with a new talking dog, and it's otherwise the same. The transition costs aren't worth it.
Of course, I'm talking about upgrades rather than Brand X > Brand Y transitions. That might actually be worse, since everything changes.
Getting past the endowment effect also comes down to using concrete metrics. What's more effective? "My product has the latest and greatest features, it is so much better than the competition" or "If you use my product, it will save you X amount of time and/or Y dollars"? Obviously the latter. Saving time and money is a compelling value proposition--they are both easy-to-understand concepts that cut through consumers' irrationality bubble. Naturally, to be able to make this claim, you've got to make something that consumers want and that is also easy to use.
For a great book on this topic, check out Made To Stick by Chip and Dan Heath.