By Jared M. Spool

Originally published: Jan 01, 1997

Users’ expectations of a product depend on the maturity of its market. Markets for software products go through some predictable stages, each with a different emphasis. By identifying what stage your product is in now, you can anticipate some of the pitfalls that lie ahead.

An "Unusable" Success

Many years ago, we worked with one of the most unusable products I’ve ever seen. Everybody knew it — the developers, the users, and the company management — but nobody cared.

I’m talking about the VCR. When the first VCRs came on the market, there were only a handful of human beings on the planet who could set the time, let alone program the unit. But user-friendliness wasn’t important back then. The VCR let people do something they’d never been able to do before: choose the movies they watched at home. Everything else was just gravy.

Of course, once the VCR gained acceptance in the mass market, people became more discerning about the units they were buying. Authorities like Consumer Reports rated VCRs on their features. Usability began to creep in, manifesting in features like on-screen programming and battery backup (so you don’t have to reset the time). Now VCRs are so common that the consumer market takes them for granted.

The Four Stages

The VCR is one product that has gone through what we call the four stages of market maturity, explained below. Every product belongs to a genre of similar products — think of a genre as the common noun you’d use to describe the product (spreadsheet, modem, database). Products in the same genre move through the four stages together.

Stage 1: Raw Iron

Say your company is the first one to introduce a product with a radically new concept, and people love it. In the Raw Iron stage, users are excited about the product’s most basic capabilities, and they’ll pay top dollar for them. For example, the first pocket calculator had only four functions and sold for over $100. Users are tolerant of (or even oblivious to) usability problems. They are willing to pay for training and sometimes even special technicians to operate the product. All this apparent unusability is fine because these are special products and whatever alternatives the users may have are even less attractive. "Usability" in this stage means simply that the product is in the field and working.

During the Raw Iron stage, the development team is focused primarily on solving technical and delivery issues so they can get the product out the door to its eager new market. For big-ticket items, the sales force may need to do a lot of "hand-holding" with new customers before and after the sale. Training may be a significant source of revenue. The company may also find itself funneling a good chunk of revenues from the new product into beefing up technical support.

This stage doesn’t last long. Competitors quickly see an opportunity to grab their share of the emerging market. The company who pioneered the genre isn’t the one who decides when the Raw Iron stage ends — the first competitor is.

Stage 2: Checklist Battles

In the Checklist Battles stage, one or more competitors have entered the arena, each adding their own bells and whistles to the basic product. In this stage, functionality becomes the key differentiator. Advertisements and marketing materials contain checklists of features. Most genres in the computer industry are currently in stage 2.

In this stage, users gravitate to the product with the feature set that best meets their needs (or if they’re not sure, they’ll pick the most "loaded" product). If choosing between an "easy-to-use" product and one that contains a feature they need, users will always pick the latter. In stage 2, usability means having the right functions.

During Checklist Battles, developers are under pressure to cram in more functionality and fix bugs. Everyone is worried about what the competition is doing and when their next release is coming out. The company may also start feeling some pain due to the costs of supporting the product. This stage ends when vendors run out of functions that make a difference to the market. The companies themselves don’t cause the transition — the customers do.

Stage 3: Productivity Wars

As a genre enters the Productivity Wars stage, all the vendors offer pretty much the same functionality. The market has become more sophisticated. Users become unwilling to accept a product that takes time to learn (they probably already have a "Dummies" book for it on their shelf). They consider their own productivity when deciding what to buy.