9

How to Proposition-Simplify

You need a very product-oriented culture.1

Steve Jobs

A good taxi driver may be 2 or 3 times

better than a bad one. But a good designer

is 100 or 200 times better.2

Steve Jobs

Good design is as little design as possible.

Dieter Rams

Product design is nearly everything in proposition-simplifying. The objective is to make the product a joy to use: first and foremost, easier to use; then, if possible, more useful and more aesthetically appealing.

Three steps to...

Figure 2: Three steps to start a proposition revolution

If a new product or service is more useful and artistic than rival products but does not make life easier for the user, then there has been no proposition-simplifying. The product may be wonderful, but the ideas in this book probably will not apply to it. For example, the Porsche 911, introduced in 1963, gave a different driving experience from that of any comparable sports car. It was also a work of art. But the 911 did not make driving easier; probably the reverse, because, with its rear-mounted engine and unusual weight distribution, it required considerable skill to drive. Aficionados may see that as part of its appeal, but it disqualifies it from being a form of proposition-simplifying. Nor was the 911 any easier or cheaper to make than comparable cars, so it was not an example of price-simplifying, either. In general, simplifying is neither necessary nor natural for luxury products, such as Porsche cars and Rolex watches. Luxury markets are not price sensitive, and complexity is often part of the appeal of the product.

By our definition, all examples of successful proposition-simplifying involve increasing ease of use. This attribute is the most important in leading to greater customer adoption — if a product or service is easier to use, more people will use it. This is invariably the case, whereas proposition-simplifying does not always involve making a product more useful and/or more aesthetically appealing (although this often happens too).

Step One: Easier to Use

The essential first step — make the user experience easy and simple — is more than the sum of its parts. It requires empathy with the user and a genuine simplifying mission.

Who do you think would make the better designer of electronic devices? Someone with a natural affinity for computers, even back in the day when operating them required real skill? Or someone who found that experience extremely tough? Listen to one of the latter:

“I went right through college having a real problem with computers. I was convinced I was technically inept . . . Right at the end of my time as a student I discovered the Mac. I remember being astounded at how much better it was . . . I was struck by the care taken with the whole user experience. I had a sense of connection via the object with the designers.”3

The speaker was Jony Ive, the son of a London silversmith. He went on to become a product designer and was the man behind the iMac, MacBook Air, iPod, iPhone, iPad and Apple Watch. If we look at how these devices (and those in our other simplifying case studies) were made easier to use, we see five major themes:

Eliminate

Remember that Steve Jobs “made devices simpler by eliminating buttons, software simpler by eliminating features, and interfaces simpler by eliminating options.” In designing the Mac, he eliminated all the function keys and cursor arrows, features that all other computer manufacturers thought were essential. Users were forced to use the mouse instead, which they soon learned was a much more elegant way to move the cursor around the screen, once they got used to it. Ive, whom Jobs called his “spiritual partner,” also started his career at Apple by eliminating. “We wanted to get rid of anything other than what was absolutely essential,” he said. “We kept going back to the beginning again and again, “Do we need that part? Can we get it to perform the function of the other four parts?” It became an exercise to reduce and reduce, but it makes it easier to build and easier for people to work.”4

Intuitive and Easier

Simplicity for the user is complexity concealed. Ive says he aims “to solve incredibly complex problems and make their resolution appear inevitable and incredibly simple [to the user], so that you have no sense how difficult this thing was.”5 The iPad is a superb illustration. Have you sat in a doctor’s waiting room or on a plane and seen a toddler playing games or watching cartoons on an iPad? It is literally child’s play. No stumbling blocks — no causes of possible frustration — are allowed on the device, which is the reason why you can’t print from it.

Faster

Almost every device is getting ever faster to use, but some are faster than others — faster to boot up, faster to operate, faster to service. Products and services can create a new market or niche they then dominate for decades merely by performing an operation much faster than their rivals. The Polaroid instant camera was introduced in 1948, and the Polaroid Corporation then dominated the market for four decades, selling 14.3 million cameras in 1978 alone. Eventually, of course, it was superseded by the digital camera.

Today, AUTO1.com lets Europeans sell their cars quickly and easily by making a cash-up-front offer to buy them, and at the same time gives car dealers access to inventory delivered within hours. Bringing rapid network efficiency to the used-car trade has helped create one of Europe’s fastest growing businesses, backed by the authors.

Nespresso is another prime example. Its machines make high-quality coffee far faster than any rival system of comparable quality. They are also simple to use, stylish, and cleaning them is a doddle.

Smaller/Lighter/More Portable

The Walkman, introduced by Akio Morita’s Sony Corporation in 1979, was easier to use than other cassette players, but the big advance was its portability. Previously, people would walk down the street with huge boom-boxes perched on their shoulders. The Walkman subtracted the integral loudspeakers, replacing them with small headphones, as well as the ability to record. As a result, and by using its in-house technicians’ genius for miniaturization, it was possible to make a thin and light machine that could be carried anywhere. The Walkman also played magnetic tapes, meaning it had superior sound quality than rival formats, even though the machine was much lighter and more compact. In the face of stiff competition from Toshiba, Aiwa, and Panasonic, the Sony device remained dominant in its segment and highly profitable until the late 1990s. It declined only when the iPod and iTunes took over by reinventing and transcending all the advantages of ease of use, miniaturization, and portability.

Easier to Obtain

iTunes also made music much easier to buy. It was no longer necessary to make a trip to the record store, album tracks could be purchased individually for the first time, and users could choose from a much wider selection than any record store could possibly stock. Spotify has since taken this process a step further by giving its users instant access to millions of songs through streaming.

Of course, making products easier to obtain is not a new idea: as we saw earlier, in the 1920s General Motors introduced credit for customers who wished to trade up to more expensive cars. But there are always new means to make a product more accessible. Unlike traditional car rental firms, Zipcar — founded in 2000 — allows its customers to rent vehicles by the hour, and it prides itself on making the whole hiring process quick and hassle-free. It operates on a membership model: once you become a member you can unlock the car using your membership card or a mobile phone and drive away within seconds. The cars are also parked in street-side bays, closer to most customers than the majority of car rental offices. Avis Budget Group acquired Zipcar in 2014 for around half a billion dollars.

The dramatic and controversial success of Wonga, provider of “pay day” loans in the UK, Europe, Canada, and South Africa, is based on the company making cash advances much easier for qualified applicants to obtain. Wonga greatly simplified the whole process of securing a short-term loan and then paying the principal and (very high) interest back to the company over the next few weeks. Indeed, regulators have argued that Wonga not only charges excessive interest rates but has made loans too easy to obtain. Recently, the UK and other countries have introduced caps on the interest such firms may charge.

Step Two: More Useful

There are also five ways to make a product or service more useful:

Some propositions are more useful across all five of these dimensions. For example:

Other propositions tick most of the boxes:

In some cases, however, one or two of the ways to increase usefulness stand out:

Although greater usefulness is present in the large majority of proposition-simplifying examples, in some cases it is not important at all. With Wonga and Zipcar, for instance, ease of use (specifically the ease with which the product may be obtained) is paramount; the basic usefulness of the product (short-term loans and car hire, respectively) has hardly changed at all.

Figure 3 illustrates the ways in which certain companies and products have increased usefulness. Does it prompt any ideas with respect to your own product or service?

The signature characteristic of proposition-simplifiers is that, in all cases, hard usefulness is added without making the user experience more complicated. Moreover, boosts to the product’s usefulness are always combined with increases in its ease of use.

Innovations employed by...

Figure 3: Innovations employed by some proposition-simplifiers to make their products more useful

Step Three: More Aesthetically Appealing

As you will recall, we define “art” as anything that enhances the appeal of a product that cannot be reduced to hard usefulness or ease of use. Art is to do with the appearance and texture of a product or service, how it makes the customer feel, and how it turns consumption into a great experience.

Steve Jobs understood this better than anyone. When making the Apple II, he took inspiration from Cuisinart’s revolutionary food processor, introduced five years earlier. With its rounded, transparent shapes, the Cuisinart is very useful but also a beautiful artefact in itself. Jobs repeatedly told his people to make Apple computers “look friendly.” Hardly anyone understood what he meant, but that was part of the advantage he had over his rivals. It is hard to imagine IBM’s designers — competent as they were — understanding the concept of a “warm and friendly” machine. Jobs explained: “We’re really shooting for Museum of Modern Art quality.”8 He urged this principle to be applied even to invisible components, such as the motherboard: “I want it to be as beautiful as possible, even if it’s inside the box. A great carpenter isn’t going to use lousy wood for the back of the cabinet, even though nobody’s going to see it.”9 First impressions were crucial: “When you open the box of an iPhone or iPad, we want that tactile experience to set the tone for how you perceive the product.”10

More than nine out of every ten proposition-simplifying cases we have identified have involved a substantial addition of art to the product mix. One of the earliest examples was Alfred Sloan’s decision to change General Motors’ car models every year — the first time anyone in the industry had displayed such a commitment to style and fashion. “The appearance of a motorcar,” he said, “is a most important factor . . . perhaps the most important single factor.”11

Today, web-based companies such as Google, Twitter, and Spotify lavish a great deal of attention on how they present themselves. In a prophetic article in the New York Times in 2007 — when Myspace was three times larger than Facebook — the latter’s “clean, uniform appearance” was contrasted with the former’s cluttered layout. A user of both said that he checked Facebook several times every day but hardly look at his Myspace account any more. “Myspace is so messy and there’s so much spam. It’s not worth it,” he said.12

Art can simplify or it can make a product more complicated. You should aim for the kind that simplifies, that communicates so directly and intuitively that words and other explanations become redundant. With the desktop icons on the first Macintosh, and the touch-screen capability of the iPod, iPhone, and iPad, we see a marriage of art and technology that not only beguiles users but makes their lives easier and richer. The best simplifying art is important not only in its own right but because of the hard benefits it generates in terms of convenience and utility.

The Vespa scooter shows how art can combine seamlessly with ease of use. Introduced in 1946, conceived to be both a work of art and an intensely practical machine, it was designed to be extremely easy to use for its well-dressed riders. Men in suits and women in ankle-length skirts were able to ride the scooters without any risk to their expensive clothes. The patent documentation said the motorcycle had a frame “with mudguards and engine cowling covering all working parts” so that it would offer “protection from mud and dust without jeopardizing requirements of appearance and elegance.” In the 1953 movie Roman Holiday, Audrey Hepburn rides side-saddle on Gregory Peck’s Vespa. In the sixties it was still a style icon, publicized by the Beatles and featuring in Fellini’s La Dolce Vita.

Another product that uses art to reinforce ease of use and practical value is the Dyson bagless cleaner. It is easier to use than a conventional vacuum cleaner because there is no bag to replace. It advanced performance through its patented cyclonic separation technology. And it embodies simplifying art by letting you see what it is picking up, so you realize what a good job it is doing.

So, art is usually a very important element in any proposition, but it can vary enormously from product to product. Whichever form it takes, though, the “artists” and designers who are given the task of creating a new product should understand clearly that their mission is both to simplify and to make that product a joy to use. Therefore, hire the best creative talent you can afford, and ensure that they really love the product before you commission them.

Are Free Services Price- or Proposition-Simplifying?

Cutting the price of a service to zero might seem like an extreme form of price-simplifying. But, of course, the zero price is always an illusion. Free isn’t really free; free is a trade.

There are two common models of this. One is when the consumer is offered a service at zero price but the supplier’s business model relies upon selling advertising. Here, the supplier is buying the attention of the consumer and selling this attention to third parties. Social media companies such as Facebook and Twitter use this model, as does Google Search, albeit in a slightly different way. It’s a very old model, stretching back to the first days of newspapers, commercial radio, and television.

The other option is the “freemium” model, where a basic service is provided free to all subscribers, but premium services incur a fee. This model can be seen in a wide variety of consumer and business software-as-a-service models, from dating sites such as Tinder, to Dropbox and Spotify, to newspaper and magazine websites. Most users prefer to pay nothing and put up with the basic service, but successful companies attract enough premium subscribers to make their businesses profitable. Of course, the “free” price is illusory for those who try for free and then decide to pay for the premium service.

The basis of competition is not price, but proposition. The winning dating site is the one that offers the most attractive service to its target market. The winning search engine is the one that most users choose to use because they like the way it works. And this is facilitated by our three (not free) friends — making the service easier to use, making it more useful, and making it more aesthetically appealing. The rules for free services are precisely the same as those for any other form of proposition-simplifying. The fact that the service can be free — for a certain group of participants — facilitates entry to the market and allows a large and potentially valuable network to be built, packaged and sold to a different set of customers.

Conclusion

To proposition-simplify, you need to provide a product that is a cut above others on the basis of three criteria — make it easier to use, more useful and more emotionally appealing. If you can do that, you will enjoy both high growth and high margins, which in turn will lead to significant increases in cash flow and company valuation. The jackpot comes when proposition-simplifying spawns a new mass market. When Steve Jobs returned to Apple in 1997 and resumed the process of proposition-simplifying, the firm was valued at $2.25 billion. At the time of writing, Apple was worth $742 billion — 330 times more.

The Achilles heel of proposition-simplifying is that it can be hard to fend off imitators, or new proposition-simplifiers who come up with unique and even more compelling products. Proposition-simplifying is an innovation treadmill, and very few firms stay on it for more than a decade or two. These days, breakthrough products may enjoy only five years in the sun before they are reverse engineered, imitated, and forfeit both market share and margin. Hence, even successful proposition-simplifiers often achieve a stratospheric market value only eventually to plunge back to earth. The problem is defensibility, or rather the lack of it. On the other hand, as we saw with McKinsey, BCG, and Bain, proposition-simplifying can lead to subtly differentiated competition, with several firms able to lead within their own segments and all generating huge profits in what outsiders perceive to be a single market (whereas in fact it is nothing of the sort).

Price-simplifying works differently. It generates much lower margins, but greater defensibility. That is why many of the most successful price-simplifying firms have been at the top for many years. It is not unusual to see price-simplifiers such as McDonald’s, IKEA, and the budget airlines increasing their market share steadily over time, and they tend to be far more competitively secure than many proposition-simplifiers. The reason for this is that, in addition to undertaking radical product redesign, price-simplifiers redesign the whole business system to attain a low-cost position that simply cannot be challenged by competitors and to erect extra defenses that protect the business over the long term. In the next chapter we explain how they do this.

Key Points

  1. The heart of proposition-simplifying is total product or service redesign — your simplifying should be radical, so that the product is easier to use, more useful, and more beautiful.
  2. The trick is to increase ease of use, making the product a joy to use. The five best ways to achieve this are to: eliminate superfluous features and components; make it intuitive to use; make it faster; make it smaller, lighter and/or more portable; and make it easier to access.
  3. Make the product more useful without making it harder to use; greater utility without greater ease of use is pointless.
  4. Art — the emotional connection to the user — is the third weapon in your armory. The best art not only impresses but makes the product more intuitive.
  5. Proposition-simplifying can lead to huge increases in sales and profits, perhaps sustained over a decade or more. But the greatest challenge is to stay ahead of imitators. The timescale for enjoying a secure lead with new products appears to be decreasing, so constant innovation is necessary for sustained success. The greatest danger is that the innovator’s creative wellsprings become exhausted.