Business

Banning Targeted Advertising?

| Jorge Arango

Gilad Edelman writing in Wired:

The task of regulating an increasingly out of control digital environment often looks like a multifront war against various enemies: privacy breaches, hate speech, disinformation, and more. What if we had a weapon that could bring all those armies to their knees?

The article highlights a “nascent movement” of people who believe the business model underlying these environments — targeted, personalized advertising — is the main problem. Rather than focusing on front-end efforts to legislate what happens in these places, a more impactful approach would be to make the business model itself illegal.

If you’ve read Living in Information, you won’t be surprised to know I agree with the assessment that business models are critical. That said, I don’t think there’s a one-size-fits-all approach to this issue. I can easily imagine targeted advertising would make some information environments more useful while also supporting user goals.

As a user myself, I’m willing to give up some of my privacy if I get something tangible in return, and I clearly understand who’s using my information and for what purposes. For example, I don’t mind if the place where I do my shopping shows me ads that meet my needs. I’m there to buy stuff, after all, and the place knows who I am and my preferences and shopping patterns. Knowing those things, it can tell me about new products that will make my life better. That has value to me.

I don’t feel the same way about places where I meet with family and friends or have civic conversations with my neighbors. The general idea behind targeted advertising — that the system will learn my preferences so it can better persuade me — is profoundly at odds with my goals in those environments.

Why Don’t We Just Ban Targeted Advertising?

Designers as Team Players

| Jorge Arango

A useful reminder by Enrique Allen in Designer Fund’s blog:

Often as designers, our natural tendency is to emphasize the importance of our craft, instead of focusing on the impact it has on the bottom line.

The post goes on to describe a high-level framework of twenty areas (“levers”) where design can impact the bottom line, including specific ways that the organization can make and save money.

For designers to be effective, we must be aware of the business’ needs and aspirations. We’ll only be taken seriously to the degree that we can help the organization succeed towards the dimensions it cares about.

Of course, that doesn’t mean these are the only dimensions worth pursuing. For example, the design process may uncover a situation in which a particular business decision may be at odds with the needs and aspirations of the organization’s customers. Designers can then help resolve the impasse.

But we can only do so if we’re taken seriously by our colleagues. And we’ll only be taken seriously to the extent we’ve shown commitment to helping the business grow. As I’ve written before, it’s misguided to think of design as “fighting for the users.” Instead, our aim should be to bring various forces – including the users’ needs — into balance.

Designers enjoy a unique vantage point in the organization. We are connectors. We’re tasked with understanding the needs and concerns of various stakeholders — including our users — and making things that meet those needs efficiently and effectively. We test and refine these things, over and over. Through this process, design can bring alignment and clarity to the organization.

There’s incredible power latent in modeling possibilities. The degree to which we can employ this power towards the common good will depend on the degree to which we act as team players.

The 20 Levers for Return on Design | Designer Fund

JFK’s Apollo Vision Statement

| Jorge Arango

Complex projects require coordinating and aligning the efforts of many people in different roles and groups. The job is possible only if everyone is clear on what they’re striving towards, and are compelled to do so. This calls for leaders to clearly articulate the project’s vision.

The importance of having a clear, compelling vision is one of the great lessons of the Apollo moon program. U.S. President John F. Kennedy laid out the vision in a speech delivered to Congress in 1961. This speech was meant to convince lawmakers of the worth of investing in space exploration. Essentially, the President was asking his stakeholders — Congress, and more broadly, the people of the U.S. who they represent — for funding for the project. This is something anyone working in a leadership position can relate to.

President Kennedy’s presentation is a model of how to clearly articulate and sell a vision, so it’s worth studying its highlights. The speech starts by framing the space program in the broader geopolitical context of the Cold War. The Soviet Union had by this point made several impressive technological advances, including launching Sputnik (the first artificial satellite) and sending the first man into space. U.S. efforts were seen as lagging behind the Soviets’, so the President started his remarks with the following statement:

Continue reading →

Design as an Antidote to VUCA

| Jorge Arango

A short presentation I shared as a videoconference with Rosenfeld Media’s Enterprise Experience Community.

In the early 1990s, the U.S. Army War College created an acronym to describe the geopolitical situation following the Cold War: VUCA. It stands for volatility, uncertainty, complexity, and ambiguity, four characteristics they saw as defining the multilateral post-Cold War world. The rise of information technologies — and the internet in particular — has radically transformed our political, economic, and social reality. We are all now living in a generalized state of VUCA. We see signs of it everywhere — including the enterprise.

Design can be a powerful organ for organizations dealing with VUCA. In this presentation, I give some reasons why. I also cover some reading materials that have led me to this line of thinking. I was gratified to see participants in the videoconference suggest other resources worth investigating if you’d like to delve into design’s more strategic value; I’ve added those recommendations into my reading list.

Books I referenced in my presentation:

I also called out these recent Medium posts:

Other folks in the call suggested the following additional resources. (I’ve listed them here in the order in which they were suggested.)

I have a lot of reading to do! I was familiar with some of these resources, but not all of them. That’s one of the upsides of sharing incipient ideas with a smart group of folks like the Enterprise Experience community: you get to hear from other folks who know more about other parts of the domain. I’ll be digging into these books, posts, and videos for sure!

Towards Greater Diversity in Design Teams

| Jorge Arango

The websites and apps you interact with are parts of systems. These systems are often commercial organizations with responsibilities to various stakeholders, including the owners of the business, its employees and managers, its customers, and — more broadly — the rest of us who live in the society where the organization operates.

The people who “own” these digital products and services — product owners, business line managers, etc. — are tasked with being good stewards of these systems. They’re called to steer them towards greater value for stakeholders in the short and long term even as conditions around the systems change. Design decisions will change these systems — even if slightly. For example, the team could develop a new feature, fix an existing (and underperforming) feature, or address an entirely new user audience.

These are systemic interventions. Their effects are seldom limited to the task at hand; a seemingly minor alteration could have a large impact downstream. As a result, product owners must look out for second- and third-order effects; they’re looking to intervene skillfully as the system faces perturbations in its context.

To do this, product owners must become aware of the possible options open to them and their potential effects. Their ultimate goal is to achieve dynamic stability: for the system to continue serving its intended purposes as it evolves over time to address changing conditions. This calls for these folks to become systems thinkers.

One of the central tenets of cybernetics — the science of systems — is the Law of Requisite Variety. It’s relevant to people who aim to control systems. In cybernetics, the word variety has a special meaning: It refers to the number of possible states of a system. The Law of Requisite Variety suggests that skillful control of a system requires (at least) an equal number of possible responses to its number of possible states. This is usually articulated as a maxim: only variety can destroy variety.

Translation into humanspeak: a system with few possible states requires a small range of responses, whereas a system with many possible states requires a broad range of responses. This idea has proven to be useful in a variety of fields, including sports, ecology, management, medicine, and more. The more complex the system you’re dealing with, the more states it can be in. Controlling such systems requires at least an equal amount of flexibility in your ability to respond to changes.

Of course, not all digital products and services aim to serve the same purposes. Some are simpler — and less ambitious — than others. Simpler systems will have — and require — less variety. But many digital products and services are very complex and can have many possible states. A digital system that aspires to become the de facto environment where we interact — socially, commercially, civically, etc. — will have a huge range of possible states. The folks who design and manage these systems face a great deal of variety. To intervene skillfully, they need a larger range of possible responses. Among other things, this calls for greater diversity in their teams.

How to Measure Network Effects

| Jorge Arango

Li Jin and D’Arcy Coolican, writing for Andreessen Horowitz:

Network effects are one of the most important dynamics in software and marketplace businesses. But they’re often spoken of in a binary way: either you have them, or you don’t. In practice, most companies’ network effects are much more complex, falling along a spectrum of different types and strengths. They’re also dynamic and evolve as product, users, and competition changes.

They go on to outline sixteen ways in which network effects can be measured, grouped into five categories:

Acquisition

  • Organic vs. paid users
  • Sources of traffic
  • Time series of paid customer acquisition cost

Competitors

  • Prevalence of multi-tenanting
  • Switching or multi-homing costs

Engagement

  • User retention cohorts
  • Core action retention cohorts
  • Dollar retention & paid user retention cohorts
  • Retention by location/geography
  • Power user curves

Marketplace metrics

  • Match rate (aka utilization rate, success rate, etc.)
  • Market depth
  • Time to find a match (or inventory turnover, or days to turn)
  • Concentration or fragmentation of supply and demand

Economics-related

  • Pricing power
  • Unit economics

I love it when somebody adds granularity and nuance to a concept I previously understood only in binary terms. This post does that for network-centric businesses.

16 Ways to Measure Network Effects

Recognizing the Need

| Jorge Arango

As designers, we’re called to improve our clients’ conditions. This, in turn, requires that we improve their client’s conditions. The “ask” usually comes as a request to move some variable relevant to the business: increase engagement, improve conversions, drive revenue, etc. But these are symptoms, not causes. You don’t design to drive revenue; revenue is the result of successfully meeting customer needs.

Charles Eames said that recognizing the need is the primary condition for design. While the project may be striving to drive revenue, that’s not a need. Engagement is not a need, nor is conversion. Those are business goals. What’s a need? More often than not, that’s up to the designer to uncover. You may speculate — but must research. You’re changing the state of the world. Who will benefit? How will they benefit? How does the change map to their current understanding — if at all?

Sometimes the need is obvious, but often it can be quite subtle. In some cases, you’ll be addressing a range of needs, some more relevant than others. Being clear on what they are — and having clear priorities — can be challenging. Different stakeholders may place more emphasis on some than others. Some needs will appear to conflict with others. Recognizing and clarifying the need is critical, and it won’t come with the “ask.” Framing the question correctly is essential if one is to produce a relevant answer — and that’s up to designers.

#1 New Release in…

| Jorge Arango

I’ve worked in digital information environments for most of my career. Feedback loops in these systems are close to instantaneous. For example, you can see how many people are using your website almost in real-time. You can analyze their flows through the environment and make adjustments as required. Not so with books.

Living in Information has been out for a month. As you may imagine, I’m very keen to know how it’s received. There’s no equivalent to Google Analytics to see how a book is doing, so I’m cobbling information from various sources. For example, I’ve set up a saved Twitter search for the book’s title, which I check almost daily so I can interact with readers. And of course, I’m also regularly visiting the book’s Amazon page looking to see if people are leaving reviews.

(Please — if you’ve read the book, leave a review. It doesn’t need to be a five-star review; any rating helps. This article in USA Today explains why Amazon reviews are so critical.)

Shortly after launch, I was surprised to see this little notice on the book’s Amazon page:

“Bam!,” I thought. “#1 New Release in Ethics!” I was proud and excited. I can’t imagine ethics is a hot-selling category, but still… When I visited the book’s page a couple of days later, the little notice was gone. “Oh,” I sighed. “That was that.” But later that day I saw it again. And then, a few days later, I saw this:

Living in Information #1 New Release in Web Site Design

Yikes! Web site design is a larger category than ethics. That must be a good thing, right? Still, I’m puzzled by the whole thing. Why were these banners appearing and disappearing? How were these categories chosen? How long is something considered to be a “New Release”?

I’ve been trying to find information about Amazon’s “#1 New Release” feature, but haven’t found details on how the algorithm works. (As expected; companies usually aren’t forthcoming with this sort of thing.) The one on my book’s page seems to change hourly. (At least.)

The “#1 New Release in…” banner probably affects book sales. I’ve run across it before as a buyer, and it’s influenced my understanding of how well-received a book is, encouraging me to check it out. It’s a good example of algorithmically-driven context-creating elements that can tweak an information environment to change behavior.

Why Don’t You Make More of X?

| Jorge Arango

Anything you make enters the world as part of a context; nothing is truly new. As a result, its reception depends significantly on how it addresses its relationship to the things that preceded it. Let’s say that you work for a company that is known for making sprockets. (Let’s call it ACME.) ACME decides to create an information environment to serve as a community for sprocket experts. Inevitably, this environment will be evaluated in the context of the company’s trajectory thus far. It’s not starting from scratch; instead, it rides on its maker’s reputation in the field of sprockets.

This is useful when the new thing builds on the organization’s strengths. However, sometimes the opposite is true: an organization launches something to try something new, to diversify its efforts. In those cases, its reputation may hinder adoption of the new thing. For example, ACME may want to launch an app that appeals to widget-makers instead of sprocket experts. Both the widget-makers and sprocket experts may be confused. The former may think, “What does ACME know about widgets? Aren’t they the sprocket experts?,” while the latter may think, “Doesn’t ACME care about sprockets anymore? What are they doing?!” Whatever the case, it’s unlikely that either group will evaluate the new thing on its own merits. ACME’s reputation and trajectory will influence how they think about it.

This conundrum must be dealt with. Organizations that aspire to longevity must keep evolving; this requires that they branch out to try new things. (Of course, they don’t need to be as radical as moving from sprockets to widgets!) But they must do so in a way that doesn’t confuse or turn off its core constituencies. 
I’m reminded of something that the musician and record producer Brian Eno wrote about the impact of fan expectations on his own (eclectic) body of work:

… success has many nice payoffs, but one of the disadvantages is that you start to be made to feel responsible for other people’s feelings: what I’m always hearing are variations of “why don’t you do more records like – (insert any album title)” or “why don’t you do more work with – (insert any artist’s name)?”. I don’t know why, these questions are unanswerable, why is it so bloody important to you, leave me alone… these are a few of my responses. But the most important reason is “If I’d followed your advice in the first place I’d never have got anywhere.”

I’m afraid to say that admirers can be a tremendous force for conservatism, for consolidation. Of course it’s really wonderful to be acclaimed for things you’ve done – in fact it’s the only serious reward, because it makes you think “it worked! I’m not isolated!” or something like that, and it makes you feel gratefully connected to your own culture. But on the other hand, there’s a tremendously strong pressure to repeat yourself, to do more of that thing we all liked so much. I can’t do that – I don’t have the enthusiasm to push through projects that seem familiar to me ( – this isn’t so much a question of artistic nobility or high ideals: I just get too bloody bored), but at the same time I do feel guilt for ‘deserting my audience’ by not doing the things they apparently wanted.

Naturally, Eno is writing from the perspective of a creative artist. Many businesses can’t afford to challenge their customers in this way. But this idea of success as a force that nudges towards conservatism and consolidation has broad implications; it’s something to be acknowledged and dealt with as an organization embarks on exploring new grounds.