Monday, April 1, 2013

Trade Off Book Review

Trade-Off written by Kevin Maney
"Why Some Things Catch On, and Others Don't"
"The Ever-Present Tension Between Quality and Convenience"

This is a great book to read because it opens your eyes and understanding to things that are already present around you. Things that you might have had impressions about, or figured out if you happened to be studying them, are laid out clearly so that you can begin to benefit from the knowledge immediately.

The premise of this book is exploring the concept of the Fidelity Swap: the trade-off between the fidelity of an experience and its convenience. Listen to an MP3 (super convenient) or go to a concert (very inconvenient but a rich experience).

In the world of business the fidelity swap is key to success. You strive for high fidelity (think Bose) or high convenience (think Wal-Mart). If you strike out to achieve both, you end up chasing a mirage which ultimately sinks you because you are neither convenient, nor high enough fidelity. Kodak fell into this trap. Starbucks did, too, it was an experience, it was expensive, but then it pushed expansion so hard, and sought the convenience of being commonplace. Compact Starbucks stands were nothing more than a glorified vending machine, not a special customer experience.
Apple's iPod went this route. It was first exclusive, and ended up ordinary. Without the development of the iPhone, Apple today would be a very different company.

The dynamic portion comes into play when you consider the effect that technology has on continually pushing and expanding the limits of fidelity and convenience. A high powered cell phone might be high fidelity when it first launches, but then as technology improves, it quickly is surpassed and overcome. Innovation is the key to keeping a business moving towards either more convenience or higher fidelity.

Exploring another example involving IBM and the server business, was this quote.
US Hardcover, pg 145
"Some competitor can always uncover a market just below your fidleity--at good-enough fidelity," Wladawsk-Berger said. "If they discover good-enough fidelity that's way down in cost, they'll kill you. It happens all the time. At IBM, it put pressure on us to either continue to differientiate by improving fidelity, or contininuting to innovate oto offer fidelity oat lower prices--or exit that segment of business and move on. The question often becomes, 'Showuld we go up, down, or exit?'"

Should you read Trade-Off: Why Some Things Catch On, and Others Don't ? Definitely, if you are in business, either by yourself as an entrepreneur or are in any level of management. It's important to understand where your product or service fits in the market and to properly understand the difference between convenience and fidelity (quality). The book describes numerous examples of success and failure in a compelling way that keeps the reader interested throughout.

If you've read this book, please share your thoughts in the comments below.

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