Tag localized design

Size Does Matter: our Web 2.0 Expo Talk

Size Does Matter – Click to view on Slideshare

Alex and I were fortunate enough to be able to present something at Web 2.0 on Thursday of last week, and I’m happy to report that it went off without a hitch. We spoke about a topic that we’ve both been passionate about for quite some time: that a focus on smallness is the way when it comes to developing and understanding marketing ideas.

In the talk we step through nine connected examples from a variety of industries, sciences and arts, all supporting the idea that conceptual smallness is a defining factor for success in today’s economy. It starts with the idea of differentiation, which at least for us is a constant driver to create incredibly specific things. The way we see it, if people have millions of things to visit, look at, and purchase, whatever we make has to be f*cking awesome if it’ll get any attention. Not groundbreaking at all, I know, but we continually see examples of products and marketing things designed for massive, anonymous audiences. So at least some people aren’t getting the picture.

The nine stories go something like this:

  1. People think they’re really special. And not necessarily with good reason.
    We found an article by Christopher Hitchens a while back that talked about the “narcissism of the small difference,” an idea that in places of great conflict, the belligerents tend to share a very tiny differentiating factor that’s caused the hostility between the groups. Without getting into that here, it points to an important human truth: that we think we’re really special, and really different from other people, even though we’re all pretty much the same when we get down to it.
    Which gets us to a design problem.
  2. Specific, localized design wins.
    Based on an article that we found in The Economist, Panasonic was in a pickle last year, posting a ¥52BN loss in the second quarter. Remarkably, they decided to take their design department and spread them around the world – from 98% designed-in-Japan in 2009 to 15% in 2010 – with incredible results. By designing electronics that took into account local needs (energy efficient A/C units in India, where it’s hot, and fancy-looking ones in China, where they’re a status symbol), their emerging-market sales led them to an ¥82BN profit gain in Q2 2010. It’s easier than ever, and less expensive, to design things that are particular to an individual environment.
    Which takes us to rodents.
  3. When competition increases, organisms tend to get smaller.
    These two chaps, Lomolino and Perault, studied patterns among rodents in temperate rainforests. They found that as the habitats for shrews shrank over time, the body size among the sample shrank as well. Which makes sense, right? If the habitat is smaller, food supply goes down, and those animals with a smaller “caloric budget” are better able to survive. Our interpretation: habitats for ideas and products are shrinking in response to competition. Which doesn’t have to be a bad thing…it just means that it’s okay for there to be a Foursquare, a Gowalla, a MyTown and a Facebook Places in the marketplace. It also means that we shouldn’t expect $100M valuations for products that are easily imitated and tweaked for an audience or a space.
    Which takes us to Fiji.
  4. Small doesn’t have to mean unsuccessful.
    Alex found this crazy study by a fellow called Godfrey Baldacchino (from whom you can get a Masters of Arts in Island Studies) that talks about the relative success and failure of innovation and business on island nations. Apparently most islands are hamstrung by a lack of resources, a dependence on trade agreements, and isolation from other thought leaders. But the study holds up Fiji as an example of how to get by: steal thought leaders from other places, luring them with your island charms; create deeper relationships with customers by not only telling them that your coconut soap is excellent, but by showing them where it’s produced and introducing them to the folks that make it; and reframe value propositions in terms of rarity and distinction from competitors (see Fiji water). Our message here: be like an island nation. Embrace your constraints (in fact, add new ones if you’re a huge company and can do whatever you want) and use them to create smaller, more focused things than you would have otherwise. Because a constraint-free environment is an environment that fosters inaction.
    Which brings us to a core human failure.
  5. In all things – politics and poverty included – we tend to be awed by the big picture.
    When people look at income stratification around the world, they tend to see things in continental terms, or even more broadly in terms of Worlds (First, Second, Third), Groups (Developed, Developing, Under-Developed) and Divisions (North/South, Rich/Poor). Obviously the segmentation is much more detailed than that – see Gapminder – and it’s my contention that a great deal of the failed development projects around the world are a result of “big” thinking: applying something that worked in one country to the problems of another, without seeing the little reasons why the problems differ. Without going off on a rant, it’s important that we avoid the Mashable-promoted population-based thinking to substantiate our clients’ “need” to get onto a new platform. It’s great that Facebook has half a billion people, or that Foursquare had a whole shitload of checkins last night, but that’s not really what’s valuable. It is valuable to find the small groups within these platforms that exhibit similar behaviors. For instance, the 450 people checking into schools every morning might be exceptionally valuable to a company that makes digital research tools. And so on. Unfortunately, most big organizations aren’t set up to talk to very small groups of people, stemming usually from some inability to measure the impact of those people on their bottom line.
    Which brings us to microfinance.
  6. Microfinance uses highly specific objectives and payment terms to enable smooth flows of capital from one person to another.
    I think we can all agree here that Microfinance is a big, positive development made possible by digital tools. But in our view, it’s the mental models they use/support that lead to their success and the comfort people have in the use of the system. Donors feel good because their contribution tends to be small and the terms of the use of their money are made very clear. Further, the results are clearly communicated back to the donor/sponsor, completing a feel-good feedback loop that’s absent from most “big” charity. This is a model worth adopting. It’s not that big charity is bad, it’s just that it’s almost always unclear where a donor’s dollars are going, how they’ll be used, and the specific returns they’re creating.
    Which brings us to the real reason why banner ads suck.
  7. We all know banner ads suck. But they mostly suck because they’re in big, anonymous places.
    We found an old study on banner ads that attempted to qualify what makes them work and/or not work. And while it was from 2003, it points to an important truism: adding interactivity, animation, emotional appeal, and incentives didn’t bolster an ineffective ad; however, better targeting did have a measurable impact. On the whole, among the 10,000 ads studied, the B2B-focused ads tended to be in more targeted, smaller locations. And they did way better than the B2C ads, which showed up on big sites, trying to garner the attention of the masses.
    Which brings us to the failure and success of Joshua Bell.
  8. No matter how good your product is, if you put it in front of a big, lame audience, it’ll fail.
    This one’s pretty simple, and I think is explained particularly well in Alex’s slides. So I’ll keep this brief: when Joshua Bell performs in front of an audience at Carnegie Hall, he sells out the place at an average ticket price of $100; when he played as a busker in a D.C. metro station, he made $32. Don’t try to be all things to all people, and don’t try to get an uninterested, anonymous audience interested in your shit.
    Which brings us to the rise of focused, premium content.
  9. When it comes to media and entertainment – things people want to watch, read and hear – the more focused, the better.
    This one started when I heard Jimmy Wales speak at the New Museum a few months ago, where he brought up the idea that if media is used as a performance metric, people are getting smarter every year. Turns out this is the thesis of Steven Berlin Johnson, who uses the evolution of popular culture (viewed through the lens of TV) to show that people today desire media that is complex and intellectually challenging…even if not in the traditional sense. And I can dig that. I Love Lucy reruns, for me, are unwatchable and feel generic, while Seinfeld, Curb, Arrested Development, the British version of The Office and even It’s Always Sunny continue to be fascinating. To me (and I’ve not read Johnson all the way through), it’s focus that makes them great. All the aforementioned watchables are intently focused on the needs of a particular audience… in the same way that NPR and The Economist (and even Monocle, in its own special way) continue to deliver a consistent and unique experience year after year. And financially… it seems to make sense. In the midst of a continuing crisis for the media industry, NPR has doubled its market share and The Economist made $92M on a circulation of 1.4M. They’ve clearly got it going on.

And that’s it! All the examples, we feel, provide useful fodder for the argument that a sense of conceptual smallness is the way of the future. Hope you fine folks at Web 2.0 enjoyed the talk.

EDITS:

For further reading on this topic, check out these awesome Planningness decks.

The first is from Mike Monello (Campfire) and Griffin Farley (BBH) on Propagation Planning.

Thinking not about the people you’re reaching, but about the people they reach: that’s what we’re trying to get to. Totally dig.

To that end, here’s a redesigned version of a couple of their charts.

The second is from the smart fellows at Made By Many:

I rather like the idea of a Minimum Desirable Product. It’s almost exactly what we’re arguing for in our talk.

Five Interesting Things, v2

1. And the winner is… (Why prizes work, and why they don’t)

Amid all the crowdsourcing discussion – whether things like CrowdSpring are good for creativity or not – there’s an interesting thing happening at the upper end of the innovation “market”, where big businesses (Netflix) and big investors (the X Prize folks) are offering up big prizes to people/groups able to solve a big problem. Fly to space twice in a two-week span? 10MM dollars awaits. The same is out there for whoever is able to design a car that gets 100mpg. This is old news, I know. But The Economist points to a couple interesting factors that complicate my opinion on crowdsourcing.

  1. This is really old news. Governments have been doing it since the early 18th century (see: The Longitude Prize), offering bounties to those creative/brainy souls able to solve a particularly vexing public problem.
  2. It’s good for everyone; even the losers win in the long run. “A study led by Liam Brunt of the Norwegian School of Economics scrutinised agricultural inventions in 19th-century Britain and found a link between prizes and subsequent patents. The Royal Agricultural Society awarded nearly 2,000 prizes from 1839 to 1939, some worth £1m ($1.6m) in today’s money. The study found that not only were prize-winners more likely to receive and renew patents, but that even losing contestants sought patents for more than 13,000 inventions. Today’s prizes appear to have a similar effect. The Ansari X Prize, for example, has attracted over $100m in investment into the (previously non-existent) private-sector space industry.”

2. Games, science, human smarts, oh my! (Why games are good for the world)

If you haven’t heard of FoldIt, and you work in marketing, you’re missing out on a really wonderful “for the common good” gaming case study. Again, via The Economist.

“[The] game is Foldit, in which players score points by squeezing proteins into the most chemically stable configuration. Proteins, which are the building blocks of life, come in long chains of molecules that work properly only once they have folded into their final, three-dimensional shape. Figuring out how they fold correctly is thus crucial to understanding biochemical processes, and to creating new drugs.

“To test the players’ shape-predicting ability the researchers used ten proteins whose structure had been discovered but not yet made public. The top humans outperformed the state-of-the-art Rosetta software in five puzzles, drew in three, and lost just twice (in both cases neither got close to the final shape). People excelled at problems requiring substantial remodelling, which often meant making the structure temporarily unstable, a ruse shunned by Rosetta. They were less good at starting from scratch, ie, a fully unfolded protein. That suggests that a balance will need to be struck between the inputs of man and machine.

“Intriguingly, few of the best performers were biochemists. To entice the non-scientific, the game comes with upbeat arcade music, bleeps, pops and colourful star confetti when you succeed (at least in the tutorial stages which tested your correspondent’s protein-folding skills). Players also get nifty tools with names like ‘shake’, ‘wiggle’ or ‘rubber band’. These tweak the basic structure into the optimal shape, though some players preferred to do that by hand.”

I heard about the game last year, after I’d been pointed to the Nature article about its launch. So it’s interesting to see some stats (57,000 players) and results on its success, especially given the abstract of the Nature report: “The integration of human visual problem-solving and strategy development capabilities with traditional computational algorithms through interactive multiplayer games is a powerful new approach to solving computationally-limited scientific problems.” I love the idea that gamers are better than computers at some tasks that require intermediary, iffy logic jumps. I also like that the scientists weren’t the best at figuring things out. That makes me feel good, and, yay interdisciplinary studies!

3. Japanese firms push into emerging markets… (Small product development > big product development)

Alex and I are doing a talk at Web2.0 about why smaller is better. Which is to say that more customized, more specific designs – in digital and real things – is better. The Economist this week writes about Panasonic’s recent changes in design philosophy to a more focused, more regional approach:

“To prosper on the new frontier, Japanese firms must adapt. Panasonic, an electronics firm, is overhauling both its products and its organisation. Instead of maintaining strict management divisions by territory, the company now thinks about product lines by temperate and tropical climate zones. Executives from South America visit their peers in Malaysia each quarter to swap ideas.

“The firm increasingly relies on local engineers to redesign products for local tastes. ‘If Japanese engineers did it, they would create a Japanese product,’ explains Hitoshi Otsuki, who heads Panasonic’s overseas operations. Now, only 10-20% of the products it sells in emerging markets are developed by Japanese teams, down from nearly all. ‘This is totally revolutionary for us,’ says Mr Otsuki.

“In Indonesia, Panasonic found that fridges need big compartments to store lots of two-litre water bottles: Indonesians boil water to purify it in the morning and then place it in the fridge to cool. They need less space for vegetables, however, since they tend to buy and eat them on the same day.

“In India, where power is unreliable, Panasonic is developing air-conditioners that operate with little energy. And because Indians tend to run the air-con all the time, the motors are designed to be quiet. In China, air-conditioners are a status symbol, so Panasonic’s are big and colourful enough to catch the neighbours’ envious eyes.

“In the most recent quarter, emerging-market sales helped Panasonic post a profit of ¥84 billion, reversing a ¥52 billion loss in the same period a year earlier. The firm expects revenue for electronics and appliances from emerging markets to increase from 25% of its total today to 31% in 2012.”

Totes. Design things that are relevant for local behavior and local needs. As the cost to create new things comes down, the value of creating something that’s incredibly specific – does one thing, and does it very well – goes up.

4. “This Generation Gets Alter Egos”

NPR had an interesting piece this morning about Gaga, Katy Perry, and assorted female pop-stars with alter egos. The author, Zoe Chace, makes the leap from the rise of alter-ego use to a generational mindset shift due to the use of digital profile-creation tools:

“This generation really gets alter egos. They also have a personal stash of identities for different situations — they’re constantly deploying different versions of themselves online: one for Facebook, one for Twitter, one for going out at night. … This is a modern phenomenon, but that doesn’t mean it’s new, says Judith Halberstam, who teaches media studies at the University of Southern California.

“‘Look back at the 19th century at people like Oscar Wilde,’ she suggests. ‘Oscar Wilde may well be one of the early people who created a public persona for himself and then was happy, when called upon, to perform this role of the glib dandy who was full of one-liners.’”

I’m not sure I’m 100% bought-in to the idea that the internet gets the credit for the glut of personas used by celebrities/singers, but it’s an interesting point nevertheless. Identity play is certainly a fertile field, and one that’s absolutely worth exploring…but I don’t think we can definitively say yet that things have changed. What say ye, dear readers?

5. Post-Digital Briefs

My digital friend – with whom I had the pleasure of sharing a conference-speaking-roster last year at Planningness – Gareth Kay has a great presentation up on post-digital creative briefs.

Here’tis:

For the past couple years, I’ve felt increasingly iffy about the idea of a “brief”. Every format felt reductive to me, constraining, whatever. And I had the pleasure of working with a creative group at Odopod that didn’t need briefs (instead, they needed inspiration), so I could put together a messy book of thought and let them run with it.

That said, I rather like Gareth’s framework:

GET the audience

TO do, feel or think something

THROUGH the power of an idea

If you can’t summarize your thoughts using the above, you probably haven’t thought it through enough.