Your product is about experiences

In digital product work, the most invisible and at the same time most decisive error is usually thinking of yourself in terms of goods and services. Although studies of the experience economy are decades old by now, powerful inertias like the ones we saw in relation to stories, together with a widespread confusion about the digital as a technology industry, still leave many companies with a poor understanding of themselves — and therefore unable to create, or capture, more value.

The more tangible the raw material a company works with, and the longer it has been established on the back of that material, the harder it finds it to think and act according to an experience economy. Both theories of disruptive innovation and theories of change have helped us see the importance of transformation in already-established businesses.

As I have said on other occasions — regarding the approach of the product management programme I teach at Instituto Tramontana — looking towards the industry of what we call "entertainment" is an effective way both of shedding industrial thinking and of absorbing several of the consequences of this new form of sensibility.

It is worth remembering that Walt Disney was even a pioneer in how he referred to the people buying experiences: his guests. The change of word was not cosmetic. A guest does not consume: a guest is received. It changes who is obliged to take care of the relationship, and it changes what counts as a failure. A product can meet all its requirements and still treat a guest badly.

From an offering to a relationship

Where in traditional economies customers received a set of offerings as something external — commodities, goods, services — now a new kind of relationship is established, one that is economic but also inherently personal. It is the result of an interaction.

Hasn't this always been the case when we read a novel, attend a concert or enjoy a play? Nobody has ever bought "the service of reading". You buy the ticket, and what happens afterwards is not entirely in the hands of whoever sold it.

You are therefore handling emotional states. You destroy them when you think of yourself in terms of mere technical features broken down into a long list of requirements and components. You also destroy them when you think that the goods you work with — cars, insurance claims, films, languages — are THE thing, and that your job consists of distributing and packaging it attractively. What traditional marketing, which a good number of digital companies have never left behind, would call "being sexy".

Emotional states are built out of the product itself, and differentiation comes from how you articulate them. Products are not shop windows or distribution channels for something. They are the way of creating a relationship, ideally a memorable one, with that something.

It is worth being precise here, because "experience" is one of those words worn hollow by use. This is not about adding a pleasant layer on top of a product still conceived as a catalogue. It is about making decisions on what to build while looking at the relationship rather than the inventory.

The business is the user

From this perspective it is natural that we end up dealing with businesses where we say "the business is the user". Note, incidentally, how far the "user" sits from Disney's "guest".

The phrase is usually stripped down to its negative connotation, the use of our data — our behaviour — as the currency of exchange, and the other interesting part tends to be neglected: that this behaviour is also where the link to the business resides. The criticism is warranted and should not be abandoned; but if it stops at denunciation, it misses the part that explains why these businesses work at all.

In the end, two dimensions matter especially in this kind of new business: customer participation, and connection, understood as the atmosphere created between those people and what you invent. Neither appears in a list of requirements. Both can be ruined by a decision taken in a twenty-minute meeting.

Not understanding this is the first step towards being in no position to innovate.