I drink my coffee black but my girl drinks hers with cream.
There are many different kinds of cream you can get.
Heavy cream, half and half, coffee creamer, those powders and so on.
The one she likes needs to be refrigerated and comes in a few different sizes.
I usually get the 500ml cartons.
Kudos on the choice architecture because they are about 77 cents, while bottles that are half the size (of another brand) are about the same price or even a little more expensive.
We cover choice architecture and decoy choices in Making Your Stuff Cheaper Without Making Your Stuff Cheaper
But like I said... I don’t touch the stuff so it usually goes bad before it’s all used.
This creates a slightly annoying situation where after a while, I have to start checking to make sure it hasn’t gone bad yet.
So when I walked into the store a few days ago, I picked up a smaller and more expensive bottle.
Why? Because I was paying extra to save myself from that tedious and annoying process for just a few cents.
Are there many people who find themselves in a similar situation?
But the lesson I’d like you to take away today is that the value might not lie where you think it lies for everyone.
You might think your users make a decision based on certain factors while in reality, they make it based on a completely different set.
This is much, much more common than you think because people aren’t as logical as we pretend them to be.
And because most founders are arrogant and equate our assumptions with facts which is why we don’t test them.
I mean, who inherently enjoys proving themselves wrong.
The popularity of the Airpods
I predicted that wireless earbuds would be incredibly popular not because of sound quality…
But because they save the user that tiny bit of annoyance of having to mess about with that darn tangled cable.
As well as not feeling that cable rub against your face and being obligated to have your phone nearby because it’s connected to your body via the buds in your ears.
That implies (from a strategy perspective) that the majority of your engineering efforts should be invested in convenience rather than sound quality.
I think it’s safe to say I’ve been right with the massive popularity of the Airpods over other much better sounding options such as wireless headphones or those buds that are semi-wireless and connect with a cable across the neck.
What Apple did so right with the Airpods, they did so wrong with the Homepod IMO.
With smart speakers, users want the best personal assistant with an okay music speaker. (Alexa, Google Assistant)
What Apple created is an okay personal assistant (if I’m being generous towards Siri) coupled with the best music speaker.
They essentially focussed on a part of the value that’s not the main reason why people buy it. Which is why the Homepod is declining in sales and why they’ve discounted it in order to boost sales.
This likely won’t work because if people don’t like it, it’s probably not because the price is too high but rather the value too low. Instead of lowering the price they need to increase the value. E.g. make Siri as good or better as Alexa.
It’s very un-Apple like to make this mistake because they’re usually the ones who’re very good at ignoring hype and giving people what they want instead.
Instead of throwing in specs and random features just to market the highest numbers, they usually think very hard about what actually makes sense and creates the best experience for the user.
Apple has shown many times that they’re fine with lower specs or not having features if they think it’ll improve your experience. (I.e. Removing the headphone jack and focussing on wireless.)
Another example is only making the pixel density high enough to the point where the human eye can’t notice any improvements from a normal distance (Retina screens).
This isn’t the status quo. I grew up with the pixel wars, where every cell phone needed the highest number of pixels.
It didn’t create better pictures but it was just a marketing gimmick.
So today’s TLDR for you: Don’t assume that you know where the value lies for your users. You have multiple segments and it’s worth talking with them to get a better understanding of how they make buying decisions.
For more on value read: ‘’But Where Is The Value?’’ Part 1.