3 effects of building a digital product

Most organizations want to build a product like Facebook, Snapchat or Apple but few go to great length to invest in drilling hard on user experience design. Perhaps the decision makers are trying hard to understand the impact of building a crappy product. I will share my 2 cents on why you need to know the importance of building a well UX designed product from a business perspective. The reason is simple. You can have in general 3 broad effects on building a digital product. Here’s how.

There are typically 3 effects to building a digital product.

A summary picture of the 3 different effects of building a digital product.

Habit Forming Effect

The first effect happens when everyone used it at the maximum possible frequency and spread the use of the tool. The first effect happens because people love it and develop a habit using it. This effect is known as the habit forming effect. The first effect drives growth and volume for businesses. In Silicon Valley, this is what differentiates $1 billion startups that can potentially disrupt a global corporation, from the other ordinary startups that are surviving.

If you build a product with habit forming value, you should get this.

Baseline Effect

The second effect is formed when everyone used it at the minimum possible effect and sought to look for an alternative. The second effect happens because people hate it but they use it because of the lack of alternative solutions to fulfill their orders. This effect is known as the baseline effect. As long as the big corporations have monopoly over their markets, they can afford to have the baseline effect. There is a possibility that a game changing event can disrupt a market leader in an oligopoly settings. Suppose the incumbent is the market leader of a global vertical industry and produce a digital product with baseline effect. This incumbent will lose its competitive edge when other competitors create a habit forming effect on its newly created digital products to differentiate itself in the short run amidst the emerging disruptors from the startup world. This can be one of the biggest drivers for falling or stagnating revenue of any big corporations in the new modern context of the digital world.

If you build a product with baseline effect, it should look like this.

Deterrence Effect

The third effect happens when no one uses it. The third effect happens because the cost of using it hinders the benefits of using it. This effect is known as the deterrence effect. This happens when companies do not have the external perspectives of how their digital products are being used by the world on the condition that they think that their own IT divisions can solve the problems. As such, companies go to emerging tech-novation firms like Qicstart to mitigate their risks.