Amid the normal political, entertainment, and sports buzz in my Twitter feed (and good golly last week there was a lot) was a podcast between Bill Gurley and Patrick O'Shaughnessy. In the episode, Bill explained why a start-up should consider a direct listing instead of an initial public offering.
Bill may have been right about the data (very likely) and right about the conclusions (I'm not sure) but he was dead on about the meta issue even it rarely came up.
The big problem is that direct listings need better framing.
With an advocate as prevalent as Gurley, the idea will surely rise in prominence and the meta-idea of framing needs similar attention.
Framing is central to every decision and important because people like easy things.
Here we'll use use easy to describe things with a small cognitive load. When we use heuristics like availability, recency, consistency, and so on--that's making decisions the easy way. To set the stage for framing let's look at the ease of music.
Shawn Fanning released Napster in 1999 and the service offered a way for peers to share music files with other peers. It was illegal, but it was so so easy.
This was a time when high-speed networks were being installed on college campuses, when compact discs cost eighteen-dollars, and when they were wrapped in hard to unravel cases. It was such a process (read: not easy) I bought extra jewel cases to replace the ones I shattered while trying to extract a CD, a delicate process filled with the fear of impairing the audio quality.
Nothing was easy in time, in money, or in the job I wanted done—to hear the music I liked.
Enter Napster. It took less time through better search, cost less money because it was free (and illegal), and allowed for playlists of just the music someone wanted to hear.
Soon after in October 2001, the iPod arrived. Now listeners could have all those other features plus portability. The music industry was screwed. CD sales peaked in 2000 and began their descent.
Move forward a decade to July 2011 and Spotify arrives in the United States. Today all streaming music accounts for about eight billion dollars fo revenue, about the 2006 CD-level in the chart.
There's no single explanation for the chart but part-of-the-reason is ease.
Streaming made search, access, and portability of music all better and easier at ten dollars a month. Ease is a conglomerate of factors and it's the central force to framing.
To end today here's a trigger. Whenever someone uses an adjective to compare things ask, compared to what?
It's hot? Compared to what?
It's better? Compared to what?
It's easier? Compared to what?
What's the comparison? The framing.