One extraordinary thing I have found studying the history of success in a lot of successful businesses is simplicity.
Businesses succeed by keeping things simple and easy to understand and use for the customer.
To drill down even further, what they do is increase ease of use and lower user wait time.
Market share is what percent of the industry your business is in that you hold as a total of everyone in it, including your competitors. To gain market share or increase the quality of the product or service, sometimes it is as simple as keeping it simple:
You reduce unnecessary wait time.
Many businesses have grown bloated or slowed in their profits because they got overly complicated.
Can you think of that have?
Here’s a few: Infusionsoft, League of Legends, Runescape, and Yahoo.
These are services, software, and video games, that have got overly complicated for the new user as they kept adding on new features.
To this day, Google.com is super simple.
Two buttons. (Honestly, I think they could cut the Getting Lucky button)
And this is Google we’re talking about. There’s a thousand things you could be tempted to add to the homepage.
And that’s precisely what Yahoo.com did.
And who won in that search engine battle?
Tinder is a dating app that swept the world by storm.
Because it did not require a lot of time to understand and use.
A new user could easily understand:
Swipe left if you think they’re hot, right if you don’t.
If you both match, you chat.
Kevin O’Leary from Shark Tank
Shark Tank is a show where these millionaires (and sometimes billionaires) sit in a room and decide on whether or not to invest in business ideas and businesses.
There’s one episode where one judge, Kevin O’Leary, goes ballistic.
This guy has a decent business selling pies, but…
He’s stressed out working hard producing numerous different flavors of pies.
Even though one flavor accounts for 95% of his profits.
Kevin blew up and told him to stop making the other flavors. And double down on the one flavor.
Sometimes, variety is not what you need.
You need to drill down on that one thing that will double your profits. You don’t need 50 items on your menu when 49 of them are taking up 90% of your time and making you 1% of the profits.
- One Thing by Gary Keller talks about this (quick review: decent book. talks about time management by drilling down on that one thing; arguably I liked Essentialism and 7 Habits of Highly Effective people better. All 3 are worth the read on managing your time)
- Kevin O’Leary’s book Cold, Hard Truth – good book about money and life. 4 out of 5 stars. There’s a part about getting a pre-nup, gold-diggers, and marriage that’s 5 out of 5 in terms of advice given.
Five Guys follows Kevin O’Leary’s formula to a tee.
It’s my favorite burger place.
And I’m sure they’ve been tempted to add more items to their menu because of how large and successful they have become.
However, even to this day, they have kept their menu very minimalist.
Businesses That May Need To Work On This:
This is a social media type app created by billionaire Mark Cuban.
I think he’s a cool guy, but here’s my thoughts on the app after trying it out for the first time from the perspective of a millenial:
Too overly complicated. Too many things going on.
There’s too many bells and whistles and features and things you can press.
I wouldn’t know what it actually did if I just stumbled across it.
I knew ahead of time because Mark described it succinctly in a video: send text messages that are erased moments later.
It’s a Snapchat for text messages.
And yet, when you open the app, it’s this monster of things and hard to figure out.
Apparently, you can send videos and photos too with other features.
People are busy.
You have to expect that they’re only to give your app 30 seconds or less.
Some tweens and millenials I’ve seen will give it much less than that: 10 seconds. 5 seconds.
You have that much time to get them to understand it and like it.
Burbn – Instagram’s first prototype:
Instagram succeeded by listening to their users.
The first model was called Burbn. It failed.
It was overly complicated. A jumble of confusing features.
How did they succeed?
- They used analytics to monitor what their users did.
- They keep tweaking their app based on how users were using it.
- They found people only used it to share photos.
- They double downed on JUST photosharing.
- They saw people liked filters, they added filters.
- Simplicity was their main focus: They made is to that you could post a photo in 3 clicks.
They saw a GAP in the market and drilled it down: Facebook’s app sucked at the time for photo-sharing. Hipstamatic was the other big competitor, which had good filters but bad photo-sharing.
Too many people try to make a social media app, just to make one. There has to be a gap in the marketplace and need. You have to listen. Stop trying to make one simply to make money or drive up your ego.
That’s why I think Casey Neistat’s beme will fail too. It’s just too similar to Snapchat. People haven’t been going crazy about it because it doesn’t provide much greater value than other things out there.
Make it 10 times better than anything else out there
Billionaire investor Peter Thiel said in Zero To One, there has to be a 10x order of magnitude greater value than your competitors.
A small change or advantage or convenience isn’t good enough for people to turn their heads or leave the brand that they’re loyal to.
My family and many others were really against Apple and iPods. My parents said that using earbuds were bad for your ears.
Years later, we all own many of their devices. Like many others, the change occurred because of the magnitude of convenience Apple’s products provided beyond any competition.
An iPhone is literally a computer in your hand that lets you browse the internet, listen to music, watch Youtube videos, go on social media, text, call and more from almost anywhere on a simple, convenient touchscreen.
It’s just too appealing.
make It Free. Even If It Mean’s That You’re Not Making Money.
It’s simple and obvious, but not everyone does it. Not everyone is willing to.
Companies, especially big ones, are pressured by stock analysts and investors who think short term. Although it may sound easy on paper to “think long term”, the pressure from ill-informed people for short-term profit results can cripple a leader who can’t ignore them or doesn’t know the importance.
Alibaba vs. Ebay is one of the best modern examples.
Alibaba is now a monopoly and one of the largest Internet companies in the world but it wasn’t always this way. The founder was rejected from over 12 jobs including KFC. He was laughed at by the “experts of the Internet” back in the 90’s.
Alibaba used to be a tiny company competing against Ebay, who had 90%+ of China’s market share.
How did he do it?
He did what Ebay did but decided to charge zero percent in fees and commissions. Ebay was unwilling to do so because of its size and all the reasons I just described.
In the short term, people made fun of Alibaba. For years, they called Alibaba stupid because they weren’t making any money. In fact, they were losing money keeping up their services.
But over time, they pushed the foreign giant away.
Over 5 years, Ebay slowly lost market share until they went from 90% to 0%. Despite Ebay trying to form a partnership, the native Chinese company had won.
The lesson is clear. For the Internet or tech industry, certain niches are winner-take-all. Alibaba forced Ebay out by playing the long-term game by giving the best service to its customers possible: a free auction service for goods. In the short term, it seemed like they were making a stupid move because they weren’t making any money.
In the short term, it seemed like they were making a stupid move because they weren’t making any money. But over time, customers naturally flocked over to the free service that the more expensive service did.
Also, be careful of “Internet experts” especially on such a new field.
Note: this advice is exclusive to the Internet tech companies listed. It probably won’t hold true completely to other industries. Sometimes, raising the price gets more sales surprisingly. I think this works especially for tech-based mass-scale companies because they depend on tons of people buying small purchases. The few dollars really matter there. For something like a luxury product worth thousands, things could be different. However, the core principle of doing what your customers will like best may still apply.
Make It Cheaper
Walmart is a great example of this.
Sam Walton and his company were the underdogs. People don’t know that. Just like Microsoft, they had competitors who were 10 times bigger when they got into the game.
Sam was smart. He realized how discount retailing was changing the world. Rather than letting it run his little shop out of business, he got into discount retailing himself.
Even to this day, we know his slogan: “Everyday low prices.”
That level of quality products and affordable prices was so appealing that they made up for the small profit margins by sheer volume.
Costco has used a similar strategy in recent times with bulk purchases and more premium products to great success.
Henry Ford did the same thing with the Model T car. He kept reducing the price of his car while almost all of his hundreds of competitors raised prices every year.
Note: This strategy isn’t always the best way. Sometimes, if you want to position yourself as a premium brand, you don’t want to be cheap. The point is to understand the big theme behind all of this, which I’ll go more into detail in the conclusion.
Long story short: provide long-term convenience and value to the customer beyond anyone else.
Conclusion and special note
You don’t have to use these suggestions listed. In fact, they may not exactly apply to your industry.
What should be done is to understand the big theme behind all of these: exceptionally convenient, valuable customer product and service.
Companies like Walmart or Alibaba did this by having ridiculously low or free prices. Other companies like Five Guys or Tinder this with simplicity and ease of use.
Netflix made things convenient by providing affordable, instant-access to movies.
See how you can do this 10x better than your competition. In the short term, nothing will change. In the long term, they will flock to you.
- Give the customer and user the best experience possible. You can do this by lowering the price, increasing customer service, increasing quality of the service, increasing quality of product, and many more areas.
- Make things simpler and easier to understand and use for the first-time user and repeat user.
- Listen to what customers and users tell you. Your opinions and ideas are often not what customers actually prefer.
In conclusion, how can you make things simpler and easier to understand and user for the first-time user?
Some industries and businesses may be better off with complexity.As a special note: this is not a conclusive rule that applies to every business under the sun.
It may depend on your specific situation.
It’s a theory.
However, I think it personally holds true for a lot of businesses in a lot of industries, as I’ve illustrated.
An example of how it would not work would be a company that has decided to go after the market of gamers, customers, or software users who delight in advanced, complicated services or video games.
Arguably, other businesses like Facebook didn’t focus on simplicity. Facebook focused on growth and their service wasn’t exactly simple: there was photo sharing, chat sharing, and all sorts of stuff (though it was still fairly simple and easy to understand).
And you can tell my examples have been mainly social media and tech based, so it may not apply outside of this area.