Making money out of friction

Making money out of friction

by Marc Dowd, June 9, 2015

The reason why people don’t do many of the things they set out to do is what is nowadays called “friction”. In the good old days it would more likely have been called “laziness”. Friction is the gap between intention and action caused by it being difficult to do, or difficult to remember to do.

Reducing friction is a vector of disruption.

You may have read about the “dash button” from Amazon. What it does is reduce friction when it comes time to order a new product. Essentially it is a little stand-alone button that does just one thing: it orders a replacement for you. So in the case of TIDE you stick it by the washing machine, and when you see the soap powder running out, you simply press the button and lo and behold 4 hours later the soap powder turns up at your door.

I guess you can see where the friction is eliminated, right? You don’t have to remember that you needed soap powder. You act in the moment and complete your “job to be done” to use the innovation jargon. The friction in this case would normally be taking one, or several actions, to complete the purchase at a later date. Not to mention forgetting to do it. Writing a note to self. Firing up the computer and navigating to do the ordering, or worse still waiting until next time you go shopping and then hoping you did not forget the soap powder.

Ok you may hate the idea of a button for every product.

I have found that a lot of people do. They find it trivial and wasteful and geeky.

You might find it the first step towards this dystopian (but funny) vision of the future: Video

To Amazon of course it is very beneficial – they tie in anyone who is happy using it as a customer; they certainly won’t be buying soap powder at the supermarket any more. They can also leverage the market they create with the suppliers. Once this gets going, you can imagine the bargaining power of ‘locked in customers’ they will have when they offer to push one brand versus another.

OK, so that is how it works (or doesn’t – time will tell). Why is it important?
The dash button reduces friction in some interesting ways and it also brings together and combines “vectors of disruption” (technologies that change the way we do things, and create options for new business models that flow from them) in a new way that can be used in other situations.

So which vectors of disruption are involved?

  • Friction reduction – A desire for less friction in life is a behavioural pattern and if it becomes a habit can be very significant.
  • Personalization – this is an interaction where the actors are implicit – the buyer and the seller don’t have to confirm identities or location or even quantity or price.
  • Simplification – the interface has been simplified to the ultimate “one-click”
  • Data collection and manipulation – this system uses data previously collected and agreed upon. It creates data that can be used by the seller to leverage other benefits (negotiation)
  • Cheap to produce and trivial to configure hardware – the button itself has to be cheap enough to manufacture and distribute. The configuration process both by the buyer and seller has to be easy to complete.
  • The internet for free – this system uses the home owner’s existing wifi to send the messages to Amazon. Lots of vectors of disruption use the internet use the internet and hardware assets of the end user to provide services that would have been cost prohibitive if all the hardware had to be built in.

That is the thing about vectors of disruption: the more you combine them, be they technology innovations or new business models or new behaviours, the more disruptive they become. What I have found is that one innovation can make something better but to be truly different one needs to apply several vectors of disruption at the same time.

Do you know Saul Kaplan, the author of the “Business model innovation factory”? In it he describes different levels of business model innovation with this chart:

To me the (positive) disruption always happens in the top right quadrant. Where do you think the dash button sits? I think it is more of a tweak than anything else.

It does not combine sufficient “vectors of disruption” to really be disruptive

Actually the dash button concept is not that new; it was done a few years ago by one of my clients at the time who had large contracts for public cleaning. They realised that both the cost of visiting empty public waste bins, and of ignoring bins that overflow in the summer, was high. Their contract was for cleanliness not bin-emptying schedules. As a result they developed GSM-connected public bins like these that “phoned home” when full, thus allowing for a dynamic collection route which was both cheaper to run and in line with their business objective.

The difference between self-emptying bins and the dash button is that the dash button has added a couple of new vectors of disruption to bring the price down and this has made it applicable to a larger audience. I expect it will earn Amazon a lot of money. I also predict that the vectors of disruption used in the dash button will be combined with a few more to produce a truly distinctive and disruptive business model, quite probably in another sector.

In my view it is fruitful to combine innovations in your market with vectors of disruption and new business models to generate new business objectives – the worst that can happen is product innovation and the best is a disruptive leap forward.

Not enough companies are dedicating time to this sort of innovative thinking.

With my clients we do a variation of guided brainstorming to re-combine vectors of disruption and their knowledge of their markets to produce new business concepts that can be tested for viability. It’s not rocket science but it does produce amazing results.

1 Comment


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    • June 4, 2016

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