I just got around to reading last week’s Sunday New York Times business section and was amused to find the article Why Trying New Things Is So Hard to Do by Sendhil Mullainathan. I just wrote about how people hate to change three days ago!
Professor Mullainathan’s article is written from a first-person viewpoint. He admits to having a massive Diet Coke habit – two liters a day – and uses that as an example of why people don’t change. He points out that he could easily and cheaply experiment by trying a cheaper, generic soda. If he liked it he’d save a lot of money over years of soda drinking. And if he didn’t he could either try another generic soda, maybe a store brand, or go back to Diet Coke.
He points out the relative upsides and downsides of experimenting:
When the same choice is made over and over again, the downside of trying something different is limited and fixed — that one soda is unappealing — while the potential gains are disproportionately large. One study estimated that 47 percent of human behaviors are of this habitual variety.
Keep that number in mind if you decide your latest greatest invention will require consumers to change their behavior!
There are at least three reasons people don’t or won’t change their habits:
Habits are powerful. We persist with many of them because we tend to give undue emphasis to the present. Trying something new can be painful: I might not like what I get and must forgo something I already enjoy. That cost is immediate, while any benefits — even if they are large — will be enjoyed in a future that feels abstract and distant.
Overconfidence also holds us back. I am unduly certain in my guesses of what the alternatives will be like, even though I haven’t tried them.
Finally, many so-called choices are not really choices at all. Walking down the supermarket aisle, I do not make a considered decision about soda. I don’t even pause at the generics. I act without thinking; I automatically grab bottles of Diet Coke as I wheel my cart by.
There’s a strong bias on the part of consumers as well as government policy makers in favor of the status quo. So again, founders beware – if your invention is going to require any change in government policy, rules or regulations. This is one reason why biotech companies need to raise so much capital – the very high cost of experimentation and attendant government regulation.
Oddly Professor Mullainathan, who is an economist, never brings up the scientific method, which is truly the bedrock of scientific progress and is built on the process of experimentation. He sees things through a personal, not scientific, lens:
Experimentation is an act of humility, an acknowledgment that there is simply no way of knowing without trying something different.
Understanding that truth is a first step, but it is important to act on it.
Founders must realize that though you may follow the scientific method with your startup: creating a hypothesis, designing an experiment to test it, gathering data, analyzing the results and deciding if the hypothesis was correct or not on those results, this is NOT how your customers either think, decide, or behave. Perhaps I’m biased by my undergraduate degree in social psychology, but I believe that understanding the social sciences, in particular psychology, sociology, and cultural anthropology can help founders better understand their customers and as a result of that understanding, better serve them.