It is that time of year again. Tax season. The dreaded April 15th deadline is becoming less intimidating as online tax filing has taken much of the pain out of the process.
Fox news reports that 53% of Americans will be filing electronically in 2009.Although
TurboTax is an incredibly tool, it has a high degree of complexity. The interview process can be daunting. The fault is not that of TurboTax but due to the incredibly complex income tax code of the US government. TurboTax provides guidance for all the income and deductions rules to provide filers with their maximum deductions in order to minimize tax liabilities and maximum tax refunds.
The high level of online tax filing is an indicator of the high web-IQ of the average American. In the early Internet days, the mantra was to "kiss" - "keep it simple stupid." AOL provided a lobotomized version of the web and was very successful due to its "simplicity". It is interesting to see how Facebook and Yelp have succeeded in adding features, without losing their client base despite also introducing increased complexity. It is true that every time Facebook revamps its UI, the community complains. People hate change after all. Yet after a few weeks of grumbling, the complaints begin to fade, and Facebook continues to grow at an impressive rate.
The challenge for today's Internet businesses is to discover an early customer group where the value-proposition greatly outweighs the complexity or "who-cares" factor of the offering. Once this group begins to derive value from the service, they in turn develop loyalty. These loyal customers begin to evangelize the service and bring other like-minded customers to the service. As the customer base begins to grow, and the customers becomes more proficient in navigating through the various features of the site, a richer set of features are needed to continue to improve the customer experience. The service can then mature along with its growing customer base.
With the increasing complexity of the service, some of the customer base may eventually withdraw seeking a simplier experience. A good example of this phenomenon is the Yahoo! versus Google comparison. As Yahoo! wrestled the top destination site from AOL, they rapidly added features to the site. Search, Finance, Sports, Games, News, Maps, Mail and other services were made available on its increasingly dense home page. Google took a contrarian view by focusing on search and providing the provocatively sparse home page. The rise of Twitter, with its simple interface and structured messaging, versus the feature-ladden Facebook has many similarities to the Yahoo! vs Google battle.
Whether the service is TurboTax, Twitter, Facebook, Google or Yahoo!, these services work because the value proposition far exceeds the apathy of the target customer and the complexity required to receive the benefits of these services. For more complex services like Facebook and Yahoo!, these sites often begin as far simplier services, and rapidly grow their service offerings as their customer base expands. TurboTax was able to win a strong customer base due to the unique painful and deadline driven experience that is tax filing. Therefore, customers are willing to cope with a highly complex software service such as TurboTax as the alternative method of filing is excruciatingly painful.
A web company needs to develop a product that has enough complexity to solve a real problem, while packaging this service in an accessible manner in order that customers can realize the benefits of the service without getting overly frustrated. A good rule of thumb is to identify an early adopter base that has a huge pain issue that the service can solve, or to find a passionate base that can fall in love with the service due to its elegance. This early adopter base must be strong enough to break the inertia that each web service faces. There are thousands of Internet companies looking to gain mind or wallet-share. The increasingly sophisticated web customer has many services to choose from. A mistake to avoid is to assume that customers are not sophisticated enough to handle a complex web site. At the same time, another common mistake is to underestimate the challenge in overcoming a target customer's apathy and short attention span. Therefore, web companies need to combine robust services and solutions with an intuitive user interface in order to thrive.
The gauntlet has been thrown. Manu and Peter are our beloved National University of Singapore interns. The prestigious university has an entrepreneurial program and exchange with Stanford University. GetQuik has been an active sponsor and advocate of the NUS NOC program.
