Simple vs Simplistic

This is part of our Software Economy Series.

Remember the days of the VHS video recorder? How difficult it was to set a recording time for your favourite program?

Two technologies (Digital Video Broadcasting and hard disk technology) made it possible to enjoy products like Tivo. Technology however is not always the reason things can get easier: Compare the latest Creative Nomad MP3 players and the earliest iPods. Even if Apple picked up the micro hard disk technology from Toshiba earlier than others, it was the clever design and user interface that made a lot of the difference.

Consumer internet products are getting better and easier to use. Mobile apps that check for train routes and times are the best examples because most of them are still much more difficult to use (UK National Rail iOS app) while the new generation of them use the same technologies (mobile, SaaS and touch) to deliver a much better user experience (Citymapper).

Most of this has been achieved by simplicity through minimalism: stripping away clutter and non-core features. What is left is a simple, minimalist and easy to use user experience. User interfaces that are optimised for 80% of the use cases.

On the other hand in the enterprise world the user experience movement has been making inroads for a while. The new generation who has grown up using Facebook and Twitter’s simple design cannot understand why enterprise software should be so difficult to use.

This generation of users have champion companies like Huddle against Microsoft SharePoint and Box against EMC storage systems.

Many developers who have seen the opportunity in the enterprise internet world come from the consumer internet space, bringing their product design skills with them.

This is where problem starts.

In the consumer word, simple is minimal, reduced of clutter and focusing on core features. “Do less, do it better” is the mantra. I am typing this post on iA Writer, a prime example of this trend.

However a literal translation of this into the enterprise products doesn’t produce simple products. It produces simplistic products.

A new generation CRM app starts with a correct assumption, a vision that sees enterprise CRM software as complex. It sets out to change that by brining simplicity to this system: instead of spending days integrating your new CRM tool into the rest of your systems, importing current customer records and training staff on how to use the system, just drop a Javascript on your website and you’re done.

The concept is intoxicatingly simple and it works for many customers when they start. But then it runs into problems: new workflows and requirements from customers who are growing starts to push the company to make a choice: focus on smaller customers and simpler workflows and keep the product simple or to add new features to the product making it more complex as it matures.

Many enterprise internet companies come to making this choice sometime during their life. Companies either end up with simplistic solutions to complex problems and companies that grow to produce solutions as complex as the ones they set out to disrupt.

I think this is caused by a combination of different factors:

Team

Many of these products are started by teams that don’t have any experience of actually working for a large company with complex requirements that is their dream customer. A CRM company driven by devs who have never worked in the sales team of a large enterprise is a typical example.

This is a curse and blessing at the same time.

In short term the fresh eyes they bring to the play is extremely valuable. They see things in the light of the latest product design trends of the market. They bring experience from the consumer internet space. And when it comes to the business the navety of being able to solve the complex enterprise problems works great in breaking into new markets and disrupting them. This is arguably the most potent value of startups and works very well in the short term.

But in the long term it can also be their undoing. The natural resistance towards adding features their customers want - achieving simplicity purely through minimalism - and seeing them as clutter means they usually confuse lack of features with simplicity.

MVPs and The Lean Movement

Another reason for this is the Lean Movement. As great as it is for many use cases, the Minimum Viable Product and the Lean Movement can entrench this confusion between power and simplicity in favour of a simplistic product that is good as a prototype but fails to grow deeper into the enterprise after that, resulting in large churn that is visible only after a while.

Money

The third reason is the capital markets backing those startups. VCs mostly backing consumer internet companies who are seeing a bubble in that market with expensive deals and silly valuations move to the enterprise market with little knowledge of the space and applying the same economic mathematics of the consumer internet to the enterprise SaaS companies: build a simple product, forget unit economics by subsiding the customers with VC money, grow very fast and very wide, raise a ton of money not as a business requirement but as a stake in the ground that works like a benchmark for a high valuation when it comes to a quick exit, usually to a market incumbent that kills the product and keeps the team.

We have all seen many of those businesses where we loved the simplicity of the product, the fresh approach they took just to witness their product being destroyed by the acquirer: think Sparrow, Lala, Delicious and pretty much anything Yahoo! touched until recently.

A good business for a few, a bad one for many

On average building an enterprise business takes longer than a consumer oriented one. The winners of this game are the founders and the early investors who usually are bought out by the funders of the next rounds.

The losers of the game are two groups: the customers who usually get screwed by the new owner of the company and the other enterprise SaaS vendors who want to build a sustainable business that is fuelled by customer generated revenue and a great product. Those businesses have to ensure their customers that their more expensive - no subsidised - product is better for them in the long run because they are not going to sell out to a big incumbent just because they have taken so much debt.

Apply the rules accordingly

I think the best way to avoid building simplistic products is to understand that simple doesn’t mean rudimentary. Simple does not mean simplistic. Minimal does not mean featureless.

Instead of blindly applying the consumer internet product design rules to enterprise software, we can be more clever about building products that are flexible and powerful but are still simple through conventions, user education, strong product culture, clever use of user interface elements and most importantly widening our arsenal of tools to solve complex problems.

I am going to write more about the last point later!

Khash Sajadi

Khash is the founder and CEO of Cloud 66, a full stack container management as a service. Follow him on @khash

London, San Francisco
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