Tag Archives: user experience

The Contradictory Nature of Mobile Unbundling and the Emergence of Niche Marketplaces

Two specific, but highly related, points of view are gaining widespread acceptance among venture capitalists in the technology industry. The first is succinctly explained by venture capitalist Albert Wenger in a post called Facebook’s Real Mobile Problem: Unbundling. The gist of the post can be summed up by this comment: “Mobile devices are doing to web services what web services did to print media: they unbundle.” Fellow venture capitalist Andrew Weissman expanded on this idea in a post called The Great Fragmentation. In it, Andrew goes further, arguing that unbundling might be a core feature of the internet.

A second, but related point, is the emergence of the niche marketplace. Venture capitalist Andrew Parker has a post called The Spawn of Craigslist in which he shows how the behemoth marketplace Craigslist is getting slowly disrupted in a vertical-specific way. Venture capitalist Chris Dixon expands on this idea, saying that the only way to be successful as an online marketplace now is to take a vertical-specific approach.

Together, these venture capitalists describe a future in which there is a specific app or specific marketplace for every need a user might have. Instead of going to Craigslist to find an apartment, movers, a maid, a freelance web designer for your home business, a date, and last minute tickets, a mobile user would instead have an app for Padmapper, TaskRabbit, Homejoy, ODesk, HowAboutWe, and WillCall. The key to being a successful venture capitalist then shifts from finding businesses that tackle very large markets e.g. Craigslist to finding businesses that target markets that could be much bigger with unbundling e.g. Airbnb.

All of these VC’s are clearly smarter than me, but I take a somewhat contrarian view here. I hope the above example points out the main problem with this theory. In the above picture, in order for this mobile user to accomplish his/her goals, instead of needing to just know about and have an app for Craigslist, s/he now needs to know about and have apps for six separate businesses. One other thing venture capitalists agree on is that mobile app discovery is hard, and that the amount of apps mobile users will download and use is limited by both device memory as well as human memory. This same problem faces the sellers of services on marketplaces. With no aggregate marketplace, it may be harder for a seller of multiple services to know which ones exist for which product/service they are selling. Marketplaces thrive on a multitude of buyers and sellers. Unbundling of marketplaces makes building that two-sided network harder.

Something has to give here. You can’t have a future where everything is accomplished online via a mobile device, consumer’s preference on mobile is for apps, there will be hundreds of specific services for anything a user needs that are more powerful than aggregate services, app discovery is difficult, and people will only have 41 apps per phone. I think there is some sort of equilibrium here. Even if app discovery is solved (and that’s a hard problem), the rate of successful unbundling certainly seems like it has to be limited by 1) the amount of space on someone’s phone, and 2) user’s inability to be aware of hundreds of niche services they may need at any time. If you think a recommendation engine could solve this with big data, I recommend you read this article about how successful that’s been for other services.

If I had to guess, I would surmise that user unbundling will not be a trend in and of itself, even if it is a trend in technology startups building new businesses. Unbundling will continue when either 1) the frequency of the activity that is being unbundled is high (my standard would be weekly), or 2) the advantage of the unbundling is exponentially more valuable than the bundled version of the same activity. For criterion 2, that advantage will also be a moving target where the advantage has to become greater and greater to justify phone/brain space as more apps improve their utility. Number of apps per phone will continue to grow, but a decreasing rate, and with that growth, there will be a decreasing state of awareness for both apps that are on a user’s phone and ones that are not. If you doubt this, just think of how many websites you visit regularly. Think hard. It isn’t that high, is it? Now think about apps? Even less? Me too.

So, what does this all mean? Well, my take is that high frequency services like chat or picture taking continue to become unbundled from any aggregate services consumers use for them because of the ability of mobile to create superior user experiences for succinct actions. But, marketplaces that aggregate niche activities that users need only occasionally can continue to thrive e.g. eBay and Craigslist. One should expect only a handful of the dozens of services hoping to disrupt Craigslist or eBay or Amazon to survive, because of fantastic user experience or a high frequency of use. Finally, one should not be so quick to anoint the niche marketplace model as the emergence of mobile presents as many limitations to their success as it does opportunities for growth.

On Lagniappe

I grew up in New Orleans, and there’s a word in use there that isn’t known anywhere else. Mark Twain said it was “a word worth travelling to New Orleans to get”. It’s a French word based on a Spanish phrase, the type of co-mingling of language only possible in such a place as New Orleans. So, what does it mean, and why is it so powerful?

Everyone in New Orleans will define lagniappe the same way, as “a little something extra”. The real meaning’s a bit more complicated than that. For example, the other day I ordered from Leona’s on GrubHub. Every time you order, no matter what you order, they add in at least one of these mini-cupcakes they make for free. First off, they are delicious. Secondly, there’s no message about it, and you didn’t have to pay anything for it. It’s just there for your enjoyment. That’s lagniappe, that little something given to you for free that you weren’t expecting but is such a treat to find. This type of practice is common in New Orleans, but you rarely see it elsewhere outside of the extremely common baker’s dozen or the fortune cookie in Chinese restaurants, which, because they’re so common, are expected and therefore no longer really lagniappe.

This type of practice creates such an overwhelmingly positive impact on the experience, I don’t understand why the practice in business seems to stay limited to small shops in New Orleans and bakeries. A small gesture can go a long way in creating a memorable experience with your customer, and whether you deliver food, make doughnuts, or do management consulting, there is always a way to give lagniappe. So, what little something extra are you providing your customers? How can you give lagniappe?

Design and Business Inspirations: A Reflection on the Remarkable

With the end of the year approaching, I thought I’d take some time to reflect on some of the things that have impressed me this year in design and business.

New Businesses:

Everlane Logo

Everlane is a new startup that sells designer quality clothing for under $100. They premiere a new collection monthly of different types of items. The first month was shirts, the second month ties and bows, etc. They have also featured scarves and backpacks so far. Especially as a man, the ability to find quality clothing at an affordable price can be quite the challenge. Everlane solves the problem by consistently producing quality “basics” every person needs. Everlane has been in a limited launch where it requires you to get others to sign up to get access. This tactic is not without its hiccups as some people have been waiting forever that are early adopters, but it spreads the message and anticipation and continues to motivate even after you are granted access because more friends = more perks. See below.

Everlane Loyalty Program

Postmates Logo

Postmates is an on demand service for couriers. As someone who has the iPhone app, you can request a pickup/delivery, and Postmates sends the orders to couriers that have signed up to receive more business who then can accept or deny the order. This is the classic approach of a two-sided model where a particular industry has idle time and can use more business. At the same time, this service makes it easier for people to find courier services so they can get packages across town without using the post office. Postmates will take a fee from each courier transaction.

OneReceipt Logo

OneReceipt is an online home for all of your receipts. Just sync up your email and have all of your email receipts organized in one place. Snap pictures of offline receipts to add them as well. OneReceipt will itemize and categorize all of your spending and provide reports. Long-term, they will attempt to use your spending to match you to targeted offers. The business model end will be a work in progress as it’s unclear how they will get past deal fatigue or even if what people want from a service that’s telling them how much they spend where to spend more. I had the pleasure of talking with the founders before their beta launch, and they are sharp guys, so they will figure out the right way to monetize. That said, the sync technology is impressive, and something competitor Lemon doesn’t have.

Fab Logo

Fab is a flash sales site for design. Fab has curators that handpick vendors to provide flash sales on the site and their mobile apps. The sales are categorized in such a way that you can immediately tell if it’s something you are interested in or not. You can purchase easily through the site or the app, and the merchandise seems to be of consistently high quality. My experience with Fab has been so nice that it made me think I’ve just been missing out on the whole flash sale scene. So I signed up for some other flash sale sites, and no, Fab is just special. The site and app are so enjoyable to use that I don’t need a daily email to remind me to come back to the site. It is fun to just browse the app if you have a few minutes to waste on the bus ride home. That said, the Fab website has a bit of a confused identity, as part of it is flash sale site and part of it is Pinterest competitor. I also question their ability to scale here as they definitely do not have drop ship relationships with all of their vendors, so inventory and warehousing control is a very important issue for them I imagine. It also needs personalization long-term, and no one’s doing that right yet.

Fab Mobile App

Existing Businesses:

Evernote Logo

It’s hard not be impressed with what Evernote has done this year. The company broke 20 million users and raised a $50 million Series D round that values them at somewhere north of $500 million. That’s only scratching the surface though. They bought their first company Skitch, and then helped it pass 3 million downloads on Android. They also started pursuing a multi-app strategy using the Evernote brand. In addition to Evernote and Skitch, they released Evernote Food and Evernote Hello. By separating these new functions as new apps, they get the benefit of using their brand to promote usage while not having what these apps do become hidden as just one of the many features of the main Evernote app.

Path Logo

Path launched in 2010 as a photo sharing service. Its differentiator was that it was a private network for sharing special moments with those close to you. Well, that value proposition really limited their virality, and photo sharing became a crowded space with an increasingly clear winner with Instagram. Path had already rejected a $100 million acquisition offer from Google, they needed to regroup. Path 2, as it’s been called is more of life a journal than photo album. The most important thing to know about it is that it is beautiful. The mobile app is at the forefront of interaction design, and their home page is even innovative (go check it out right now, seriously). The most impressive parts to me are the + button that is so easy to use the and going to sleep/waking up experience (though it does remind me of a joke from Kicking and Screaming). This update still makes me wonder if Path as a company is just a bunch of talented designers without a real problem to solve, but ever since the relaunch, my Path has been way more active with fellow users, so they are gaining traction.

Solving for the Clingy Girlfriend, or Don’t Say Goodbye to Your Users Post Order

When developing your website, the most important thing not to do, but the easiest thing to do is to forget you’re designing for users. And these users are unlikely to be all the same, unless you’re targeting a very specific niche. As you think about developing relationships with your different types of users, it’s important to figure out the different types of users you have and their motivations. It helps me to think of them like girlfriends.

For this post, I’d like to talk about a specific type of user, or a specific type of girlfriend. This is the user that’s been a few times, and they are into it. They love what you’re doing. They’ve professed their love to all their friends. They love it so much that they want to spend more time using your site. This is great, right? Exactly what you wanted. Check. Got this one covered. Let’s go after the users who are less engaged.

Not so fast. A specific type of problem can arrive with these types of users, if you’re lucky enough to get them (and you are lucky to get them). Let’s say your site is designed for “get in, get out” type of use, and it does that well. Well, these users have been there, done that many times. They want more. And you’re not designed for that. They’ve read the About Us page, liked your Facebook page, read your blog, all that. They’re actually thinking to themselves, “I like this site so much. How could I spend more time with it?” Sound familiar? You’ve got yourself a clingy girlfriend.

The problem with these types of users if you’ve designed your site so well for them that they outgrow it too quickly. There are some key ways to keep the engagement high without them over committing and burning out on you though. Coincidentally, many of these tactics are used during the onboarding process for websites/mobile apps, but they are just as, if not more effective, post-order for these types of users specifically. It is helpful to think of it as if you are continuing to onboard these users even though they are most sold on the product, and if there is no additional way to onboard them, you need to invent some. A few key tactics I’d like to describe for this:

“What you can do now” suggestions – Has the user completed an order? Don’t consider the session over. Tell them they can now that they’ve completed whatever the task was they completed. It’s very similar to a quality onboarding process. Some suggestions:

Invite friends
Fill out your profile
Visit your Facebook page
Go to your Twitter account
Read your blog

Great example (post-onboarding): LinkedIn
Status bar suggests other way to complete your profile.

Great example (onboarding): Dropbox
Checklists that are stricken through once completed.

“Post-usage” features – Another way to keep this type of user engaged is to create some sort of mini-experience post order for them or asking them to take a more active role in the site. They should be designed as ways to lose time. Some suggestions:

Asking them to moderate content
Shuffle of non-personalized content
View what others have ordered
View statistics for the site for the day/week/month

Great example (post-onboarding): Quora
No picture. When Quora was inundated with new users, it manual review process for each answer was running way behind. So, for many users that had show good engagement, Quora began asking users to review answers on the sidebar of the home page.

Great example (onboarding): Hunch
Hunch asks random questions to get to know you better. They have thousands of them.

“Did you know/Ideas for next time” suggestions – This can be a great time to educate users on features that are for more advanced users, additional use cases for the site, or even company background. Some suggestions:

Download our mobile app
About us
Related content OR Expose different product category
Advanced feature tutorial
Charities you support

Great example (post-onboarding): Chegg
Chegg asks to plan a tree on your behalf after an order.

Great example (post-onboarding): Qwiki
Qwiki suggests different Qwikis to view after finishing a Qwiki.