A Better Mousetrap Is Not Enough

Now this may seem obvious, but bear with me: When you’re ahead of the market, as are many of us in the Internet space, you shouldn’t forget about the consumer.

Because online businesses are creating new products and services, many of them are attempting to fill needs that don’t yet fully exist. We are all hoping that enough of a latent market, one that is just waiting to be fulfilled, is out there to consume our products. However, unless we’ve been clever enough to truly plumb the depths of the market through consumer research, we often have little idea of the demand inherent in the consumers who make up the market.

Our ignorance of market demand, though, often does little to dampen our conviction that “If we build it, ‘someone (or many someones)’ will come.” In the prototypical Internet business plan, consumer adoption is almost a given. Sure, we’ll have to spend some money to build the brand, but then we’ll be flooded with users clamoring for our products. This goes for adoption by professionals as well, for all the companies operating in the business-to-business space.

Whether you are hoping to sell to Jane Smith or to the long-distance-trucker market, getting users is almost always harder than it looks at the outset.

Why is it so hard to make ourselves realize this? We look at the product that we invented, and we just know it’s great: Why wouldn’t someone want to use it? This is a better mousetrap, so the world will naturally beat a path to our door, right?

Unfortunately, no. Many people are relatively happy with their old mousetrap. They’ve used it for a while, they know how it works, and they’ve learned how to fix it when it starts to stick. A better mousetrap is harder to use because it’s new. This is the concept of the switching cost — and the reason why so many Web companies spent so much to get “first-mover advantage” and build a large user base.

Switching costs, though, applies only when somebody really uses the old mousetrap. If the consumer has 10 different traps in his or her drawer, and uses them all at different times, a new mousetrap isn’t a large hurdle to overcome. This is both good and bad: good if you’ve got a new mousetrap; bad because, online, yours quickly becomes an old mousetrap.

We’re seeing this now, as companies like AOL Time Warner are beginning to squeeze more value out of their subscribers, and companies like Yahoo are beginning to feel the pain of being just another option for non-locked-in visitors. “Eyeballs” are no longer the powerful currency we used to think they were. As someone once said, “Eyeballs last a blink, but credit cards are forever.”

Consumers cannot be looked at as an unlimited stream, ready to pour out over any e-company that stretches out its URL. As they get more savvy, Web users are becoming more particular about the sites they visit, and they are more protective of their privacy and inboxes.

Moving from AOL to the new Internet service provider (ISP) company you’ve established will be difficult for the user, even if your service is much better. People would have to give up their email address, their “instant messenger” habits, and their favorite AOL page. It could be be much easier for people moving from Yahoo to your new search engine company, especially if they already use other engines, like AltaVista and Google. Getting people who’ve never ordered a pizza online to use your online pizza company could be difficult. You have to get them over their “old mousetrap,” which was to order pizza by phone. Then, if you can get them to want to use your site, you have to provide a simple, pleasant, satisfying experience, or they’ll go right back to their old mousetrap.

Once you’ve done the research and determined how many people are willing to buy what you’re selling, pay what you’ll charge, and change mousetraps, you will have a good idea of the job ahead of you. With that knowledge, then, you’ll be ready to build your path to the new world — because the user will be there waiting for you.