The uncertainty of relevance

Having ideas is easy, we produce myriads a day, and when it is about deciding on their adoption when they will directly affect our personal life; it is quasi-immediate to discriminate between good and bad ideas. Why is it then so difficult to predict the success rate of an idea to flourish, a product to make revenue, a patent to be filed, a publication to be accepted, a thesis to be cited, a post to be liked…? The answer is “relevance” – tightly linked to principles and priorities, and how uncertain it is to know what we all consider as such.

If we concretize to IT and ICT technologies, new ideas, inventions, and products are – arguably more than in any other field of science – surrounded by a halo of uncertainty: first, because of the inter-dependence among the constituent hardware components and their different progress pace – e.g. memory miniaturization fueling the success of digital photography and personal computers; second; because the outstanding levels of compute power and inter-connectivity that we have reached, making data processing and storage cheaper than ever, and then nurturing the advent of ultra-flexible software goods and platforms – e.g. the introduction of open software-defined networking, triggering a revolutionary paradigm shift in network design from proprietary solutions to open projects; and last, because the “next wave” of ideas will operate in the future, so it is very hard to map individual technologies to social priorities, principles, and needs, which from a business standpoint that is to say “markets that don’t exist cannot be analyzed”. While the first two are game-changing factors that have affected entire industries in the past, I want to draw attention onto the latter, the most intuitive yet most subjective and uncertain point; and, in my opinion, the major driver of most products’ relevance and success.

It does not matter how it does it or how efficiently, if a product or idea satisfies an actual human need like any other, it is relevant and so it constitutes a good business opportunity. That logical. Unfortunately, we are all different, we all change over time, and we are all influenced by our environment, contingencies, and technologies; the endeavor is then to spot the raw, coherent, and timeless sources of necessity that your product/brand satisfies, and then build heavily upon them:

• Nokia: “Connecting people”
• L’Oréal: “Because You’re Worth It”
• BMW: “Designed for Driving Pleasure”
• Dollar Shave Club: “Shave Time. Shave Money”
• MasterCard: “There are some things money can’t buy. For everything else, there’s MasterCard.”
• Tesla: “to accelerate the advent of sustainable transport”
• Facebook: “a social utility that connects you with the people around you”
• Google: “Don’t be evil”, “Do the right thing”, “to organize the world’s information and make it universally accessible and useful”
• The U.S. Marine Corps: “The Few. The Proud. The Marines”

The slogans above, besides witty and catchy, they hint an undeniable effort to link the business to a human need or “moral” behavior, occasionally – and tactically – resonating with our heartstrings and infusing users/clients with the idea that purchasing is correct, that purchasing is useful, that purchasing is satisfactory for us and potentially others. Simple psychology? Sure, that why it works. Interestingly, we could even argue that the values and needs that these slogans exploit are universally valid; applicable irrespective of race, region of the world, gender, political ideas, or other discrimination factors. Now, how to implement this methodically?

How to equalize the uncertainty of subjectivity and still be relevant around the globe?

The key is abstraction, that is, raise the perspective until we are all the same; something that Abraham Maslow really facilitated back in 1943. It is a motivational tool, right, but it is surprising how easy it is to relate all the slogans above, public promotions, and successful products to one or several levels in “Maslow’s hierarchy of needs”. Social connectivity, pride, self-esteem, time efficiency, uniqueness and belonging…a full list of unquestionable “good things”. Needless to specify that this is not equally necessary for well-established and simple products as it is for disruptive and complex technologies, but even a screwdriver was about saving time when it first appeared back in the 15^th century.

One last point is that, besides the association of the idea/product with some macro-levels of needs, it is essential that consistency and coherence is maintained in and across the addressed markets. Why? Exactly for the same reason that one person cannot excel at everything in life. To illustrate my point, let me show an extract of the research summary following some low returns of a real digital healthcare business, a real product line which, in appearance, is directly related with an essential human need:

[…] SAM is 20-35+ yo people […]

[…] the purpose of wearables is two-fold: (i) motivate to be active, and (ii) build up healthy mid/long-term habits […]

[…] the potential reason for the low return rate is the misalignment between the buying purpose between emotional people and rational people. Emotional people will rarely buy this technology merely because of its ability to help create healthy habits in the long term, but rather for the recognition that affordability brings along, as well as the impact on social platforms […] rational people want to make sure that they spend money on something that, of course, motivates them, but also on something useful from the health perspective […].

In short, the product was aimed onto a relatively small market segmentation that, moreover, required themselves too uncorrelated needs: health and well-being vs. status/recognition.

 

My bottom line to this reflection is that, when a team sits down to evaluate the potential of a technology to succeed – or to deserve a capital injection Carl Eschenbach discussed during our first lecture, it is clearly a task that should not just involve the engineers and market analysts, but it should also count on a social perspective that blends technology and revenues together in an end-to-end morally meaningful story. Even in Sequoia itself, in their funding mechanism and business operations, this pursue for ethic equilibrium is remarkably explicit. Think of it, if I had to state three of Carl’s points that were emphasized in the lecture, these will be:

• Our team comprises great experts from a variety of professional and personal background.
• Sequoia does not support confronting businesses for ethical reasons
• We go from seed funding all the way to IPO because we want to help (grow) those who put trust on us.
• Great part of Sequoia’s LPs are non-profitable organizations that they take very good care of, out of respect and commitment. We want them to be proud.

Is there something more unquestionably positive than that? Can you see Maslow’s there?

References

• C.M. Christensen (2000). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press.
• J. Bort, “Now Facebook plans to eat the $500b telecom equipment market,” in Business Insider, 2016[Online]. Available: http://www.businessinsider.com/facebook-voyager-optical-switch-telecom-infra-project-2016-11
• L. Kolowich, “22 Companies with really catchy slogans & brand taglines,” in HubSpot, 2018  [Online]. Available: https://blog.hubspot.com/marketing/brand-slogans-and-taglines
• A.H. Maslow, “A theory of human motivation,” in Psychological Review, vol. 50, pp. 370-396, 1943 [Online]. Available: http://psychclassics.yorku.ca/Maslow/motivation.htm
• Internal Nokia
• MS&E238-01 lecture notes, week 1.