Coleman McCormick

Archive of posts with tag 'Psychology'

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The Low-Code IKEA Effect

March 22, 2021 • #

I linked a few days ago to Packy McCormick’s piece Excel Never Dies, which went deep on Microsoft Excel, the springboard for a thousand internet businesses over the last 30 years. “Low-code” techniques in software have become ubiquitous at this point, and Excel was the proto-low-code environment — one of the first that stepped toward empowering regular people to create their own software. In the mid-80s, if you wanted to make your own software tools, you were in C, BASIC, or Pascal. Excel and its siblings (Lotus 1-2-3, VisiCalc) gave users a visual workspace, an abstraction layer lending power without the need to learn languages.

Today in the low-code ecosystem you have hundreds of products for all sorts of use cases leaning on similar building principles — Bubble and Webflow for websites, Make.com and Zapier for integrations, Notion and Coda for team collaboration, even Figma for designs. The strategy goes hand-in-hand with product-led growth: start with simple use cases, be inviting to new users, and gradually empower them to build their own products.

Low-code IKEA effect

Excel has benefited from this model since the 80s: give people some building blocks, a canvas, and some guardrails and let them go build. Start out with simple formulas, create multiple sheets, cross-link data, and eventually learn enough to build your own complete custom programs.

What is it about low-code that makes such effective software businesses? Sure, there’s the flexibility it affords to unforeseen use cases, and the adaptability to apply a tool to a thousand different jobs. But there’s psychology at play here that makes it particularly compelling for many types of software.

There’s a cognitive phenomenon called the “IKEA effect”, which says:

Consumers are likely to place a disproportionately high value on products they partially created

IKEA is famous for its modular furniture, which customers take home and partially assemble themselves. In a 2011 paper, Michael Norton, Daniel Mochon, and Dan Ariely identified this effect, studying how consumers valued products that they personally took part in creating, from IKEA furniture, to origami figures, to LEGO sets. Other studies of effort justification go way back to the 1950s, so it’s a principle that’s been understood, even if only implicitly, by product creators for decades.

Low-code tools harness this effect, too. Customers are very willing to participate in the creation process if they get something in return. In the case of IKEA it’s more portable, affordable furniture products. In low-code software it’s a solution tailored to their personal, specific business need. Paradoxically, the additional effort a customer puts into a product through self-service, assembly, or customization generates a greater perception of value than consumer being handed an assembled, completed product.

SaaS companies should embrace this idea. Letting the customer take over for the “last mile” creates wins all around for everyone. Mutual benefits accrue to both creator and consumer:

  • Customers have a sense of ownership when they play a role in building their own solution.
  • The result can be personalized. In business environments, companies want to differentiate themselves from competitors. They don’t want commodities that any other player can simply buy and install. Certainly not for their unique business practices.
  • Production costs are reduced. The product creator builds the toolbox (or parts list, instructions, and tool kit) and lets the consumer take it from there. Don’t have to spend time understanding the nuances of hundreds of different use cases. You provide building blocks and let recombination generate thousands of unique solutions.
  • Increased retention! Studies showed that consumers consistently rated products they helped assemble higher in value than already-assembled ones. This valuation bias manifests in retention dynamics for your product: if customers are committed enough and build their own solution, they’ll more likely imbue it with greater value.

The challenge for product creators is to strike a balance — a “just-right” level of customer participation. Too much abstraction in your product, requiring too much building of primitives, and the customer is confused and unlikely to have the patience to work through it. Likewise, when you buy an IKEA table, you don’t want to be sanding, painting, or drilling, but snapping, locking, and bolting are fine. Success is a key criteria to get the positive upside. From the Wikipedia page:

To be sure, “labor leads to love only when labor results in successful completion of tasks; when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated.” The researchers also concluded “that labor increases valuation for both ‘do-it-yourselfers’ and novices.”

Participation in the process creates a feedback loop: the tool adapts to the unique circumstances of the consumer, functions as a built-in reward, and the consumer learns more about their workflow in the process.

Low-code as a software strategy allows for a personalization on-ramp. Its IKEA effect gives customers the power to participate in building their own solution, tailoring it to their specific tastes along the way.

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Three Languages

April 7, 2020 • #

The economist Arnold Kling is a regular on EconTalk.

This interview discussion revisits his 2013 book, The Three Languages of Politics in light of the current political landscape.

In the current media landscape, amplified by the massive expansion of networks and social media, everyone is talking past one another. Not even speaking the same language.

To quote Kling from the interview:

People are not trying to change the minds of the other side, or trying to open the minds of their own side. They’re trying to close the minds of their own side.

I think this motivation to close minds and not seek common ground comes from a lack of fluency in these languages — we don’t understand one another, so its simpler to attempt to damn it, vilify it, and retreat further into your own rhetoric.

As he defines them, the languages are progressive, conservative, and libertarian.

Broadly, the “three languages” try to give a framework around what creates such wide differences in perspective from person to person — what generates the tribalistic “me vs. them” attitudes between folks with differing worldviews. You tend to talk past others if you don’t recognize your own preferred language, and explicitly make an effort to empathize with the other’s perspective. It’s not the specific naming of the categories that’s important, it’s how each filters and prioritizes views along a preferred morality continuum (“political psychology” as Kling refers to it):

  • Progressive — oppressed vs. oppressor
  • Conservative — civilization vs. barbarism
  • Libertarian — liberty vs. coercion

Naturally no person exclusively and cleanly speaks in a single language, but these are guidelines to help position where you’re coming from in relation to another.

Listening to Kling’s concepts, I was reminded of Jonathan Haidt’s The Righteous Mind and his framing of moral foundations theory.

I recently linked to an interview Kling did with author Martin Gurri, the author of the excellent book The Revolt of the Public, which I’m currently enjoying. That book touches on a lot of the same territory as this discussion.

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Daniel Kahneman on AI Podcast

January 21, 2020 • #

I don’t know what Lex Fridman is doing to recruit the guests he gets on his show (The Artificial Intelligence Podcast), but it’s one of the best technical podcasts out there.

This one is a good introduction to the work of legendary psychologist Daniel Kahneman (of Thinking, Fast and Slow fame).

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Weekend Reading: Intellectual Humility, Scoping, and Gboard

August 31, 2019 • #

🛤 Missing the Light at the End of the Tunnel

Honest postmortems are insightful to get the inside backstory on what happened behind the scenes with a company. In this one, Jason Crawford goes into what went wrong with Fieldbook before they shut it down and were acquired by Flexport a couple years ago:

Now, with a year to digest, I think this is true and was a core mistake. I vastly underestimated the resources it was going to take—in time, effort and money—to build a launchable product in the space.

In the 8 years since we launched the first version of Fulcrum, we’ve had (fortunately) smaller versions of this experience over and over. Each new major overhaul, large feature, or product business model change we’ve undertaken has probably cost us twice the time we initially expected it to. Scoping is a science itself that everyone has to learn.

In Jeff Bezos’s 2018 letter to Amazon shareholders, he discusses the topic of high standards: how to have them and how to get your team to have them. (As a side note, if you don’t read Bezos’s shareholder letters, you’re missing out. Even if you’ve already read all the business and startup advice in the world, you will find new and keen insights there.)

Bezos makes a few interesting points, but I’ll focus on one: To have high standards in practice, you need realistic expectations about the scope of effort required.

As a simple example, he mentions learning to do a handstand. Some people think they should be able to learn a handstand in two weeks; in reality, it takes six months. If you go in thinking it will take two weeks, not only do you not learn it in two weeks, you also don’t learn it in six months—you learn it never, because you get discouraged and quit. Bezos says a similar thing applies to the famous six-page memos that substitute for slide decks at Amazon (the ones that are read silently in meetings). Some people expect they can write a good memo the night before the meeting; in reality, you have to start a week before, in order to allow time for drafting, feedback, and editing.

🏛 Ten Ways to Defuse Political Arrogance

David Blankenhorn calls for a return of intellectual humility in public discourse.

At the personal level, intellectual humility counterbalances narcissism, self-centeredness, pridefulness, and the need to dominate others. Conversely, intellectual humility seems to correlate positively with empathy, responsiveness to reasons, the ability to acknowledge what one owes (including intellectually) to others, and the moral capacity for equal regard of others. Arguably its ultimate fruit is a more accurate understanding of oneself and one’s capacities. Intellectual humility also appears frequently to correlate positively with successful leadership (due especially to the link between intellectual humility and trustworthiness) and with rightly earned self-confidence.

⌨️ The Machine Intelligence Behind Gboard

A fun technical overview of how the Google team is using predictive machine learning models to make typing on mobile devices more efficient.

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Intuition, Expertise, and Learning

March 13, 2019 • #

The legendary psychologist Daniel Kahneman (author of Thinking, Fast and Slow in his wheelhouse, talking about human biases, decision making, and signal vs. noise.

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