43 Comments

Summary:

The crowded consumer Internet has made it difficult for startups and services to get attention from the people who really matter: the end users. The question is: How do you get that much-needed attention? Not with VC dollars. Instead it is something less tangible.

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Sitting on the very bumpy flight back from New York to San Francisco, I finally had a chance to catch up on all the hullaballoo around the newly launched Color app. With the stunning amount of cash the company raised from white-shoe venture firm Sequoia Capital and the big-name founding team, not to mention the help of a VP of communications and marketing amongst its ranks, team Color got everybody’s attention.

But it was for all the wrong reasons. I say that because the only attention any app needs is from the end users. After reading Jason Kincaid’s write-up, I downloaded the location- and socially-aware photo-sharing app, but found it as barren as the endless sands of the Sahara. Some say that will change in time as more people show up on the service.

But lost in this back and forth is a bigger problem encompassing the entire web and mobile ecosystem. The Color app faces the same challenge as many of today’s mobile apps: How can it earn a user’s attention in a world that is increasingly crowded with options? In fact, you can extend that argument to any consumer service: new appliances, new devices and media entities new and old.

These services are like the flickering, flashing and constantly changing billboards that plaster the buildings around Times Square: It’s almost impossible to focus on any one of them. Some are bigger, some are brighter, but most are completely forgettable. That, unfortunately, holds true for today’s web and mobile services.

Many entrepreneurs and their backers don’t quite give the proper weight to “attention.” If a new startup can carve out time in our Facebook- and Twitter-dominated, CityVille-playing, Lady Gaga-listening, Rebecca-Black-video-sharing day, then it should really be the one to watch.

Instagr.am is one of those apps that managed to figure out a way to squeeze itself into our busy lives. It has several million users now, and only a few thousand of them are what would be described as technology insiders. Similarly, Beluga (acquired by Facebook), Spotify, Evernote and Instapaper have found a way to draw attention (and thus usage) from its users.

Do they need to displace something from our daily web/mobile app die? I don’t know. I do know that I have not opened PicPlz for nearly a month, despite the service sending me repeated email notifications. Compared to Skype, Nimbuzz gets more of my attention because it allows me to send instant messages to my colleagues via Google Talk. As a result, I end up using its call-out service more often than Skype to place long-distance calls.

Looking at all of these examples, I see two clear reasons why these services have my attention:

  • Happiness (alternately, enchantment)
  • Utility (alternately, solving a problem)

I am currently reading two books that address these issues. Typically, these aren’t the kind of business books I read; I like books that are about explicit learning. Nevertheless, these books were from two guys who are extraordinarily nice and thus worth a read.

Guy Kawasaki, a former Apple evangelist turned self-evangelist has a new book out, Enchantment. When you take away the marketing babble, what Kawasaki is saying is that as long as you delight your customers, they are going to reward you with their attention, and hence their dollars.

Guy learned that lesson from Apple. Most of us think Apple is in the business of making hardware. Nope; Kia and Dodge are in the business of hardware. Apple is in the business of happiness. It’s the first and foremost emotion associated with an Apple product. The rest of the business is just the formality of handing over your credit card to the annoyingly smug guy at the Apple store.

This also applies to Bose audio systems. As an audiophile, I cringe at the very idea of Bose speakers. My brother-in-law hears a simple way to find audio bliss. The world, fortunately for Bose, is full of people like my brother-in-law.

One of the reasons Instagr.am works is because it has that “happiness” attached to it. When I see my friend’s baby boy, it brings me joy. I see Mathew Ingram at an ice hockey game, and it warms my heart to see him enjoying time with his family. I reward Instagr.am with my attention because it makes me happy. That is its utility.

This is the emotion at the heart of Gary Vaynerchuck’s idea of The Thank You Economy, in which the companies that provide the most value to their customers win. It’s a quaint notion, as old as the first bazaar, but somehow it got lost in postindustrial over-commercialization.

When I use Marco Arment‘s Instapaper, I quietly thank him, pretty much every single time. Why? Because he solved a problem for me and made my life more manageable. As a result, I gladly upgraded to the paid version of the app. And when I’m not saving or reading articles using Instapaper, I’m telling everyone I can tell: Try it. That’s what the “thank you economy” really is: me doing marketing for a product I have only an emotional or utilitarian connection to.

I look at all these great tablets coming to market. They are feature-laden, power-packed, and have bundles of computing oomph. And yet, they will all struggle because the makers are all looking through the wrong end of the telescope. My friend Pip Coburn emailed me, pointing out that people with iPads are the ultimate commercial for the device. The more people who have them, the more people want them. “People will trust other people who do not carry an agenda to build revenues and manipulate you,” Pip wrote. Bing!

Don’t believe me? Put all the things that are part of your daily routine into these two buckets — happiness and utility — and you will see it for yourself that in the end those two are the driving forces behind a successful app, service, device or media property.

So when it comes to services like Path, PicPlz and now Color, I’m not a hater. It’s actually worse. I don’t really care. Why? Because these apps lack the empathy that drives constant interaction. You can’t buy empathy with a $100 million valuation or $41 million in the bank. And you certainly can’t ensure happiness with a resume and an executive team.

Uh oh!

Something is wrong with your Wufoo shortcode. If you copy and paste it from the Wufoo Code Manager, you should be golden.

  1. George Tills Friday, March 25, 2011

    Ha! Pretty sobering. Can’t I just like something because it’s cool? This idea came to me on facebook http://kck.st/hPs3XQ
    . it may have been because someone was intentionally trying to sell me on it but, I still like it. And if it brings me a taste of joy, doesn’t that contribute to my overall happiness?

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  2. When you say “Bing”, are you happily advertising the search engine?
    :D

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    1. Haha! Funny since I rarely use it ;-)

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    2. Andrew Macdonald Friday, March 25, 2011

      lol. good one!

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  3. Sorry about the bumpy flight. I’ve considered having a Turbulence Forecast app commissioned, but given the high levels of crowding in the app store and the expense, I think I’ll stick to the web for now.

    http://www.turbulenceforecast.com/
    and for mobile
    http://m.turbulenceforecast.com/

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    1. That is quite possibly the worst designed website I have seen this year. I’m an idiot for going but jeez man. Felt like I was back in 1993.

      Om’s right though. One breakout of this theory offers the vices as drivers of app use (“will it get me laid?”)

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  4. You nailed it OM. As soon as consumers connect emotionally to a product/service that also turns out to be very useful, it’s instant success! This is where marketing comes into play. The problem is, most companies advertise as if we were robots. We’re human beings!!! We utlimately NEED to love the stuff we use. The architect of the Matrix would have never understood the success of the iPad for instance, since other tablets spec better.

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    1. Thanks. Glad you enjoyed the piece.

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  5. I couldn’t agree with you more, Om. The Color guys being able to raise 40 million baffles the hell out of me. My question for Sequoia Capital is, why? Why would you give these guys 40 million? I completely understand their decision to give Facebook a few million to keep it going. It actually had fanatical users/fans, was growing at an insane rate, and it was easy to see how they could eventually monetize it.

    Successful social media platforms present a chicken and egg situation. The platforms are useless without a bunch of users, and you won’t get a bunch of users until the platform is useful. In other words, you can’t predict what will be the next big thing in social media before the service in launched.

    As for the comments on having a successful company by delighting your customers, the internet has changed the game and leveled the playing field on small vs large companies. Now that its easier for customers to vote up or down on your product or service, and easier to recommend your product or service to complete strangers; the best products or services will win out. There’s no longer a need to raise 40 million dollars to start up a company. You just have to kick ass in ways no one thought possible.

    -A.J. Horst
    President – 3Boost
    http://3boost.com

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  6. I enjoyed your insightful comments.
    It appears to me that until 2 years ago most people thought about photos in the old fashioned ‘Kodak Moment’ ways and built applications like iPhotos, Picasa, … In the last one year, every application seems to believe that people want to ‘share the moment and forget’. I feel that people developing photo apps from old school thought that we collect photos that are taken very carefully and are willing to spend lots of time organizing those. And the new school thinks that photos are ephemeral. Technology has definitely brought a transformation in this area — but people are people. They want to enjoy and share the moment as well as save them for reliving, revisiting, recalling and reflecting on those later.

    One dimensional apps that only believe either in instant or in old fashioned album management will not survive in the long term.

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    1. Well said Ramesh. I think there is definitely an opportunity to create a whole different kind of experience. I think we are forgetting that mobile is not just another platform and it has more personal dynamics in it.

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      1. Exactly. And if you use android, I would love to share with you something. If you use iPhone, then give me 2 weeks and I would love to share something along this direction.
        Have not been happy to see such a wonderful opportunity not being utilized. Would love to explore and contribute something in this exciting space.

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    2. exactly. much has been forgotten about life in the photo app race.

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  7. Agreed. A good friend of mine once told me, you have to deliver a payoff in the first minute of the first session, then within the first week, then within the first month. If you can get users to experience each of those milestones, then you will have a user locked in for life (or at least a long, valuable period of time).

    That said, the whole point of betting on a team is that they have the chops and the perseverance to figure it out. If a Y-Combinator alum launched Color, people would be tripping over themselves to hail its potential. Perhaps Color’s biggest mistake was a PR one to announce their funding alongside their product launch, and the funding drew all the attention and, errr, colored the way people viewed the app. If you think about Color as a product on its own, that can evolve over 2-3 years with the runway that they have, and let’s pretend that instead, that $41m is raised over that period of time, then our expectations may be more calibrated. The reality is, the Color app today is not the product of $41m of cash spent, but yet we’re evaluating it as if it were. They have their work cut out for them for sure, and I’m not saying they will figure it out, but they have a long time to and this is just the beginning.

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    1. These days you will not get too much time to experiment, it’s more hit or miss environment. You will see a lot of clones in a short span of time.
      For me, personally, the biggest disaster is when CEO is trying to explain what is the application about. If I’m unable to figure out purpose of it in the first couple of minutes on my own, game is over (for me).

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    2. Mike

      I really don’t care about the Money/PR or anything. I have been in the valley too long to make that my sole point of reference.

      I still believe in only one thing and that is the only thing that matters to me, which is as you said — payoff in the first sessions and then constant incremental payoffs

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  8. Guy Kawasaki Friday, March 25, 2011

    Om,

    Thanks so much for mentioning Enchantment. May you receive and cause much happiness in the world!

    Guy

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    1. Thanks Guy! Great read, by the way.

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  9. We shared much of the same sentiments on The Thank You Economy and the relation to mobile marketing- http://mcloughlin.ca/insights/the-thank-you-economy-is-mobile-media-marketing/

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  10. Om,

    Completely agree. The Chat With People Nearby space has gotten some press recently (i.e. The WSJ yesterday) including apps that just launched or are in restricted beta. However, WhosHere, has been getting the attention of users:

    - closing in on 3 million users
    - used in 150+ countries
    - 2 Billion text messages sent across our network (announced yesterday http://bit.ly/ffvsOm)
    - Average of 40 sent messages per user who logs in on any given day

    Is it working as a business? We’re profitable.

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  11. Om,

    You just hit one out of the park. Nice piece of writing! I wonder what this suggests for the plethora of “viewing” or magazine reader apps that have recently appeared. I just don’t use them now. I tried a few of the well know magazines and even the NY Times app on the iPad but I keep coming back to the using browser to read the NY Times. Same for twitter and even Facebook; web is fast and easy; one place to work from. Not everything needs an app I guess is the message.

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  12. “Put all the things that are part of your daily routine into these two buckets — happiness and utility — and you will see it for yourself that in the end those two are the driving forces behind a successful app, service, device or media property.”

    You nailed it. About six months ago, my first app failed to gain any traction. It was an app to improve one’s driving by *delightfully* pointing out trouble spots. It failed miserably because it did not fit into either of these categories – utility or happiness.

    My next app, released yesterday, has been met with great success. Why? I aimed at solving someone’s problem of utility with the best possible execution, and it totally worked. I’m getting the kind of attention and financial gain I felt (at the time) I should have received with my first App.

    Unless you’re addressing someone’s “Desiderata”, or inner-most desires, you’re doing it wrong. This does not mean market research -> product necessarily, but it does mean taking risks toward ideas that you believe will enhance someone’s life in a way that they see as meaningful.

    BTW, my first (unsuccessful) app was “DrivingBuddy”. My recent, successful app is “Droplist ToDo”.

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  13. I came away with very much the same feeling after trying it out yesterday. In dumping my gut reaction, I wrote this:

    “If what I get from Color doesn’t get more interesting to me the more I use it — if I don’t get more invested in the people or the content over time — what’s the point in using it regularly? But if Color backs away from the “right here, right now” focus and lets you follow (or give weight to) particular people, block others, and indicate what kinds of pictures interest you, then what draws me to Color rather than one of the many other options available?

    My bet is that (in addition to a significant UI rework) Color picks one of three elements to layer over the current model:

    1. Adding a more standard “follow your friends” component (most obvious, seems least likely as that’s what they’re pretty explicitly not right now).

    2. Adding in distinct time-agnostic “right here” and location-agnostic “right now” views. These would still fit with the local/social approach, but offer a little variety.

    3. Adding a more explicit collaboration or interaction component. This seems like more of a stretch, but it’s the most intriguing possibility. Makes me think of Douglas Coupland’s book “A,” where people collaborate through phones to make “earth sandwiches,” which I won’t try to explain here — the book’s worth a read, anyway.

    We’ll see.”

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  14. Om, thank you for this. I’m in the midst of beginning a startup, and was wracking my brain on the monetization side of things. This article confirmed a few things, inspired a few new thoughts, and the citations of Pip drove it all home.

    Thanks again, and if the venture takes off, I’ll let you know and buy you a beer. :-)

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  15. Leanne Waldal Friday, March 25, 2011

    Nicely written. Along with happiness and utility, an app/product/service needs to work. For example, the square app provides, for me, excellent utility and occasional happiness, but it too often fails so I gave up using it. Often, when an app/product/service fails me, if I find value in it, I end up trying it again after 6-12months. Sometimes, not often enough, the company has improved/fixed it, much to my delight. Evernote is that way for me. I love and depend on it now but 4yrs ago it failed me too often. 3 cheers for instapaper – particularly the smart help they have for installing bookmarklet in safari on iPad.

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  16. On an unrelated note, Om which set of speakers would you recommend to an aspiring audiophile :-)

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  17. A couple of recent examples of companies delivering a good experience:
    - I signed up for a FedEx account. They sent out a welcome kit with personalized information. (Overnight, of course!) What better way to instantly show the value.

    - I had an issue with my Bank of America credit card — they didn’t properly credit miles to my account. I talked to a guy on the phone who promised to take care of it. The same guy called me back and said it’s taken care of. “When can I see the miles on my account?” “You should be able to see them now.” Sure enough, they were there.

    When so many companies are doing their best to squeeze every penny out of the customer service experience, you can stand out by going the other direction.

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  18. Great thought-piece. Its interesting to note the shift in marketing. The companies which make people happy and own mind-share don’t view marketing as a separate entity from the product: Customer delight/happiness IS the new marketing and is baked into the product itself.
    Seems like the message is that traditional marketing still has its use, but it isn’t THE way to market a product anymore, inherent customer enchantment is.

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  19. Om, ever try being an entrepreneur? almost everyone would love to sell “happiness” but it always starts with something more tangible – easy to pontificate on elements that make a product successful, very hard to come up with a product that starts with a vague definition. Oh btw, we just launched a mobile, social application – http://bit.ly/streamzoo-food – started and ended with a product idea. Will it make users happy? don’t know, you tell me. I am just the dreamer.

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    1. Hmmm

      GIven that I have been building a business for past five years and having turned it into a substantial business, I think I am beyond the “trying” stage from an entrepreneurial perspective.

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    2. Not too sure about the happiness part but, going by first impression, it’s guaranteed to make people tear their hair trying to figure out what the heck it does. The value proposition in terms of “solve a pain” or “create a gain must be clear”, otherwise, there’s no point in building a product even if the product concept is crystal clear.

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  20. Om,

    I prefer Instagram over PicPlz and Path as well, but it was also the first of the three that I started using and has the most people I want to follow on it. I’m curious as to why though you seem to point out that Instagram succeeds because it gives you joy, but PicPlz and Path do not succeed?

    Don’t PicPlz and Path have the same function to give you joy by seeing a friend’s baby? Is it just that your friend isn’t using those applications?

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  21. Om, almost everyone would love to sell “happiness” but it always starts with something more tangible – easy to pontificate on elements that make a product successful, very hard to come up with a product that starts with a vague definition. Oh btw, we just launched a mobile, social application – http://bit.ly/fvZl36 – started and ended with a product idea. Will it make users happy? don’t know, you tell me. I am just the dreamer.

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  22. Nitin Nanivadekar Friday, March 25, 2011

    > Apple is in the business of happiness.

    Om, you made may happy with this discovery.

    >You can’t buy empathy with a $100 million valuation or $41 million in the bank.

    As I have held myself for years from launching for not having money, this is the best advice.

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  23. as I read through the article I was wondering how long it was going to take before Om turned it into a Pro-Apple bit, sure enough about 1/2 way through he dropped the A-bomb.

    +1 !!!

    do you write articles anymore that dont include your love for Apple? it’s kind of late now & your on the backside of a downward trend.

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  24. Why can’t companies innovate? I’m tired of this social networking services which all it does is the same thing. Just change the UI and poof… they claim it to be another innovative web application…

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  25. The best, most concise article on why some apps make it and others do not. I am currently developing a mobile app called “Marketfiesta.com”. This app is for buying, selling and negotiating with your social network providing happiness (goodwill) and utility (getting rid of unwanted items for cash). Stay tuned – we are close to first release!

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  26. Same way….

    I use more Instapaper (an Ubernote) because available on my Windows 7 PC, my iPhone and my iPad…. Instead of Scrapbook, free add-on only available for Firefox…

    DropBox killed (for the most usages) my USB keys…. I found FullDrop for my jailbroken iPhone / iPad giving the power of full data exchange beetwen my whole PC Phone world… Instead of just some kinds of files like photo, docs and PDF…

    Just for information, i found a free Windows app on SoundForge for printing from everywhere with DropBox. Exemple : i write a text with QuickOffice on my iPad, and i save it in a “PrintBox” directory created in DropBox (if connected to web)…. If my PC and my printer are on at home (or Office), the doc will be print immediatly…

    And a nice free service when you want to exchange a text or a web link with any connected device and any friend : pastie.org

    When i was young, i remember : Always in the cloud ! Toujours dans les nuages ! In french for dreamers with the head outside school….

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  27. I realy appreciate.

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  28. Om
    The two reasons you state are the researchers on consumer psychology and marketing research state as Hedonistic and Utilitarian consumption.
    What I would like to add are:
    1. It is not either -or, there are always components of both in making purchasing decisions. Usually one of the two is the dominant reason, not the only reason. It is fair to say that even a purely utilitarian product has to meet a minimum threshold of hedonistic characteristic and vice versa.
    2. The classification and distribution is not uniform across all segments. This varies significantly across different segments – which takes us to what Clayton Christensen described as “what job are we hiring the product for”. So we cannot take a purely hedonistic product and position it as such to all segments.
    3. For the same product even for the same customer segment the dominant reason for buying it can switch from utilitarian to hedonistic (and back and forth) due to changes in time, technology etc.

    In the successful and no successful products you quote, I still considerable randomness and unpredictability of outcome because the marketers are not taking an active role in positioning the product.

    Regards

    -rags
    http://iterativepath.wordpress.com

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  29. I love it when the tech world “discovers” the basics of consumer marketing. Apple does exactly what Chanel has been doing since the 1920′s (yes, it is THAT old)–it sells “Hope” not perfume. Why do consumers pay thousands of dollar for a an Omega watch that has $200 worth of labour and materials? It certainly isn’t about the utility of a watch! In fact, all of the companies you mention exist because they have solved a headache or problem, even if you didn’t know you had one! And, that includes the emotional as much as the tangible. Nothing new–pick up most successful marketing case studies or read presentations from the more insightful marketing professors (in consumer or B2B) and you will find the same thing. So, perhaps basic branding and marketing is alive and well!

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  30. Thanks for another thoughtful article, Om. I will be having a look at both Guy Kawasaki’s and Gary Vaynerchuck’s books later on Kindle.

    You brought to mind my experience with GetGlue a while ago. I tried it for a few months, but eventually gave up on it because it felt like I was doing a lot of work telling it my likes and dislikes and not really getting anything useful out of it that I couldn’t obtain by other means. One of those being Last.fm, which I’ve been using for years, and which I find invaluable for discovering and purchasing new music. Another service that I find invaluable is Google Reader, for keeping up with not only my favourite sites but also friend’s blogs. That is how I came to this article, by the way – read it on the iPad using Reeder, sent it to Read It Later, then retrieved it on my PC in Firefox. :)

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  31. (Happiness and utility) – “It is a quaint notion, as old as the first bazaar, but somehow it got lost in postindustrial over-commercialization.” – Bingo!

    Getting into theories – the Kano model which is a theory of product development and customer satisfaction developed in the 80s by Professor Noriaki Kano basically cites 3 categories of customer preferences – Attractive (aka Happiness) and “One dimensional” & “Must be” (aka Utility).

    Yep, the buckets remain unchanged but they are sadly buried under “shorter time to market”, “shorter market window”, “technology & design complexities” etc. and of course the good ol’ over commercialization and “hey, I’ll miss the boat” :-)

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