Products are becoming interconnected: External complexity

- [Instructor] In a previous video, we looked at some examples of increasing internal product complexity. In addition, products are also becoming more interconnected, which is an increase in external complexity. The clearest and most ubiquitous evidence of this is the internet and internet-connected devices. And when we think of internet-connected devices, we typically think of communication products intended to enable users to transmit information through the internet. But beyond dedicated communication devices, like computers, and phones, internet connectivity is becoming standard in other types of products. We now see kitchen appliances, cars, home security systems, music players, they're constantly connected to the internet. This is often referred to as the Internet of Things or IoT. Let's look at a simple example, a pencil. On the left is a pencil. This product is not transmitting or receiving digital information. It has no internal or external power source beyond the user. And this product is assembled, typically from about four parts. On the right, is a modern stylist. This product has the same form and same function as the pencil, but it's transmitting and receiving information. It's powered by a battery, and to support this connectivity, it has many more parts. We can consider the external complexity of these products by assessing their interconnectivity. To operate, the pencil needs only two other products, a pencil sharpener and paper. And there's no other dependent relationships with other products. The stylist, on the other hand, has many more dependent relationships. First, it relies on a specific type of Tablet or computer to record its mark-making. Because it's an electrical device, it also relies on the broader power grid and a Charging adapter to charge it's batteries. These relationships are more complex than that though, from the perspective of the stylist. The stylist is actually connected to and dependent on, different subsystems within the Tablet. For example, the Tablet display has to show the user the marks being made. The Bluetooth radio, within the Tablet, communicate status information between the Tablet and the stylist. And the Tablet touch sensor registers whether the stylist is in contact with the Tablet. Each of these systems has many parts within it. Further, the Tablet itself relies on the power grid via a Charging adapter. So if any of these components are removed, the stylist will cease to function. As we continue to trace dependencies, there's at least one more layer to support the stylist operation. The stylist itself is running software or firmware to control it's operation and likely requires regular updates. The Tablet is sharing data created by the stylist through interactions on the web. And the Tablet is likely running a stylist-specific application. Which in turn, requires support from an app market ecosystem. To operate, the stylist relies on these interconnections, and the stylist product designer has to have some understanding of this broader system to effectively design the product. This link between pervasive wireless internet access, and product interconnectivity is likely unsurprising, but it's not the only trend increasing interconnectivity among products. The growth of the experience economy is a trend towards thinking of the user experience as the product. An experience, which can be provided by a variety of physically disjoint user touchpoints. This can be seen clearly in businesses relying on peer-to-peer networks in which critical components of the product, the user experience, is delivered by other users of the product. If we look at this trend in a simple diagram, traditional businesses engage with customers, in a simple, bilateral relationship. The business provides a product experience, and the customer provides payment, think a hotel. In the peer-to-peer business, the product is still the experience, but a critical part of that experience is delivered by other customers. This model has huge benefits to the company. It's easier to scale, low cost of goods sold, but it requires tight dependent interconnectivity between the parts of the experience delivered by the company, and the parts of the experience delivered by other customers. Growing out of computing and communication technologies, the information economy, is built around the monetization and exchange of data, gobs of data. Like the experience economy trend, this is changing the fundamental relationship between company and user. Increasingly, companies are providing information services, think, voice-activated search, effectively for free because they can monetize the information they gather from the interactions. Traditionally, the user payment for the product would need to fully compensate the company for the development and manufacturer of the product. In a company engaged in the information economy, information gathered from the user through their interactions can be sold or leveraged as an alternative revenue stream for the product. This provides some benefits to both the company and the user. The user pays less. The payment no longer has to fully compensate the company, the cost goes way down. There are, of course, privacy trade-offs. From the perspective of product development though, the real shift is the degree to which the viability of these products relies far more on the interconnectivity to support this information capture and exchange. We can see all of these effects in the smartphones we carry around. First, internet connectivity is the fundamental technology that makes the smartphone possible. Second, the value, the true product sold is the experience of using the phone. An experience that can't be supported solely by the hardware, or even the combination of hardware and software. The smartphone experience only reaches its full value with a community of users. Third, many of the services we rely on for the smartphone experience are compensated through the information economy. Few users actually pay directly for mapping, email search, et cetera. Increasing interconnectivity among products is changing the products in experiences available to users in dramatic ways. Most obviously, in handheld electronics, peer-to-peer experiences, information reliance services. This is a dramatic shift from a product development perspective as well. The external complexity of these systems, new products are inserted into is increasing. Designing amazing products in this landscape, requires effective tools, to assess, communicate, and model these external systems, the new products must engage with.