Saturday, August 3, 2013

It's the Use Case, Stupid

I'm trying not to sound angry, but when I find myself engaging in the same discussion repeatedly, I think I am entitled to lose my patience. Very recently, I got into the "order of magnitude" argument once again, in reference to the still-super-secret product I am working on. For those of you who have forgotten, in the tech world, this discussion always starts like:

"If your technology cannot provide me 10 times the performance and/or at 1/10th the cost, I am not looking at it."

If you are inspired to start a tech company and build a new product, you come across this sort of thinking repeatedly. To be fair, it comes from the old school, venture capital reasoning of the pre-bubble era, when the next generation of successful technologies always seemed to share this "order of magnitude" characteristic. Alas, correlation and causation are frequently transposed at the casino. So let's be careful about this:

  1. Unless you can use it, 10 times more of something is not interesting. The reason 100Mbit Ethernet was compelling was because networks were choking on 10Mbit. Similarly, 100Gbit is useless if you have no way to fully utilize it.
  2. Even when successful, the "order of magnitude" products are focused around the use cases that justify their expense.
  3. The world has become so complex, that it is awash with successful new products which clearly are no faster or cheaper than their predecessors. They succeed because they solve significant management problems rather than doing stuff faster. The product I am most recently associated with was exactly like this.
  4. If my widget was 15 times faster, and speed didn't solve your problems, you'd still buy the incumbent vendor's stuff because the risk/reward dictates that you do so.
The real formula for success is use cases. Things that customers can do with a new product that the old  would not enable in a meaningful way. Sometimes the use case is the business model. Sometimes it's a new way of managing around an old problem. Finally, there's always the problem you didn't know you could solve, because you never considered the possibility that your IT infrastructure could be made faster. With all of these, the real product question to ask is "Why is this idea so disruptive that the incumbent players would not want (or be able) to copy it for the next 4 years?"

File this one under lessons learned....

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