

The Endowment Effect - brett
http://particletree.com/notebook/the-endowment-effect/

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myoung8
This completely makes sense and in some ways justifies the success of
companies like Apple and 37signals. Rather competing on features, companies
should compete on ease-of-use.

Getting past the endowment effect also comes down to using concrete metrics.
What's more effective? "My product has the latest and greatest features, it is
so much better than the competition" or "If you use my product, it will save
you X amount of time and/or Y dollars"? Obviously the latter. Saving time and
money is a compelling value proposition--they are both easy-to-understand
concepts that cut through consumers' irrationality bubble. Naturally, to be
able to make this claim, you've got to make something that consumers want and
that is also easy to use.

For a great book on this topic, check out Made To Stick by Chip and Dan Heath.

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mynameishere
_You can get a sense of just how irrational buyer behavior really is now that
you understand why people are afraid to leave their overvalued software._

Uh huh. I'd been upgrading FF consistently until I realized that every new
version just got worse and worse. So now I'm done upgrading. I understand that
the "X" mark to close tabs is now on every tab, rather than on the right side
of the pane. So, there: I've missed that ridiculous change.

It's worse with other things. The Java IDE Eclipse starting at 2.0 made a
simple change: The search box defaults to "Case Sensitive", and never _learns_
that I wan't this unchecked. Believe it or not, this destroys my productivity.
So, I've learned not to upgrade Eclipse anymore. I don't care if they add a
million new features--they've effectively destroyed the software for me with
one stupid change.

There is no shortage of people who regret the 2000 > XP > Vista
upgrade/descent path.

I remember the first VCR my family had. _Put tape in. Press play. It works_
Want to try improving on that? You can't. DVDs are a nightmare by comparison.
There's a 15 step process between holding the disc in your hand and actually
watching a movie.

Consumers are more savvy than you think, in some ways. They realize, at some
level, that companies just release the same thing over and over, sometimes
with a new talking paperclip, sometimes with a new talking dog, and it's
otherwise the same. The transition costs aren't worth it.

Of course, I'm talking about upgrades rather than Brand X > Brand Y
transitions. That might actually be worse, since _everything_ changes.

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brett
Anyone else familiar with the book he mentions at the end, _Blue Ocean
Strategy_? The website (<http://www.blueoceanstrategy.com/>) is setting off
all sorts of get-rich-quick-infomercial flags.

~~~
davidw
It's reasonably well known, but I haven't bought it yet. I'd like to, to fill
out this some:

[http://www.squeezedbooks.com/book/show/6/blue-ocean-
strategy...](http://www.squeezedbooks.com/book/show/6/blue-ocean-strategy-how-
to-create-uncontested-market-space-and-make-competition-irrelevant)

But I have some doubts about it. The basic idea is simply to be the first
mover in a new market, rather than fighting for smaller and smaller niches in
an existing market, as far as I can tell.

~~~
myoung8
It's the kind of book you would read at say Stanford GSB or Harvard Business
School--it's definitely reputable.

That said, davidw just summarized pretty much everything a tech entrepreneur
would get out of the book.

All it says is that the wide-open markets are "blue oceans," the competitive
ones are "red oceans." Many of the most successful companies started out in a
blue ocean. Thus, you should opt to be in a blue ocean too.

~~~
davidw
A good book that I read that actually talks about the mental processes
involved in attempting to create something innovative is this:

[http://www.squeezedbooks.com/book/show/5/lateral-
marketing-n...](http://www.squeezedbooks.com/book/show/5/lateral-marketing-
new-techniques-for-finding-breakthrough-ideas)

It takes you through cataloging the 'dimensions' of an existing product, then
changing one or more radically, and going back to look and see if it could
make sense. It's an interesting mental exercise, if nothing else.

