Simplicity is Really Complicated with Paul D'Alessandro (Also posted at HBR)

Intuit just bought for $170,000,000.  Mint is a simple, web and phone based tool with a great design interface that helps people manage their finances in an integrated way across all their credit cards and asset accounts -- helping individuals get on top of their financial life.  The New York Times reports they have 1.5 million users, and tracked over $200,000,000,000 in spending meaning that Intuit is paying over $100 per user! juice-squeezer

Why did the company that made its mark on simple user interface (its very name Intuit is a riff on "intuitive") have to buy Mint? Why couldn't they have built it themselves?  My colleague Paul D'Alessandro and I have been pondering that question and we think it is because it is very hard for a complex organization to build something simple.  It is the natural tendency of all firms, product lines, governments and even households to build up too much complexity that adds little value.  As my friend Jim Rogers noted, "Organizations are like households -- they tend to fill the attic and basement with too much stuff, and it takes discipline to remove it."  From a human standpoint, it is easier for executives to say "yes" to a new product or feature than to say "no", and it takes even more work to kill an existing service or offering.  Even Scott Cook, the legendary CEO of Intuit could not pull it off, so many firms have this problem.  Earlier this year, Rosabeth Moss Kanter also noted: Simplicity the New Big Thing.

So what?  Well, the customer suffers.  More importantly, we know from our work in Behavioral Economics, that too much clutter, and choice freezes customer decision-making.  Too many offers are not enticing, instead they cause the customer to be overwhelmed and then do nothing at all.  At a number of our clients we have simplified decision-making processes -- not just the choice model but the total experience -- and seen immediate, material increases in revenue because we made the choice process more facile.  Mint embodies this approach.

In addition, took advantage of a couple very important trends that all firms should be watching:

  • First, the millennial segment, which will have more spending power than the baby boomers by 2015, expect everything -- in the immortal words of Robert Wodruff, the man who made brown fizzy sugar water into Coke! -- to be "within an arms length of desire".  In other words every competitive product needs to be at people's fingertips, on the phone, web, and everywhere one would expect it to be.  Mint was.
  • Second, this is the first generation that spent its teenage years online -- and they are truly comfortable sharing all kinds of data in order to have convenience.  They also assume that things in the digital world are no more or less secure than those pieces of information floating around on pieces of paper or in file cabinets.  To them the Marketspace is just as friendly or unfriendly as the Marketplace, as Jeff Rayport and John wrote about so long ago.
  • Third, they have experienced the web where poor designs are ignored, and only great design bubble to the surface.  We don't need to speak again to the simplicity of Google, or the ease of Twitter -- but these consumers don't have to put up with anything that is not superior.  The options are a click away.

There is a useful lesson in how they got there.  Their CEO Aaron Patzer, not only has a EE and CSE degree from Duke and Princeton, but he also delves into the details in his product design as David Pakman, a partner at the venerable venture firm Venrock pointed out so articulately in his March blog entry, "Why Mint Matters: A Message to Entrepreneurs About Products". So, the question for your firm is are you staying complicated to make your managerial life easier, or do you have the courage to force the simplicity that the market will reward?  Or in the immortal words of your mother, "Have you cleaned your room yet?"

The Harvard Business School version of this post can be found here.

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