The Five Percent Problem

I recently heard for the first time the “five percent problem” that some companies face. The example I heard was of Evernote.

Apparently most Evernote users only regularly use five percent of the features that are available to them — the remaining 95 percent are used only once in a long while.

This wouldn’t be a problem if features were part of the core product and are easy to maintain. It also wouldn’t be a problem at all if not for the fact that for users, the five percent isn’t always the same group of features. Evernote could just cut off the obvious 95 percent and rebuild the company around its core features that its users want.

Quite a fascinating problem, isn’t it?

How did these companies get themselves into such a quagmire?

The simplest explanation is lack of focus. Lack of focus on what’s really important for users. People who currently buy consumer 3D printers do not choose to buy one because it has wireless connectivity or looks nice on their tabletop. It’s not even user-friendliness or low maintenance!

Yes, 3D printer customers expect your product to be easy to use and maintain, along with other expectations that a company must meet with their product or risk having no customers at all. These are core features that if not provided, customers won’t even consider your product.

But a company must provide a little special something with every product that will differentiate their product from others in the market. This is the key selling point. Most products have one or at most two that make them pop out in the crowd.

Linksys had an always-on feature in their wireless routers at a time when users still had the habit of “dialing” to the internet. That was all the difference needed to establish their router as the king in the market. Since the feature was so new, customers hadn’t realised that they wanted an always-on feature, but when they had it, nobody looked back. For a period of time, that was Linksys’ key selling point.

Now it’s a feature subsumed under expectations. Wireless routers that can’t stay on perpetually will not sell anymore, because customers have adjusted their expectations.

Two lessons are important here:
1. You need to know what is your product’s Key Selling Point(s), and test that hypothesis with customers before mass production (if hardware)
2. Stay cognisant of (shifts in) customers’ expectations

So if Evernote stayed focused on their core features (that users expect), like notes-syncing, URL sharing, quick in-built image editing, vertical and horizontal organisation of notes and notebooks, and web access, they wouldn’t be in the quicksand that they’re in now.

But what about their key selling point? For me at least, Evernote’s key selling point is its cross-platform accessibility (mainly between my laptop and smartphone). As long as they continue syncing support between these two platforms, it’s highly unlikely that I’d make a switch. Especially true when I think about the work I’ll need to put in to migrate my existing thousands of notes elsewhere. I’m not even sure that’s possible!

Dropbox vs Evernote

Dropbox has a different model. Their engineers work on many features but only release the ones that matter to their core value proposition, which is to make files available seamlessly on any device.

Dropbox for Business is their enterprise version, but the core feature is the same: instant sync across all machines.

The point is, as a consumer, Dropbox’s product offering appears a lot more coherent. And that imbues in me some hard to describe confidence in the company to endure. “They won’t go out of business… unless a really disruptive technology comes along to oust them, no company is going to unseat them in this business”, is how I think about it.

Evernote on the other hand had this product and that, like Evernote Food and Clearly, that just didn’t add to their core offering. I admit, it’s much easier to say this in retrospect, having witnessed Evernote’s slow and continuing demise.

As a founder or CEO, it’s your job to prevent this from happening. That means keeping a strict hand in features that make it to the customer. Engineers hack, and that’s ok. Let them hack.

But the default answer to whether “cool features” should be released to customers should be “no”, at least 95 percent of the time.


I also write and share posts on my blog, nickang.com

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