The Interface Layer: Where Design Commoditizes Tech
A new cohort of design-driven companies are adding a layer of convenience between us and the underlying services and utilities that improve our lives. This could change everything.
Fast forward; It’s the year 2020 (or sooner!)…
I woke up this morning and grabbed the nearest screen. I selected my transportation for the day, refills of groceries I am running low on, what sandwich I want for lunch, a time window for my apartment to be cleaned, a dry-cleaning pick-up, and a reservation for dinner. I also selected a gift for my sister’s birthday, from a suggested list curated for me. After a productive 5 minutes, I got up and had breakfast.
You may assume I used Uber, and then Fresh Direct or Amazon Fresh, and then Seamless, and other speciality apps and services striving to iron out the logistics from my life. Maybe I did, but I’m not sure. Why? Because I took all these actions through a beautiful (or invisible?) and customized interface that aggregates such services and blends them all together into a more integrated and frictionless experience.
Behind the scenes, there were APIs at play, along with a host of partnerships and affiliate programs brokered between the logistics and utility companies that provide such services and a new breed of companies that operate in the “Interface Layer.” The underlying logistics companies, once consumer-facing, now aggressively compete and optimize their offerings (and prices) for inclusion in the interfaces we use to manage our lives.
The customer experience of these service companies, once represented by dozens of apps — each with their own interface — has been replaced by the single layer we now use to access them.
Behold the power of the “Interface Layer,” it’s not just about great design, it is about the integration of the actions that make life easier and the commoditization of the services underneath. It is more than a layer, it is a shift in the economy that is led by designers rather than cable executives, tech titans, and logistics masterminds. It is a “closed” user experience built on top of a wide open and hotly competitive ecosystem of services.
The era ahead is all about simplification and aggregation. Atomization went too far, and now the pendulum is swinging back in the direction of one-stop solutions for integrated services. The “modern web services” we’ve come to love and use in a piecemeal fashion will be stitched together and represented through superior user experiences.
It is great for users, but it threatens to commoditize the logistics and content providers underneath.
Whether you’re an entrepreneur, investor, or the leader of a product and services company, if you don’t play in the interface layer then you’ll be squeezed out of the consciousness of your customers.
It’s Been A Long Time Coming
There are many companies that predominantly play in the interface layer (meaning that the logistics and content behind the services they offer are provided by other businesses). The first generation of companies that we are already quite familiar with add a layer over a particular vertical, like content, food, or taxi/limousine service.
In the world of content, you have products like Flipboard and Circa that either present, summarize, or editorialize the content generated by the mainstream news organizations. They compete with interface.
In the culinary world, restaurants (despite having their own computers and delivery staff) are relying on companies like Seamless for orders and OpenTable for reservations. Neither of these businesses make food or own restaurants, but they control a significant amount of the volume of orders and discovery by owning and optimizing the interface.
And, of course, Uber is a great example of an Interface Layer company that is completely disrupting the traditional car dispatch industry by adding a better user experience on top.
But it’s the second generation of the Interface Layer that I find more interesting.
We just got a peek of it when Google Maps — an Interface Layer for navigating the world — incorporated Uber. Now, as you navigate your way around and search for places you want to visit, Uber’s service is incorporated as an option within the experience. At first glance, this is fantastic (and makes Google’s recent investment in Uber even more brilliant). No doubt, more services that work best in a map-like “Interface Layer” will integrate into Google Maps. But, over time, will further integration of services into the maps interface further commoditize the services? If you’re able to order a ride from within the Maps experience, will you care less who the provider is? Will our loyalty to specific services be compromised by the aggregated Interface Layers we use to access them?
Companies that successfully aggregate multiple services in a single interface have a chance of really shaking up industries. As soon as you rely on one interface for a suite of needs, you become loyal to the interface rather than the individual services it provides. Google Maps is a perfect example. Another company I heard about is aggregating the rental listings from AirBnB, HomeAway, and others in a more seamless experience that provides price comparison and booking vacations using properties from all services. If this interface breeds loyalty, then the user-experience of the companies underneath becomes less important (and eventually commoditized).
Choices are made in the front-end experience of everything.
Already, we live and work at the mercy of the interface. We love simple, contextual choices. Finally, the worlds of design and technology have intersected in such a way that can aggregate and integrate the many once-disparate choices of our lives. The second generation of the “Interface Layer” prompts a lot of questions!
Who Wins in the Age of Aggregated Interfaces?
Customers will have a better user experience and less friction. Service Providers benefit initially from a broader reach and seamless integration into other products from Interface Layer companies. But they may lose their identity over time, and competition will heat up as more (and new) underlying services compete on price and cut deals with the Interface Layer companies. As for Designers, they are the biggest winners of all. Designers become the most important leaders of this new business era (which is why we see people like John Maeda joining firms like Kleiner Perkins, and funds like the Designer Fund emerging with a focus on designer-founded businesses). The success of companies in the Interface Layer will be designer-driven, and the greatest user experience (speed, design, etc…) will win. [Sidenote: UX/UI is one of the fastest growing fields in Behance right now, here’s some of the top work]
How Will “Interface Layer” Companies Measure Their Success?
Companies in the Interface Layer will be design-heavy. They will rapidly iterate and test user experience and interface design better than ever before. These companies will be obsessed with the design process as their product and will leave almost everything underneath (the logistics, etc) to the actual service providers (the old internet economy).
These companies will be founded explicitly to build a superior interface that integrates an existing set of services. They will measure their performance based on (1) the degree of loyalty their interface commands, (2) whether they have economized the end-to-end consumption of a set of services better than anyone else, and (3) whether they are able to squeeze the underlying service partners on price, availability, and quality.
How will the “Interface Layer” Impact The World Of Venture Investing?
The true “Interface Layer” companies will be low-cost, high margin businesses that compete with design rather than operations. When launched, these companies will need to spread quickly through collaborative features, social sharing, and more. They will need capital to build the right team, attract the right designers, and execute a fast and effective go-to-market strategy. But they won’t need the capital and technology required by traditional marketplaces and logistics businesses.
As I think about who might acquire major players in the Interface Layer, I think it will be companies that can make them better through some form of complementary product of service, like hardware, maps, or an infusion of the right data. I’m thinking companies like Apple (hardware) and Google (hardware, maps, data), as well as companies like Pinterest (data). If you think about it, Pinterest plays in the Interface Layer of commerce and is replacing the discovery experience that typically takes place in e-commerce websites (and retails stores) with a layer of browsing that is increasingly fine-tuned to your interests.
What Does The Interface Layer Teach Us?
The underlying concepts of the “Interface Layer” teach us a lot about what makes modern web services succeed.
(1) The success or failure of a product is less about the technology and more the user’s experience of the technology. Be sure to find, keep, compensate, and celebrate those that are pushing the world of UX/UI forward. In the world of web services, design can no longer be outsourced or relegated to a department. As interfaces become companies, design will increasingly become THE business.
(2) Increasingly, the greatest competitive advantage will be ease (and speed) of use — not just for a particular action/service, but for a sequence of related services working together to make your life better. No doubt, the best businesses kill friction.
(3) The quest to atomize services and user experiences helped usher in an era of simple design and logical defaults. These same principles will now be used to aggregate and integrate services into common interfaces. The screens in our hands, on our wrists, and in our homes will become a conduit to daily living in a more integrated fashion than we might expect. Turns out the future is NOT a thousand separate dedicated apps after all!
Upon reviewing an earlier draft of this article, John Maeda informed me that the Interface Layer resembles an earlier concept in the image processing field called “multi sensor fusion,” “which is about pulling together the entire picture from disparate data sources.” Of course, you need data sources to be reliable before integrating them. Services must be mature — and stand the test of time — before they can be integrated. Perhaps atomization of services/apps is a prerequisite for aggregation?
The concept of the “Interface Layer” is not a new idea. The integration of services has always been a goal for many industries. But the capacity of UX/UI has, in some ways, caught up with the tech underneath. Many leaders of the “tech industry” are now distinguished more by their design than their technology. Just as there is a layer of tech over everyday life, there is now a layer of design over everyday tech.
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[Special thanks to a few friends that reviewed early drafts and provided feedback: Ben Blumenfeld, Craig Shapiro, John Maeda, Micah Rosenbloom, Semil Shah)]
[Disclosure: Writer is an investor in Pinterest, ManagedByQ, and Uber]