Ben Gilbert: commitment

Transcript context

…I have to confess a bias here. As you all know, economics roots were in the Scottish Enlightenment. If you think of Adam Smith's ideas, David Hume's, and so on, it's the idea of self-interest. Behavioral takes a little bit of a detour from this. It basically says, if you look at people's self-interests, you can understand a lot. I see both of these as being quite self-interested. To phrase this in a much more tongue in cheek way, it's almost as if these companies that have us over a barrel as consumers are saying, look, we're married at this point and as long as you're not going to divorce me, I will become a worse and worse partner to you over time. That feels like the concern to me with companies gaining more and more power over consumers in the long run. If you lead a company that has very high switching costs—and I'd argue for most technical people and non-technical people, an iPhone has very high switching costs—you have to realize there's a conflict there between how much lock-in you have, how you treat your customer and manage it very, very carefully. I often encounter companies where they have a wonderful product-market fit but they don't yet have power. One of the things is, could you develop switching costs? My advice always is don't think about how am I going to lock in my customers, but actually think of it a different way. What is it that I can do for my customers that create value for them? If that proposition has withered away that they're tied to me, then so be it. But think about the value creation part first, or else, you tend to go down these paths of win-lose propositions, which don't end up very well, typically.…

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