Friction, the job to be done, changing the world (!), and the internet opportunity

What is friction? In tech industry parlance, the word friction is used to describe the effort required to do something. To start, let’s look at how technology can reduce friction, making it easier for us to get whatever we want done, done.

Consider a few examples. Some big, some small;

• Passwords / passcodes to Fingerprints / facial recognition
• Letters to Email, SMS, Whatsapp
• Television to Streaming
• Wired earphones to AirPods
• Newspapers to Websites
• Chip and pin to Contactless
• Taxi to Uber
• Retail to Home delivery
• Travel by sea to Travel by air

Make it Radically Easy

The commonality behind each of these changes is a reduction in the friction (effort) involved with getting the job done. But why does this matter? The key point is this — removing friction involved with doing something can change how people behave.

There can be a lot of friction involved with buying something online. Create an account. Think of a password. Try again, you need at least one capital letter, a number, a special character, and a Greek mathematical symbol. Enter your name, address, phone number, payment details. Click every box with a ‘stop sign’ in it. Try again. If you put this many hurdles in front of people, many will not make it to the finish line. The best e-commerce stores turned this obstacle course into a saunter in the park by introducing the one-click purchase. I don’t have the data, but I would bet that far fewer customers abandoned their shopping carts on sites with a one-click purchase compared to sites without it.

Tobi Lutke, the co-founder and CEO of Shopify, gave a great example of how removing friction can change behaviour in an interview with Patrick O’Shaughnessy. When Shopify was a 40 person company, they decided it was time to start serving lunch at the office. People loved it, and for the first few weeks, everybody would clean up after themselves after eating. When the novelty wore off, people stopped cleaning up after themselves. Tobi first tried to solve this problem by introducing a straightforward policy; everybody has to clean up after themselves. This worked for a few weeks, but then the problem reared its head again. Their next idea was to tackle the problem with a social nudge. This involved placing images of themselves cleaning up after others and looking unhappy about doing it throughout the kitchen. This also worked for a while, but then people reverted back to their old ways again. This led Tobi and his co-founder Daniel Weinand to an insight; instead of trying to force people to change, let’s just make it far easier for them to do what we want them to do. They installed a drop off point for trays and cutlery at the four kitchen exits, and the problem disappeared.

If you want people to do something, make it radically easy for them to do it. Behaviour can be changed as the influence of inertia wanes.

Consider the earlier examples; do you spend more on your card when you can make a contactless payment? Do you communicate more when you can send and receive messages instantly? Do you create and share more content when the barriers involved with broadcasting to an audience are removed? Do you listen to more music/podcasts when AirPods are already sat in your ear, and listening won’t involve having to untangle wires? Do more people donate their organs when they don’t have to sign up, but are given the option to opt-out? This isn’t a space where I want to synthesize data or studies, but I’m sure they’re out there, and I’m confident the answer to these questions is varying degrees of yes.

Armed with this knowledge, the market, AKA technologists, entrepreneurs, companies, et al., set out to remove the friction involved with getting X job done by creating an alternative solution with less friction. They know humans value this help, and so they know they will pay for the alternative solution if it works. How much they are prepared to pay is correlated with how much easier or better the alternative solution makes their life.

For what’s left of this blog post I will just refer to ‘an alternative solution that reduces friction’ as innovation. This is a bit of a simplification, as a lot of innovations do more than just reduce friction. But let’s go with it anyway.

Changing the World Through Innovation

When an innovation is widely adopted, the world changes. Sometimes in leaps (sea travel to air travel), sometimes in steps (pin payments to contactless payments). The widespread adoption of an innovation is effectively people collectively saying — yes, you have made X part of my life easier / better. Here is my money (or attention) in exchange for that help.

In his recent Conversation with Tyler (Cowen), Reid Hoffman said something related to changing the world through technology that really stuck with me. Hoffman draws on Archimedes, and the idea of the Archimedean lever. “Give me a place to stand and a lever long enough” Archimedes said, “and I will move the world”. Hoffman equates the Archimedean lever to technology, and Archimedes to the entrepreneur. Abstracting away friction using technology, and changing the way people pay for things, communicate, or move from A to B, is the entrepreneur wielding the Archimedean lever and changing the world.

In this analogy, the world is, of course, the world — and there is ~7 billion of us on it. This brings me to the final part of my post — The Internet — a technology that has the potential to connect those ~7 billion people.

The Internet

Before wrapping this up, let’s change pace a bit and consider the seminal technological innovation of my lifetime (I’m 23) — the internet.

What did the internet do for us? Among many, many, many other wonderful (and sometimes terrible) things, it is a technology that reduces the friction involved with getting many jobs done. Want to buy a book? Want to watch a movie? Want to order a taxi? Want to listen to music? Want to give your friend money? Want to read the news? Want to share your thoughts? Want to learn? You get the idea.

But, crucially, to meet these ‘wants’, we need supply. So, want to start a business? Currently, less than 8% of commerce takes place online. The internet economy is a nascent new-born, and this is only the beginning. Luckily, we have some amazing businesses out there whose raison d’être is to increase that 8%. Chief among them is Shopify and Stripe. Shopify reduce the friction involved with setting up your online store. The Stripe API reduces the friction involved with accepting payments on your online store. Stripe Atlas reduces the friction involved with legally setting up a business.

Companies like Shopify and Stripe are working to create internet infrastructure that will enable anybody to start a business and participate in the global economy, regardless of where they are, regardless of who they are. Currently, the world is organised in such a way that the ambitious, smart, and driven 20-something year old in Dakar with a billion dollar idea has a far, far lower chance of succeeding than their counterpart in Dublin. This isn’t right and it doesn’t have to be this way. With the right internet infrastructure, the barriers of entry to the global economy, and opportunity broadly, can be lowered. In that world, maybe the billion dollar idea in Dakar doesn’t wither on the vine. In that world, maybe the lottery of where you are born and what you are born with matters less. A world where your ideas, your skills, your determination and your execution matters more. This is the world I want to live in.

In a later post I will take a closer look at Stripe, and how they leverage another one of my favourite concepts in technology and business — network effects.

Go raibh maith agat (thanks!)

Thanks for reading! This is my first attempt at writing on the internet, so please let me know what I could do better. If you liked something in here, let me know about that too. Slán!