Is classical disruption theory good at explaining consumer markets? In this piece from late 2013, Ben Thompson said no.
It was a provocative enough claim that Ben began a podcast with James Allsworth (a former student and co-author of Clay’s) to debate this and related issues. It took about a year, but Ben eventually convinced James that Clay’s theory needed to be revised or at least extended when applied to consumer markets (especially luxury markets).
The key factor in their breakthrough was expanding Clay’s single axis of product performance to 3 axes:
- Clay’s disruption theory focused on the one axis that business buyers most care about: cost-adjusted technical performance (aka return on investment).
- In contrast, Ben explained in 2013 that the theory was undervaluing a separate axis: user experience.
- In Episode 24, James and Ben decided that there was a third axis of performance: emotional value.
I found the Allsworth-Thompson 3-axis framework to be an excellent way of thinking about consumer markets. But I think emotional value is better understood if we break it into two components: “individual emotional value” and “social value”.
To help us think through this, let’s imagine a person who owns two items: a Polaroid photo of a beloved but sadly deceased grandmother; and a beautiful and rare Hermès Birkin handbag. Let’s assume that both possessions have the same emotional value to their owner.
Now, let’s imagine the zombie apocalypse comes and our heroine is the only survivor. She still has her photo of Grandma and her Birkin bag. I would argue that the emotional value of the photo is unchanged while the bag’s emotional value has decreased. The photo of Grandma is as precious as it ever was because it is based on individual emotional value that has meaning primarily to our heroine. In contrast, the Birkin bag had a major social value because it showed our heroine’s taste and status among her community of peers. Now that those peers are gone, the bag has less emotional value.
In summary, I think we should analyze the performance of consumer products along four axes:
- Technical performance
- User experience
- Individual emotional value
- Social value
I hope this four-axis framework will be helpful to the tech geeks among us who are befuddled by how fashion works. What does this mean as tech companies begin selling more to luxury markets? How many tech obervers will remember the importance of user experience, emotional value, and social value when Apple Watch finally reveals it’s pricing? John Gruber at Daring Fireball has the best take:
When the prices of the steel and (especially) gold Apple Watches are announced, I expect the tech press to have the biggest collective shit-fit in the history of Apple-versus-the-standard-tech-industry shit-fits.