There has never been a better time to develop a product online. The consumer internet has exploded in recent years and the enterprise market is fully incorporating Internet services into their business. Venture Capital is in abundance once again and there are new incubator and accelerator programs springing up everyday. We now have services that specialise in providing achitecture for other companies to use in the cloud and hosting and bandwidth costs are at an all time low. With all these changes, it is extremely attractive to develop a product with very little investment and potentially create a huge online business. However, for all the companies like Facebook or Twitter there are literally thousands of companies that never quite make it. There are many reasons why some products fail yet others have meteoric success. In my opinion, one of these reasons is the transition from a fad to a utility.
What is a utility?
A utility is defined as “The state of being useful, profit-able, or beneficial”, whilst a fad is defined as “An intense and widely shared enthusiasm for something, esp. one that is short-lived; a craze”. In the tech industry, and particularly the consumer Internet, there seems to be a new fad every couple of months. However even with the huge amount of attention that comes with being the latest hot fad, only a select few transition to becoming a utility application.
A product makes the transition from a fad to a utility by being able to add value to the user’s experience. I believe that nearly all products start out as an experiment, but the key change is when the product team find the value that has sparked the rise in attention and they subsequently double down on that experience to move from a fad to a utility.
I think many new products start out without the long term vision of becoming a utility, but it is that realisation that powers user engagement.
Examples of the fad to utility transition
Arguably, just about any product that has maintained interest and continued to grow in user numbers and engagement can be said to have made this transition. As I mentioned previously, this transition is by no means the only reason for success and the following examples obviously had many factors that have contributed to their success.
The first example is Foursquare. Foursquare started off as a way of broadcasting your whereabouts to your friends. Gamification and badges and the inate desire to share pictures and locations fuelled much of Foursquare’s early growth. However the real vision of Dennis and Naveen was the transition to become a utility. Now with billions of checkins, location data, reviews and user preferences, Foursquare can boast to be the number one geolocation application. Foursquare has built such a large moat around it’s company, it arguably cannot be caught, even by the likes of Facebook.
The second example is eBay. eBay began life as a way of simply allowing people to connect in order to buy and sell items. eBay quickly grew to become the number one second hand market in the world and now hosts millions of auctions every single day. eBay’s transition from fad to utility was based on the way it allowed people to become professional eBay merchants. eBay become much more than a service to buy unique little trinkets or memorabilia, it spawned an ecosystem that gave it’s users a fantastic way of buying and an opportunity for many to become their own boss.
And the third example is Facebook. Facebook has become much more than a social network. It is now a kin to a centralised email system. Facebook has grown to become one of the best communication tools we have at our disposal as we are connected together with our friends and family through Facebook’s social graph. In the past, whenever someone changed their phone number of their email address, it was easy to lose touch with them. Facebook has changed all that and really has made huge steps in progress in their mission to better connect the world. Arguably Facebook has transitioned into a number of utility applications, but for me, Facebook’s communication tools are the most obvious example.
How to make the transition
I believe just about any product manager/team can transition a product from a fad to a utility, it just takes the ability to objectively look at your user engagement data and product features and make some cold hard decisions about the future of your product. When planning an application, it is easy to get carried away with what you can implement and your grand vision of what you want to achieve. However if your current set of users aren’t behaving like your thought they were going to, perhaps it’s time to rething that strategy.
There’s no shame in moving away from one idea to another. It’s far better to do this as quickly as possible (as described in The Lean Start Up by Eric Ries) and make sure you have your customer development on track to discover where the value of your product lies.
For example, if your vision lies down one path, but your users are either not engaged with that path, or are heading down a different one, perhaps you need to rethink where you are taking your product.
To read more about this topic, I would highly recommend Geoffrey A. Moore’s - Crossing the chasm.
If you want to talk to me in more depth about this topic and your product, send me a message on Twitter and I’ll be happy to help!.