Innovation versus the Devil that you Know

by Rocco Tarasi

Innovation versus the Devil that you KnowChanging user behavior is really, really hard. It has to be one of the biggest obstacles to reaching innovation success. I’ve seen it with my start-ups that have introduced new products, and I’ve seen it with companies that make seemingly insignificant changes to what a user has already learned about a product. It is impossible to underestimate the effort and risk at asking a user to do something new.

I was reminded of this golden rule when I came across a Quora article titled “Why hasn’t another product disrupted and replaced Craigslist?“.  There were twenty-three total answers, but the first few (the highest rated answers) included some great analysis and were all that you needed to read.

Josh Hannah pointed out that “Craigslist has been disrupted, its just not obvious yet” and showed statistics that Craigslist’s users are lower today compared to 2009.   He also wrote that

“Bad sites with network effects show much slower decay in use than they should based on their absolute quality (think eBay).  Bad sites who price most of their product at free show incredibly slow decay in use.”

If it’s “good enough”, and if its both good enough and free, its going to be really hard to get users to choose to go somewhere else.

An anonymous user added “Most people have a status quo bias…they must see substantial and compelling benefits to changing[sic] their behavior.” You can criticize the user interface and features of Craigslist all you want, but the drawbacks or perceived ugliness are not enough to get users to switch to a competing service.

It reminds me of my last start-up where we sold compliance software to enterprises to manage policy, procedure and Sarbanes-Oxley compliance.   While it was a successful business, I remember talking with dozens, maybe even hundreds of companies who complained bitterly about their existing application… a few had even sued their vendors for non-performance.  Not only that, but in a few cases our annual subscription cost (and no upfront fee) was less than their annual maintenance costs.  And they still wouldn’t budge.

The phrase “the devil that you know…” certainly comes to mind.

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Rocco TarasiRocco Tarasi was an accountant, investment banker, and CFO before becoming a technology entrepreneur.

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