Building A New Product? Here’s What You Need To Ask!

Imagine you’re using a product and something bothers you about it. Maybe it takes 5 clicks to do anything. Maybe it works but is kinda ugly and clunky. “I bet I could make a new app that’s 15% better,” you think. “Instant business success!” This is a fallacy. Thread 👇

This lesson took me many failures to properly appreciate. Especially since it seems like a given: if millions of people use a mediocre service every day, and I come along and make the same thing but better, won’t they obviously choose my product? But no.

Product builders are trained to ask: “Is our product better than the competition’s?” What they should be asking instead is: “Is our product better enough to motivate a change in behavior?” There is a big difference.

Instead of asking “Is it better?” than the alternative, we need to ask: 1) How much better? 2) How painful is the alternative? 3) How easy is it to switch?

Example: when I need a ride, I’ll open up my default ride-sharing app. If the closest driver is more than 8 minutes away, or the price is too high, I’ll immediately switch to the competitor. In this case, switching costs are low. So 15% better on time or $$ gets my business.

Example: everyone’s hyping up this new note-taking app. I download it. Seems great. Some better features than my current app. But my current app is fine. And wow will it be painful to port over my huge archive of past notes. Sorry, not switching.

“Switching costs are high” is the reason why bad legacy software persists in older orgs. If the next-gen stuff isn’t 2-3x better, it can’t overcome the switching pain. It still might be 30-70% better though. Which is why new co’s will readily adopt it.

Also, “good enough” is its own barrier. I used to rattle off all the ways YouTube could be better, but didn’t care enough to upload to other video services that have come along over the years.

(This is also why every week there seems to be a new and “better” to-do app being launched, which are often fun demos or show pieces, but I can’t recall any having huge traction in growth.)

As a designer, it was hard to accept that people wouldn’t always clamor to use something that was more usable, more understandable, more delightful. But purely aesthetic improvements rarely make something >15% better (unless status is involved). Functionality matters more.

Of course, 15% better will usually find *some* audience, usually the most avid and discerning users of a service. But just because you can find the first 500 customers doesn’t guarantee wider appeal.

So, to recap: just because you can build a service better than anything else out there doesn’t guarantee you will have a hit. Understand: “Is it better enough to motivate a switch?” 1) How much better? 2) How painful is the alternative? 3) How easy is it to switch? Fin.

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