Thursday, June 28, 2007

Apple's iPhone

I was interviewed by the Arizona Republic newspaper yesterday about the Apple iPhone. The hype is getting ridiculous. 30 minutes of every hour-long news show is about the iPhone. What ever happened to the important things going on in the world that some of us would like to hear about?

But to the point, the phone is probably going to be a success, given Apple's history in consumer electronics and the fact that they are getting all this free publicity. But what kind of annoys me is that everyone focuses on the wrong things. The journalist who interviewed me only wanted to talk about the cool technology and the touch screen. That is not what will make the iPhone successful or not. It will come down to whether it is a better combination of phone, music player, and web browser than other portable devices, and at a price customers can afford. Cool can make it successful in year one, but not after that!! After that it comes down to functionality and usability.

Sunday, June 24, 2007

Knowledge v Intelligence in management

Great post in the Becker-Posner blog this week!!! They discuss why brilliant individuals often fail when put in leadership positions. The core issue they discuss is that the brilliant person is often a lateral transfer. In other words, he/she may have general brilliance (information processing and analysis skills), but no knowledge in the particular field. Take someone who has made a career in politics who is made Secretary of Defense. If he/she has no knowledge of the nuances of the Middle East, Southeast Asia, Africa, etc. can he/she understand the detailed information coming from the career civil servants in the department and make policy decisions? It is the civil servants who have the extensive situation schema of the issues that arise.

From a HF point of view, perhaps not. It depends on whether the person also has the ability to how to get that information from the civil servants in a way that can be integrated into the policy schema that must be used to make the ultimate decisions. This takes a different kind of skill than intellectual brilliance. A good focus group facilitator may be more effective in this position. Or maybe they just need a facilitator to run the meeting. The leader must be able to defer to the more knowledgeable civil servants in terms of the basic information and analysis. Many brilliant people have difficulty with this.

Then the President has an even tougher challenge. He/she has to take the information provided by the cabinet ministers, which has already been through one level of "brilliance" filtering and do his/her own filtering to make the ultimate policy decision. If the cabinet minister has lost important details, then the President can't make good decisions. Its like the game telephone, except with lives at stake.

I guess that why government seems so dysfunctional all the time. It is set up to fail.

Saturday, June 23, 2007

set points or variable talent

Arnold Kling's recent post on Econlog got me thinking. He wonders what attributes are limited and which ones can be improved with practice. Clearly, we can exercise our muscles and get physically stronger. Can we do the same with things like altruism, self-control, self-regard, dogmatism, etc.?
For example, if we only have a limited amount of self-control, and we are forced to use it in one area (i.e. to watch our weight), then we have less self-control in other areas (to stop smoking). But if we practice self-control a lot, then maybe we can gain the ability to do more of it.

From a cognitive science point of view, we should be able to practice. If we can strengthen the schema associated with the attribute (self-control), then we can connect it to more responses (smoking). But no one has really looked at what cognitive neurophysiological structures give us things like self-control. I am not sure if it works.

Sunday, June 17, 2007

delayance v deterrence

I was reading a PhD dissertation on military strategy (don't ask!), and the theory that the author was presenting was called delayance. The idea is that what many people consider a kind of deterrence (which is officially defined as when a country (or guerrilla group) doesn't attack because the cost of achieving the victory is greater than the value of the victory) is really delayance (which is when the risk of losing is too high right now, so the country waits/prepares until the risk goes down to an acceptable level.

The difference is subtle but important. In deterrence, you think you will win, but the cost is too high. So you don't try. In theory, unless something changes, you never try. In delayance, you can't win yet, but hopefully you will be able to win later. So you wait, expecting the change to happen.

The same thing can be said of using a system that is too complicated. The equivalent of deterrence is when I think I can figure out how to use a particular function, but the time it would take is too high so I give up. And I don't expect to try again later. This may cause my satisfaction to go down because I have recognized defeat. In delayance, I think maybe I will try later, perhaps when I have more time to read the manual. This optimism may keep my satisfaction from going down, even though most people never get around to trying again. Every time they see the function, they again think - maybe next time.

I suspect that the deterrence/delayance difference is related to locus of control. For users with an internal locus of control (who feel that they are in control of their lives), they probably feel delayance. For users with external locus of control (who blame the world for their failures and credit the world for their successes), they probably feel deterrence.

This is why it pays to keep up on other fields of study. You never know when something will light up an idea in your own work.

Thursday, June 14, 2007


Sometimes I am joking when I say this, but usually it is true - Human Factors is the solution to many of the world's biggest challenges. Here are two examples I thought about on my way to work this morning, primed by NPR stories on the radio:

1. The sub-prime mortgage crisis

As usual, the proposals coming out of Congress are way off the mark. Either they will underregulate and not solve anything, or they will overregulate and keep people with mixed credit histories from getting mortgages. What they need to do is apply human factors. The regulation should not say what mortgages are allowed or not allowed (but keeping the basic framework defining what borrowers can afford). It should require lenders to inform applicants exactly what the terms and risks of the loan are and then let them choose. This requires human factors because the current financial and legal gobbledygook is incomprehensible to the average borrower. A good human factors analysis could identify some structure that would solve the problem.

"The payment will start out as $1000 per month. It will stay at this level for 2 years. After that, it can go up by as much as $250 per month every year. So in 6 years, the worst case is that you will be paying $2000 per month. Given the low level of current interest rates, this is likely. If you are unable to pay, it may be possible to renegotiate, but more likely is that the bank will foreclose on your house and you will lose it."

2. The multiple challenges of prescription drugs (costs v benefits, risk communication). Again, the government is going to regulate by determining what can be sold, where, why and for how much. Instead, they should use a market-based solution, but requiring enough information for consumers to make informed decisions.

"Nine out of 10 people who take this drug for heart disease will not die from it for at least ten years. But one person will. One out of ten people will get pancreatic cancer. Three out of ten will have trouble sleeping. If you are willing to take these risks, go ahead."

And then when approving drugs, we can do a cost/benefit analysis to estimate if the aggregate effect on health care will be positive. Then leave the individual decisions up to the people.

Econlog had a post a while ago (sorry - I couldn't find the link) suggesting special (i.e. well marked) stores that sell unapproved drugs. As long as the information is good, people should be allowed to take the risks - knowing that if something goes wrong they can't sue or use public money to pay for the consequences. Not all unapproved drugs would be there, but the ones that are either promising and just not fully tested yet, or the ones that have significant benefits, but also high risks or side effects. For example, if I have cancer and 5 years to live, I should be able to buy a drug that will extend my life by 6 months, even if it increases my risk of developing some other disease ten years down the road. Or maybe I am willing to take a 20% risk of incontinence to eliminate my allergies. It should be my choice.

Any other examples???

Sunday, June 10, 2007

customized for the customer

I have always been a strong supported in getting a good understanding of the customer as the basis for product and service design. There are so many great examples of this, that it should be a no brainer. But then there are so many examples where companies develop a new technology that they force on customers assuming they will love it, that apparently it is not a no brainer after all.

This week's issue of Business Week (June 11, 2007). provide great examples of both.

1. Jamba Juice wants to go beyond just a smoothie company. So they are trying to find some new products that will expand their product line. They conducted real user testing and focus groups to find ways to convert the juice smoothie into a light meal. And when at first they failed, they put the idea on hold - they didn't sell it anyway and hope for the best. Next month, they are rolling out a series of new products that succeeded in their recent testing. Good for them!!

2. DeBiotech discovered that one of the problems with current insulin pumps for diabetics is that they have to replace the whole unit - which is very expensive - or use self-injections, which is inconvenient. So they developed a pump with a replaceable reservoir. Simple mechanically, but it shows that they thought about the details from the patient's perspective.

3. Marriott and Nickelodeon are partnering on some new hotels that immerse the kids in the Nickelodeon experience. They did some real user research and found a balance that makes kids and parents happy. They also found a way to integrate business services so that all kinds of family trips can be supported. This is the kind of new product that has a huge capital investment up front, so it is great that they did some serious testing before throwing these sums of money at the idea.

4. Disney has a big and growing market in Russia. But rather than increase the supply of American movies they ship over, they decided to make some local movies using Russian actors, speaking Russian, using old Russian fairy tales for plots. This is even though the new Pirates movie hit a record for foreign film box office.

5. Sotheby's discovered that their clients fear risk. So they innovated their business model to alleviate the client's risk. They guarantee minimum prices for some art auctions in return for a cut of any price above the minimum (in addition to their normal commission). This takes on some risk for themselves, but not as much because they have more expertise at predicting the final price, and if they do enough of them, they can balance their risk by winning some and losing some.

6. Several consumer electronics companies are coming up with 'tweeners, products that are between a laptop and a smartphone. Sometimes you need more than a smartphone (in function), but less than a laptop (in size and weight). So for these times, you need a 'tweener. But who can afford a third device (selling at $1000-2000)? Only business travelers. So I am less sure that they have found a market, or if they are forcing the market.

7. Joost is a service that provides full length TV shows via the Internet. Instead of going the YouTube route, they are providing only official content and protecting the copyright. To get the content, they have to sign agreements with the content providers (the channels). Jumping ahead a few years to when they will have the needed bandwidth, HDTV is every household, and all of the channels signed up, is this a service people want? Is it any different than on-demand services we already have? They claim that because they will have lots of information about each user, they can replace five untargeted ads (for products the viewer has no interest in) with a single targeted one (a product they are likely to be interested in). So users will be willing to watch the ad because there is only one. Hmmmm. Not sure about this one either.

Thursday, June 07, 2007

When irrationality is rational

Bryan Caplan, one of the bloggers on one of my regular blog reads, has a great insight. When an irrational view has no personal consequences but feels good to have, such as when we argue about how great our favorite sports team is (when it really isn't all that), there is actually a net benefit of having the irrational view. We can happily let ourselves succumb to biases such as the confirmation bias to strengthen the view still further. We see the teams latest win as evidence of how great they are, but ignore their last seven losses as a streak of bad luck.

The problem arises when these all add up. There are many political views that we have very little impact on as individuals, but may feel good. For example various forms of protectionism. Even if the economics shows that free trade, open immigration, etc are good in the long run for the economy, it may feel good to blame your work-related stress on an anonymous worker or company in a foreign country. The more foreign, the better.

But what if thousands of people walk around feeling good about blaming these anonymous foreigners. Pretty soon, the politicians who really do have an effect on economic policies start listening. In order to get re-elected, they have to enact policies that are wrong. All of a sudden, these safe irrationalities have real consequences. A characteristic of our cognition that may have been evolutionarily adaptive now because damaging at the society-level.

What can we do about this? We can force everyone who wants to air their political views to get some policy education and really think about their views first. But of course, this is not realistic. I don't have a solution to this, but I am willing to hear proposals.

Tuesday, June 05, 2007

niche products for niche customers

We often talk about making sure that our systems match the needs of expected users. That is the basis of Human Factors. But you can also go in the opposite direction - find some very unique users and customize an existing system that they currently don't use. This is the basis for some very interesting business models. This month's Trendwatching (one of my favorite sources of unique business ideas and innovations), has a good strategy for this. There are many people who want to purchase products or services made locally. This can be for environmental reasons (less gas wasted on transportation), supporting the local economy, or just because some people like to support their neighbors. Many are even willing to spend extra money for the same product if it is local. So the trick to this strategy is to create the marketing around your product promoting its local story.

And there there are the VERY unique niches. How about this one at Omlet. They have a product that enables urbanites to raise their own egg-laying chickens. People who live in city apartments can raise 2 egg-laying chickens in a nice compact "Eglu" and have fresh eggs every morning. I can't speak for the usability of the Eglu design, but if they have identified enough of a customer base to make the business profitable, all I can say is "wow."