Book Review: The Change Function:
Why Some Technologies Take Off and Others Crash and Burn

A Wall Street analyst says that the culture of technology companies needs to change in order to fix the problems that drive away potential buyers.

by Alex Goldman ISP-Planet Managing Editor [June 6, 2006]

We first heard about this book at the Marconi Foundation event honoring Gordon Moore. Dave Burstein, who got us into the event, introduced us to Pip Coburn and mentioned that Coburn was writing a book. Burstein said that Coburn had a mental tool that worked on a surprisingly large number of tech issues.

We were introduced to this tool during a conference call promoting the book (see Coburn Ventures Conference Call: "The Free World and Its Implications"). The book is called The Change Function: Why Some Technologies Take Off and Others Crash and Burn.

As an analyst for many years, Coburn has evaluated many tech business ideas and interviewed the management of many startups. Some of the book is simply the distilled wisdom of years of frustration talking to people who saw part of a problem but not all of it, had part of the solution and assumed everything else would fall into place without effort on their part, using the escapist phrase, "and then we just have to execute."

He has developed an intimate, narrative style, all in plain English, that makes the book easy to read. That doesn't mean you'll read it quickly, however, because even though the insights seem simple, you'll have to pause and think.

Focus on the pain point
Coburn says that in spite of rapid and impressive innovation, a startlingly large number of tech ventures fail. They fail because they are focusing on the technology, failing to serve the customer.

Potential customers weigh the difficulty of not having a product, which Coburn calls the "user crisis" against the problems that come with learning something new, which he calls the TPPA, for Total Perceived Pain of Adoption.

He illustrates how numerous technologies failed. Often, the crisis is that the company isn't selling enough product, and tries to invent a new one even though there's no market for it (such as picture phones or tablet PCs).

But perhaps the most interesting example is a company whose management he interviewed even though he expected the interview would be a waste of time.

They were an ASP, and when he asked them why they would succeed when so many others had failed, their answer quelled his fears. The ASP said, "They choose us because we are codesigning and codeveloping the product in a very iterative fashion. . . we don't sell top down to CEO/CFO/CIOs. So our utilization is really high because users codesign what they really want as opposed to what management dictates."

That focus on the user, Coburn says, is what has made salesforce.com successful where so many other ASPs failed.

No pain, no gain
Technology companies need to implement iterative processes. An iterative process is an ongoing process, where new lessons are regularly incorporated into the product. In contrast, many software and product releases upgrade only every year, and sometimes even less frequently.

Technology companies need to make mistakes and learn from them.

Technology companies need to be able to listen to customers.

Like many useful insights, this one seems obvious, but Coburn shows how billions of dollars have been wasted ignoring it. Time and time again, from satellite systems to picture phones to tablet PCs, companies risked billions of dollars on technology-centric visions that delivered little or no benefit to users.

He shows that companies continue to risk money in this way.

But perhaps the Bells have found a solution to this problem: just pretend to spend. In a short section of RBOC fiber deployments, he points out that the technology benefits the telcos, but delivers little to the user. Coburn concludes that the RBOCs will roll out fiber on a tactical basis to match cable. He writes, "it's unlikely the telcos will roll out at the pace implied in brash public relations announcements since a boom in cap expenditures would likely lead to a vicious downward share price spiral."

For those that want to, there's a way to deliver value to customers
Companies should package their services to make them attractive to customers, and name them in ways that make sense to customers (use smart naming: the Datsun 200ZX kind of name should be replaced with a more descriptive name like Mustang).

It reminds us of what Robert Schovenberg, CEO of CM4all, told us in the article Handling the Thermodynamics of Webhosting:

"For years, the focus has been on technical customers, advertising in PC magazines, focusing the pitch on FTP upload and storage data numbers. But most consumers don't want to think in technical terms. They have birthday parties and hobbies and want to use a website to communicate about them. This requires an intuitive, no install website builder tool."

One company making this adjustment, Schovenberg says, is GoDaddy. The company is actively advertising personal websites for weddings, resumés, photo albums, and other similar uses. "The prerequisite for a service like this," Schovenberg says, "is that it must be easy to use. You have to be able to integrate a weather forecast just by clicking. For example, a birthday party might be outdoors or indoors depending on the weather."

In the conclusion of the book, Coburn summarizes the theory. However, we feel that the book dwells on the problem more than the solution, and that if Coburn's theories are implemented, he will be able to produce a second book, detailing what goes right and what can go wrong when a company focuses on making technology for the customer instead of trying to persuade the customer they need the technology.

We look forward to reading more from Coburn.

Remember, it may sound like mere common sense, but common sense is a full time job for the head of a company.

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