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June 02, 2008
User Experience Disruption in the Experience Economy
Joseph Pine and James Gilmore authored a reknowned textbook called "The Experience Economy; Work is Theater and Every Business is a Stage". A fundamental call to action from this book is that in any industry where a product or service is commoditised then "Experience Matters". You may recall this being the tagline chosen by Macromedia as the phrase "Rich Internet Application" was coined, capturing the zeitgeist behind the importance of Rich Internet Applications as an enabling technology for more effective online experiences.
Pine and Gilmore identify a timeline for economies; we first moved from an agricultural economy where essentially goods are taken from the land to a manufacturing economy that brings mass-production and distribution techniques to these goods. The next major shift was that to a service economy, where we deliver value-added services upon these manufactured goods.
However, as goods and services themselves become commoditised as competition prevails, then the next economy within which an organisation can prosper is the "experience economy". In an experience economy, companies can emerge as leaders by staging experiences that are individual to each of their customers in an inherently personal way. Simply offering goods and services is not enough. The classic analogy is that of Starbucks - from the coffee bean (agricultural economy) to the jar of coffee (the manufacturing economy) to the local coffee shop (service economy) to creating an holistic experience that encourages customers to engage for longer with your brand, and to pay more in doing so (Starbucks stores).
So what's the relevance to user-experience disruption ? I believe that Rich Internet Applications continue to be an enabling technology with which organisations can deliver these experiences, where these experiences can be made personal, and where the experience can differentiate one online organisation from another delivering the same goods or services.
However; it's no longer the biggest that eats the smallest, it's the fastest that eats the slowest - and by leveraging enabling technologies like Rich Internet Applications, by putting innovation at the heart of a strategy for an organisation, there is opportunity to enter a rapidly commoditised marketplace and indeed deliver an experience that drives the final nail in the coffin of commoditisation.
I believe that Rich Internet Applications are necessary, but not sufficient for creating innovative experiences for customers. While many will endlessly debate, analyse, trial and consider the technical impact that rich-client technologies may have on their internal infrastructures, debate the merits of one markup language over another, or whether one technology is capable of delivering the same level of interactivity as another technology, those who have the agility to pick and embrace a technology and instead focus on the techniques and disciplines that will allow them to create innovative customer-centric experiences upon these technologies, have the pace and appetite to disrupt and displace the larger providers who for so long have produced the goods and services that their experiences will commoditise.
I'll look at a few examples in some upcoming posts.
What do you think ? Are there goods or services that you are now consuming from new-entrants to the market, who are providing a personal, value-added experience that demonstrates understanding of your needs, rather than of the underlying product ? Or are there goods and services you desparately would like to see commoditised with more useful and personal experiences ?
Do you see an opportunity for experience innovation ? Do Rich Internet Application technologies support the delivery of these experiences ?
Posted by swebster at June 2, 2008 10:26 AM
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As we move from web 1.0-2.0-3.0 (and beyond?) we will be less inclined to be 'addressed' by published content, and more inclined toward rapid access to real-time solutions - 24/7.
That will require a different type interaction where the pull of consumer needs (*VRM -vendor relationship management) drives the supply chain. And, that will require a different 'platFORUM'.
One option is discussed here and comments are welcome:
http://unettednations.wordpress.com/2008/05/29/what-if/
*http://cyber.law.harvard.edu/projectvrm/Main_Page
Posted by: GSBigger at June 2, 2008 04:38 PM
There is no doubt that RIAs enagage users and provide better experience.
We at Mixercast created platform, which enables companies now to create micro-apps to engage users (fans, audience, etc) to part of something.
For example, a movie promotion where users (fans) are provided media and asked to create a cool mashup, a bunch would be chosen as winners.
Isn't it cool way to promote things? This would have not been possible by having an RIA app, probably all those interaction metaphors provided by RIAs.
There are many other examples which would suggest this.
I am sure, over the years, when RIA experience can be consistent over all devices, this (your points) would be realized more.
Experience economy strategy has influenced the products at Macromedia, that's why there was tag line "Experience matters", that's so true in our day to day life.
-abdul
PS: I don't work for Mixercat anymore
Posted by: Abdul Qabiz at June 2, 2008 08:28 PM
Abdul - thanks for your reasoned response; the use-case you describe, of creating a platform of services and then delivering small applications or reusable user-experience upon those services is actually a principle I see recurring with customers, and something I've started referring to as XOA, or "Experience Oriented Architectures". I plan on blogging more about this in the future, but I've presented at a few conferences/analyst events where I've talked about "RIA + SOA = XOA". I believe that where organisations are creating platforms that offer the user-experience components that consume their platform services, and where it's easy to use RIA technologies like Flex and AIR to not just choreograph and orchestrate services, but to do so with a level of abstraction achieved by composing and assembling "widgets", "mini-apps" or "components", we really begin to realise the benefits of creating a platform rather than an application - alignment of business and IT, better service reuse, greater agility in creating new applications and most importantly, greater innovation.
A natural extension of the XOA concept within an organisation, is to make those components and services available to others; Max Mancini, Director of Disruptive Innovation at Ebay was quoted as saying "if our ecosystem gets to the point that we're just developing infrastructure and we can let the eBay community worry about innovations in user-interfaces...". This is a recurring theme that I'm seeing in customers who have bought into Tim O'Reilly's vision of "Create a Platform not an Application".
Posted by: Steven Webster at June 3, 2008 11:33 AM