Are you stuck in the ‘belly’? Featured

8:00pm EDT August 26, 2010

The cover of technology columnist Kevin Maney’s book, “Trade-Off: Why Some Things Catch On, and Others Don’t” is the classic picture worth a thousand words. The cover shows a scale with a lemon on one side and an apple on the other. The scale is tipped in favor of the lemon. Maney’s argument is a simple one: Products and services can either be high-fidelity or high-convenience to be successful. The scale must definitely rest on one side or the other. If it doesn’t, your chances at finding success in the business world become pretty slim. In this interview, Maney reveals why companies that attempt to provide fidelity and convenience in the same experience see their offerings fall into the depths of a “fidelity belly.”

The fidelity belly claims its share of victims. Where are companies going wrong?

It varies depending on whether we’re talking about an old business or a new business. Now, I witnessed the fall into the fidelity belly firsthand by working at a newspaper. A newspaper used to be, going back a decade or two, the convenient form of news. It was what landed on your doorstep every morning with a whole package of news.

Pre-Internet, there was no more convenient way to get a wide variety of news. As technology came along, it made other ways to get news more convenient: getting it on a computer screen, getting it on a cell phone screen.

Newspapers eventually fell into this place where they were no longer the convenient form of news for a whole new generation, nor were they particularly a high-fidelity, good form of news that made people desire it enough to seek it out.

When you’re talking about a start-up creating a brand-new product, what seems to happen more often than not is that they try to be too much. They come in and believe, “We’re going to make most convenient product that is also the best thing you’ll ever see.” What ends up happening is that you try to make the compromise between those two things and you wind up being not enough of either. You wind up being in this place that I describe in the book that I call the fidelity belly.

You point out that Starbucks’ CEO Howard Schultz reached a point where he made the fateful decision to aggressively expand the brand. This led to saturation, but what advantage would come from resisting the temptation to grow?

Starbucks is actually a cautionary tale because it had this very high-fidelity brand and product that, by driving it to such ubiquity, it basically tarnished the brand. By opening so many stores so fast, it had baristas who were not trained properly. It had tried to put in automated coffee machines that made coffee that wasn’t as good. The customers noticed and they started to turn away.

If you’re a high-fidelity company, that means, essentially speaking, you’re a low-volume, high-margin company. The pressure on you as a manager is always going to be to grow, to grow volume, keep the margins high. Of course you want to do that — that’s part of what you do when you’re running a company — but the wise CEOs out there cherish that brand, that image, that fidelity and make sure that whatever growth happens happens while maintaining that fidelity and not overdoing it. There’s a delicate balance at work.