A dear friend of mine was asking me about my 1994 article on Managing in the Marketspace, and I wanted to share some of my email to him because I think the overall point is more general than the narrow conversation we were having. In the article which I co-authored with Jeffrey Rayport, we pointed out that more and more of commerce was simultaneously competing in a physical world, which we called the marketplace, and an information world, we called the marketspace. We said that content, context and infrastructure were the central building blocks of both. See the illustration below.
I believe that in the marketspace the company that creates the most continuous experience wins. Put another way, the essence of what we called context is cognitive continuity; the essence of content is getting what you want, and the essence of platform is convenience of access.
In the marketplace, content and context were often defined by the production capabilities of the firm creating the product or service. For example, the timing of the newspaper, or the one-way-ness of television was first and foremost due to the platform limitations, and to some lesser extent by business model and the creativity (or lack thereof) of the company providing the product/service.
With this in mind, we can see some reasons for success by some companies. For example, one of the critical reasons Bloomberg has been, and continues to be so successful is that his customers, by and large, stay put -- and were used to looking at terminals and calling on phones all day long. Bloomberg integrated and augmented the information delivered to that "spot" -- e.g. there was little violence to their current cognitive context and experience expectations. As far as I know, he was the first guy to provide the dual screen interface. He created special function keys. As he grew the complexity he built the mental model of what a Bloomberg experience is -- not unlike iTunes (from an experience standpoint). He also resisted opening up the content/context/platform stack. I know from an old Reuters case we used to teach at Harvard Business School, Reuters did open their stack and allowed people to buy pieces of their content, not just the whole shebang. Bloomberg did not make the strategic mistake of thinking he was in the content business -- he refused to provide any unbundling. Given that his product is a small cost that provides leverage for huge decisions, he had all kinds of leverage to keep prices high.
This new world of marketspace has big takeaways for the IT department in that they need to completely renovate how they do their enterprise IT to be driven from the outside in -- not the inside out. IT needs to be able to integrate with new data about their customers to provide great continuity at scale. There's a great video about Geoffrey Moore at Google which is long, but worth a look if you have not seen it. Moore is saying a lot of the stuff we used to say in our marketspace course, and he's translated it to the IT department. It's pretty cool.
A strong differentiator for any firm nowadays is to have cognitive continuity for their customer base. By cognitive continuity I mean a continuous context in which people can feel comfortable, entertained, and safe. It is my hypothesis that this continuity decreases cognitive stress and thereby is a key benefit of your company's offering.
Many people have decried the increasing fragmentation of life in the modern age. I'm never totally convinced that today's world is that much better or worse than before. For example, living on the African Savannah -- fending off attacks from hyena, an angry hippo, or the tribe from the next paddock would seem to me to breed its own version of ADHD. I don't know about you, but I'd be a bit hyper in those conditions. So, I believe that we have always had a dynamic relationship between continuity and fragmentation in our cognitive life.
It is interesting to think about who is good at cognitive continuity and who is bad. In my experience, healthcare organizations are simply awful at managing continuity across the doctors, nurses, insurance companies, emergency rooms and other facets of the experience. Disney made many fortunes being great at cognitive continuity. Some hotel chains are great at it -- like Marriott, and others very poor like the Sheraton. I don't know about you but when I book myself into the Sheraton Four Points, I never know what to expect.
The challenge we face as more and more people use digital devices to experience your product or service, is that we don't always know what their mental model is -- but those who figure it out will win.