ExperienceCurve by Karl Long

I proposed in the past (in a MBA paper) that one of the only sources of sustainable competitive advantage in e-business was to leverage network effects (see Reeds Law, the power of group forming networks).

And I just found a fascinating reference (Songs of Experience: Everyone’s a User) to the idea that a common feature of experience design across multiple industries is the idea that users should be treated as “Nodes” (by Azeem Azhar who keeps a blog), in other words there participation in the network can influence the network. Now if the number of user nodes actually influenced the value of the network “by design” then that could lead to significant competitive advantage. (continue for a longer version with examples)

The Cap Gemini Ernst & Young Center for Business Innovation published a paper by Azeem Azhar from there “future of user experience conference” called Songs of Experience: Everyone’s a User

The paper had many interesting points but the one that caught my eye was the idea that experience design shares common attributes across industry implementations, from McDonalds to theme parks to web sites.
The three commonalities are, and I quote:
“Observation: watching users or consumers as the expression of the user experience. Users should not be judged on a false objective standard of behavior, but on what they actually do.

Users as nodes: instead of seeing customers, staff and partners as mere output devices, treating them as nodes. Formally draw on their experience to inform the shape of the experience, by engaging them in dialogue. Complex systems need many sensors.

Self-learning systems: accepting that our first attempts may not be perfect, but ensuring the framework we have built allows us to modify and improve the experience we offer. Feedback is critical for such a self-learning system.”

The second point created a fascinating connection, for me, between user experience and competition was triggered here with the use of the word “nodes”.

I proposed in one of my earlier papers that one of the only forms of sustainable competitive advantage for e-businesses was to take advantage of network externalities or the network effect (see Reeds Law, the power of group forming networks). I think that in the realm of experience design treating users as nodes could be a key source of competitive advantage.

Two major examples:
amazon.com treats its customers as nodes by :
capturing customer usage information and reflecting it back (other people that bought this also bought this)
Providing tools for customers to publish pertinent information on products (ratings, lists etc)

ebay.com
every member of ebay adds adds to the value of ebay, the value of the ebay network grows exponentially. The more succesful transactions a user has on ebay, the higher there rating becomes making future transactions easier.

For internal systems like Knowledge Management:
capture relevant content drives usage, drives capture of relevant content ….