

The Experience Economy - adahm
http://cdixon.org/2012/05/26/the-experience-economy/

======
demian
> _It is no coincidence that interaction design is replacing technical prowess
> as the primary competency at startups. People who create great experiences
> will be the most valuable to startups, and startups that create great
> experiences will be the most valuable to users._

Interaction design is not replacing technical prowess. _Interaction design is
actually increasing the need for technical prowess._

Now, creating a product that is technologically funcional and fulfills
business needs is not enough. It must also fit with the overall user
experience strategy.

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KaoruAoiShiho
>>It is no coincidence that interaction design is replacing technical prowess
as the primary competency at startups. People who create great experiences
will be the most valuable to startups, and startups that create great
experiences will be the most valuable to users.

That's conclusion is a step too far from the majority of the post. Usability
is the most important differentiator when all technology is adequate, but when
it is not the fact that the technology exists is most important.

Though I mean most social media, and even things like Heroku and Parse is
about experiences, but real technology startups like Planetary Resources or
Google care most about technical prowess.

Edit: I just find it somewhat annoying that this article leaps from "startups
choose to innovate in experiences instead of technology" to "experiences
matter more than technology".

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ajessup
I like Chris' writing, but putting aside from the (pretty > prowess)?
argument, I don't feel he has correctly mapped cause to effect here.

The reason that UX has become more critical for _certain classes_ of software
is because (a) consumers rather than business have become the predominant
driver of spending for desktop computers over the last 15 years, and (b)
because the web and app stores removed distribution and sales channels as
competitive advantages, leaving price and experience.

Product design is now more important, sure, but it's because the playing field
has been flattened and because more consumers are buying. NOT because of some
broader macroeconomic trend that can be applied to all markets.

~~~
apinstein
In Crossing the Chasm, Geoffrey Moore elucidates the critical fact that when
selling a product whose economic buyer and end user are not the same person,
you must sell differently to succeed. He is right and there's a reason that
book is like a bible for tech entrepreneurs.

That said, this fact of life when selling to enterprises is what caused me to
permanently exit the enterprise software space. Success requires you to make
crappy software.

Fortunately the SaaS-ification of enterprise has allowed the enterprise world
to mitigate this problem by allowing the actual end users of products to also
be the economic buyer through their monthly budget.

I consider SaaS delivery to be a wonderful financial innovation. I agree with
parent that this change isn't due to macro changes in buyers but rather
innovations in pricing and channel which align incentives in a positive way.

I encourage all of us HN'ers to continually challenge ourselves to find
innovative ways to align incentives for maximum value creation. It's good for
society and tends to be even better for profits.

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plessthanpt05
point taken, though to say,

"The emphasis on experiences also helps explain other large trends like the
migration to cities. Cities have always offered the trade-off of fewer goods
and less space in exchange for better experiences."

...is just false & i certainly don't agree with this assertion -- to each is
own, but i live in a small town in the mountains and it's pretty rad. i love
city life just the same, but the reason most people have moved to cities is
because that's where higher paying jobs typically are located. this essay
makes way too many assumptions.

~~~
Jare
> the reason most people have moved to cities is because that's where higher
> paying jobs typically are located

Yeah, and even that's still just a consequence of the fact that big cities
offer more opportunities, which leads to competition for the best candidates.
I'm still hoping that this connected world embraces remote working and the
trend reverses.

------
ojbyrne
The whole first paragraph purports to describe the "developed world," after
wwII then proceeds to describe conditions specific to the US. Britain, for
example, had food rationing until 1954.

~~~
redwood
Great point... 5 billion people are awaiting the products economy

------
benatkin
This blog post seems a bit lazy, and lacking in true references (a link is
better than nothing but still isn't a great way to cite a source). It raises a
good point, but I'd much rather read an article or book that used proper
references and made a stronger point. I think the book that kawera linked to
might do that.

~~~
ricardobeat
Agreed, it's missing context.

My graduation thesis was around this subject. The book "The Experience
Economy" by Pine & Gilmore is a great start and generally regarded as the
origin for the idea of experiences as products: [http://www.amazon.com/The-
Experience-Economy-Theater-Busines...](http://www.amazon.com/The-Experience-
Economy-Theater-Business/dp/0875848192)

A couple interesting articles:

[http://www.experience-economy.com/wp-
content/UserFiles/File/...](http://www.experience-economy.com/wp-
content/UserFiles/File/Article%20Lapland5.pdf)

[http://www.adaptivepath.com/uploads/documents/apr-005_busine...](http://www.adaptivepath.com/uploads/documents/apr-005_businessvalue.pdf)

~~~
stfu
Well, I would argue that this performance based view has been at least around
since Goffman's "The presentation of the self in evereryday life". Management
research has already been paying close attention to this subject by the
strategy-as-practce research approach, not to mention critical
management/organization research. But this is definitely an exciting area with
very interesting work coming of of that direction.

------
moocow01
I think there is a valid argument somewhere here but a lot of the points are
based on things that can not be taken as fact. For example, the point about
people moving to urban cores is a story that has been reiterated by just about
every city mayor but when looking at statistics its not entirely clear that
that is what is actually occurring... in fact it seems it may be the opposite
<http://www.city-journal.org/2011/eon0406jkwc.html>

~~~
twelvechairs
Your link skirts the issue somewhat (though so does the OP).

The real change that has taken place in cities has not been 'more people in
the [designated 100 years ago] city area'. It would be pretty much impossible
for most of New York city's 'growth' to happen in the city area (at least,
without removing planning regulations entirely). Demand is going up massively
though. The inner-city 'slums' of the 20thC are very definitely not coming
back and have been replaced by areas of affluence, which are pretty
unaffordable to live in for most of the population.

The suburbs are changing too. People are using 'local centres' more, and
paying more to be close to a nice one. So even the suburbs are less 'suburban'
than they used to be.

------
hexis
"Apple, the most valuable company in the world, maniacally focuses on product
experiences, down to minute details like the experience of unboxing an
iPhone."

Sure, they focus on the experience their customers have...using the physical
products they just bought from Apple. I thought it was the conventional
wisdom, by now, that Apple was a hardware manufacturer and they make money by
getting you to buy physical objects. iTunes, iCloud, etc are ways to make
their hardware more attractive.

------
charlieflowers
Here's the honest reaction my brain had as I read the article: "What a load of
horseshit."

I wanted to write something much more civil and detailed about why I think the
article is weak. But then I realized there's a lot of value in just sharing
the honest, immediate gut reaction. Yes, it's harsh, but you don't often get
that kind of honesty.

(And I am aware of the studies that show experiences make us happier than
things -- and I agree with them. That's not where the horseshit is).

~~~
djt
Where do you think the horseshit is? I've been noticing this effect lately in
my business where people don't NEED to buy many things anymore, there are
almost always a much cheaper alternative that will satisfy their needs, but
people are willing to pay a considerable premium to get an experience/emotion.

~~~
charlieflowers
Fair question. Looking back over the article, I pretty much agree with the
first paragraph. And I think the second paragraph may be true -- I've noticed
some changes in my own perspective as well as several friends -- though the
matter is definitely not clear cut. There's still a lot of excess consumerism
in my own life as well as most people I know (everyone I know that I can think
of).

Paragraph 3 bugs me because I've never left a music concert, even for
performers I absolutely love, without feeling that I had just way overpaid and
invested a ton of hassle (fighting traffic, standing in line, etc.) for less
reward than I had hoped for. (Correction: one concert that I got free tickets
to was a fantastic experience, leading to family bonding and inspiration for
life).

And musical recordings are a huge part of my daily life. I don't see musical
recordings vs. concerts as a good example of the product/experience dichotomy.
A musical recording represents a pre-packaged experience I can have whenever I
want ... and that's exactly how it plays out in my daily life.

And the example of cities offering experiences in exchange for other non-
experience goods doesn't work for me. City verus rural is not about experience
versus product. There are experiences you can have in a rural area that are
not available in a city. City people pay money to take trips to rural areas
for "experiences". And of course vice versa. So both cities and rural areas
offer both experiences and products.

The thing that gives me the strongest sense of "horseshit" is the claim that
technical prowess is taking a backseat to interaction design. I can see how it
may appear that way to some people -- and those people are exposed to
observations I'm not exposed to (since I'm not currently at a start-up).

However, I simply do not think it is possible for technical prowess to take a
backseat to anything. Software development may indeed be the most complex
endeavor humanity has invented for itself. The desire to make the experience
fantastic -- an excellent goal -- simply adds more requirements and hence more
complexity. So the most fundamental thing you need in a software company is
technical prowess (or at least, technical prowess is one of the fundamental
things you need, and perhaps there are 3 or 5 other fundamental things you
need as well).

You could certainly argue that technical prowess is no longer enough -- that
developers need to understand "interaction design" too, for example. But
that's different from saying that technical prowess takes "a back seat" to
interaction design.

If you claim that it is more important for a software startup to have access
to strong interaction design capabilities than to have access to strong
technical prowess, then I claim that you're wrong. Of course, only time could
tell which one of us would be right, but I'd feel very confident that the
smart money would be with me.

In summary, I think the focus on the entire experience, like Apple has
practiced for a while, is a great idea. But I felt like the article over-
stated it, and that almost all of the statements the article made in support
of the idea wilted as I read them. That, plus some hyperbole (such as "the era
of competing over technical specifications is over", and that interaction
design is _replacing_ technical prowess), triggered the "horseshit" response.
The article made some pretty big proclamations, what with eras ending and
whatnot, and if proclamations like that aren't backed up well, you risk
triggering a "horsehit" response.

That said, I don't usually go around telling nice people who've shared their
thoughts with enthusiasm that I think there stuff is horseshit. I hope you
don't take it too hard. My first instinct was "horseshit". My second instinct
was to soften that up and sugarcoat it. I almost always follow that second
instinct. But this time, I decided what the hell, why not try a smidgen of
radical honesty and lay out my full, unfiltered, honest reaction. And whether
we agree or disagree, at least you get a glimpse into one reader's reaction.

~~~
JoachimSchipper
This is a good criticism. "Horseshit" still isn't very nice, though; please
lead with this comment next time.

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Tycho
I thought this was going to be about how you need varying levels of experience
to get a job, sometimes unreasonably. Which got me thinking: that's a social
problem that maybe one of these left-field startups could solve. Provide a
service which gets young people 'experience' to put on their CV for when the
graduate and start looking for work. I guess what it would amount to is
internship/apprenticeship arbitrage.

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backbutton
If I get the drift of the article, then I'd say Rejection Therapy
<http://rejectiontherapy.com> is a good example of a thoroughly experiential
product (moreso than say a movie you just watch).

Perhaps it'll be an industry of experiential entertainment that will provide
real alternative to Hollywood and the MPAA.

------
ippisl
The problem with this article is that chris misunderstands the meaning of the
word "experience".

In the context of the research about happiness, experience meant real live
experiences.You usually remember those kinds of experiences, they become a
part of who you are, and you do use memories of them to change your mood.

Products usually have a different happiness charasteristic. They make you
happy but only for a short time and then you get used to them.

Is software products or experiences ? well that depends on the software.
airBNB seems to fit on the product model, like a well designed lamp. Using a
programming language is an experience.

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motters
An experience economy might be a possible post-scarcity form of economy, but
in the world as it exists today outside of the realm of software we're nowhere
close to post-scarcity.

Currently the idea of "experience" being the primary goal is being used as a
political device in order to force unemployed people to work in for-profit
companies without pay for significant periods of time, so I don't think it's a
good idea to take a fetishistic attitude towards experience itself whilst
simultaneously overlooking other equally or more important issues.

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kawera
[http://www.amazon.com/The-Experience-Economy-Theater-
Busines...](http://www.amazon.com/The-Experience-Economy-Theater-
Business/dp/0875848192)

------
eliben
Four blades? I must have been missing out - I'm pretty happy with a 3-blade
razor.

~~~
charlieflowers
What are you, Amish? :)

