The issue that most concerned my friends this week hasn't been Sudan or the Republican debates or even Troy Davis. It was the change in format of Facebook.
Tech companies are facing a new challenge. They need to innovate to meet new demands. Netflix has to get away from being a lending library of DVDs to a service that provides streaming video. It's much cheaper. They don't have to pay dudes to stock warehouses and to stuff red envelopes. Facebook needs to offer more services in order to gain new subscribers and to expand their business.
But people don't want their tech services to change. Facebook has to look like Facebook. Netflix means a red envelope in the mail.
Ultimately, people don't like change. They don't like the learning curve of figuring out a new interface or new terminology. I'm having trouble figuring out how to cook in my new kitchen. I'm pouting that my pots don't fit nicely in the new drawers and I don't know where to put the coffee pot. I have to remember which cabinet has the knives and which cabinet has the wine glasses. Thinking hurts.
No tech company wants to lose its edge or, even worse, become irrelevant. WordPerfect, WordStar, the modem, floppy disks. If you miss a step, you're become the dodo bird. At the same time, people get cranky about change. It's amusing to watch these companies figure out how to meet new demands, while retaining loyalty of its users.
As the world is speeding up, we're losing our footing.
Apt. 11d 
Clearly, you have an obligation as a citizen to refloat the economy by buying new pots which fit. There, that was easy, wasn’t it?
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I guess I think technology companies need to get off their high horse to a certain extent. If a company wants to remain relevant, they need to think up something we actually *need*. People will withstand change to get a new feature they truly care about. But for a rebranding? No way.
Just because it makes life easier for NetFlix to get rid of the red envelopes, why should I as the customer care? If I want red envelopes, they should continue to give me red envelopes … in addition to their streaming offering.
Which, BTW, sucks. The whole point of NetFlix is you can find any movie ever made. Totally absolutely not the case with the streaming offering. Why don’t they go fix that?
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But the nature of the beast is that you will become irrelevant; wordstar will die, the floppy disk will disappear. If you want your company to survive (rather than be replaced by another company) you have to think up something new, the new thing that will replace the old thing.
I think with all the complaints about the behemoth that Microsoft is, people often don’t understand that the people at MS understand that, and yet they struggle at figuring out how to do the next big thing, that won’t see them disappearing in favor of another company.
From the consumer’s point of view, though, it doesn’t really matter if Microsoft dies because we have cloud word processors through Google.
I think the problem w/ new things at Facebook & Netflix & Mint/Quicken is that those companies were basically premised on bait and switch model. They draw in users (not really consumers, because they aren’t really paying for what they use). Then, at some point, they have to turn their business profitable (or profitable enough) and that requires changes that people don’t want. Why? well not just ’cause it’s new, but because they were never willing to pay enough to make the product they used sufficiently profitable.
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Facebook and Netflix have been profitable.
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I don’t know if it is new or not*, but I’m going to go old-man-waving-rake on the airlines if they add one more thing I have to decline when I buy a ticket.
* For the past three years, I’ve only flown Southwest and they seem closer to sane.
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“If I want red envelopes, they should continue to give me red envelopes … in addition to their streaming offering.
“Which, BTW, sucks. The whole point of NetFlix is you can find any movie ever made. Totally absolutely not the case with the streaming offering. Why don’t they go fix that?”
Amen to that. The streaming offerings mostly stink on ice mostly.
Here’s a cute Netflix cartoon, explaining the problem with their business model:
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“They draw in users (not really consumers, because they aren’t really paying for what they use). Then, at some point, they have to turn their business profitable (or profitable enough) and that requires changes that people don’t want. Why? well not just ’cause it’s new, but because they were never willing to pay enough to make the product they used sufficiently profitable.”
That reminds me–some time ago, Netflix got busted for creating artificial delays in their DVD delivery service in order to keep costs down.
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This summer FB changed my homepage interface a couple times and it was making me insane. Then *poof* one day it went back to the old FB. They did nothing during that time to my 18 year old daughter’s page. We thought they might be testing out future changes, but couldn’t figure out why they would choose a middle-aged woman to test. Then she pointed out that she has the language set to French. FB still hasn’t changed her homepage. Maybe the French dislike change even more than us.
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Eventually, the Farmville people are going to be so crucial to Facebook that Facebook won’t allow you to block that stuff like all sane people do now. Then, either Facebook will die or everyone will see just how pointless the lives of their friends and family are and the human race will end due to embarassment.
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They’ve changed Facebook? Guess I’m not a heavy user.
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I’m not arguing about the need of a company to continue to innovate. I am saying that companies aren’t doing that – they have confused “new” with “better”. As MH notes, offering to book a hotel as well as your flight is “new”. But it drives lots of users completely crazy. This is not the way to move your company forward.
There are many ways to innovate – the creation of new products or offerings is just one of them. You can also choose to “grow” as a company by keeping features in place and improving quality, lowering price, etc. So NetFlix could be focusing on finding a way to get everyone next-day red envelopes. Or making it even cheaper. But instead they’ve decided to cut off the red envelopes. Who knows why – but I’m suspicious that the folks at NetFlix probably like the profit margins associated with new products. Growth via new features/offerings keeps the relatively expensive marketing and R&D people fully employed. It also allows more room to forgive organizational sloppiness. (“Oops! We forgot to include the expense of server room cooling in this ROI calculation! Oh well – we’ll make it up out of our fat margin in less than 3 months.”) As opposed to raising the profile of the operations or QA functions, where they would experience stress if they committed to faster turn times or lower cost. And if that’s not the textbook definition of ignoring your customers’ needs, I don’t know what is.
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I could care less about the red envelope, they’re throwing that up as a smoke screen. The fact is if I want DVD and movies, I now have to pay twice as much. Give me the same service for the same amount of money. Don’t talk about rebranding, red envelopes, yada yada and think I won’t notice you are ripping me off by doubling the price without offering me anything new.
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Aargh. I could not care less about the red envelope….
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Everybody offers to book a hotel and a rental car when you buy a flight. I’m talking about the big offences. In addition to all the crap you have to do to buy the ticket, an airline that rhymes with “knighted” wants to sell you stuff when you are just trying to get a boarding pass. You can get nicer seat for $19 and it isn’t obvious how to say “no” since all the cheap seats are full. Then the checked bag fee. Then the faster security option. Then the box you have to check to not get ads to print with your boarding pass.
I really hate not flying Southwest.
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As the world is speeding up, we’re losing our footing.
Thankfully, speed is overrated.
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