Today on the Edge of Innovation, we discuss cognitive overload and recent changes in crowdfunding.
“Reducing Cognitive Overload For A Better User Experience”
“$5 Million Raised Since Change in Equity Crowdfunding Rules”
“How to Harness Joseph Schumpeter’s Forgotten Path to Innovation: Organization”
Jacob: Welcome to the Edge of Innovation, it’s great to talk with you, Paul. Today we’re going to be going over your tweets.
First, “Reducing cognitive overload for a better user experience.”
Paul: Yeah. This, I think, you know, is sort of… I mean, it’s number six. I think it’s the sleeper, because this is what we’re all about as producers of content for the web.
Jacob: Sleeper, you mean, this is going to be a bit of a dull topic for most people?
Paul: No. I think it’s the one that is…should be more attention paid to. If people knew what they were reading, and it was…this is really important. This is something that you should really think about.
Jacob: Yeah. I mean, I read the title, and I immediately think of all the work we do at SaviorLabs. And there’s an incredible amount of things that this sort of topic affects.
Paul: Absolutely. And this is sort of the marrow of the discussion. This is really what it’s all about, is that user experience, when we talk about it, is frictionless, and it just works. And that’s why Apple devices are so cool, is they just work.
They’ve got cognitive overload very low, you know. There’s a great book, “Don’t Make me Think”. And those things, while, you might say, “Well, I’m intelligent. I can think. I can do all that.” Well, they create cognitive load. And so while the title says “Cognitive overload,” it’s really we want to reduce cognitive load in everything we do.
Jacob: I saw a guy doing a bit of a sketch recently about the difference between America and, English, or the United Kingdom food experience. And he was just making the funny comment that like, yeah, when you open a menu in America, it’s gigantic. But we celebrate choices. And we have all these choices. And in some ways, with the user experience on a website, you’re actually trying to do the opposite. You’re trying to reduce the amount of choices that you have.
Paul: Well, that’s great. As we talked about Microsoft earlier, they give you lots of choices. Apple says no. We’re going to reduce the cognitive load. You just do it this way. But we’ve got 30 years of Microsoft giving us these options. If we had never been taught that, we would have said, “Well, that’s the way you do it.”
So, you know, cognitive load is probably one of the most important things, because, you know, cognitive load isn’t bad, but we have to be selective about it, you know. So if it’s really complicated to, cook a meal, you’re not going to be engaging with your children or your wife or your spouse or significant other. You’re going to be concentrating on this, you know, and there’s a high cognitive load there. So, you know, if you’re a brain surgeon, and you’re in the middle of surgery, you’re not going to be talking about how the game was, because there’s a high cognitive load.
Those are important things. But, you know, it’s like well, I’m going to choose the simpler way to do things so I can engage with other people around me. So as we reduce cognitive load, we let people do what they want to do.
Jacob: Yeah. So, what are the… Are they any sort of particular recommendations from the article that stuck out to you, because…
Paul: Well, I think most of it is just disclosing the concept of cognitive load and really to be aware of it, you know, because, there’s another tweet. I don’t think it made it into the top 10, but minimal websites. And there’s this… There’s this tension that occurs with website design where you can get too simple, you know, and not give people enough information — not just design. But design and content. So you could just say, you know, we make websites. Okay. Well, that’s not enough information for somebody to choose you as a, as a services firm. So that’s not…
We were talking about with the ads around, things, the cognitive load on that is horrible. I mean, it’s just like… It’s overload.
Jacob: Well, and in some ways, the cognitive load is understanding your target audience. Because if your target audience, for example, if you’re a restaurant and you have a website, and it’s diffi— your target audience are clientele to come to your website. Right? I mean, that’s the people that you want to come to your website. And if the cognitive load is so difficult for them to find out just the simple address and operating hours of the restaurant, you’re going to lose business. So that’s why this is really important, because if it…
Like, there’s a cafe in my city. I love it. I love going there. Occasionally I have to remember, you know, what are the hours to go. And for whatever reason, the way they have their website designed, it’s not the first things at the top. It doesn’t say, “This cafe. These hours.” I have to scroll all the way to the bottom, and then it’s in a dark font on top of a brown background.
So, it’s like… It’s a slick website, guys, but you missed it on this one. The cognitive overload is almost enough to make me say, “Ah, just Dunkin’ Donuts.”
Paul: Right. I agree. I just had a similar experience with a restaurant I was invited to. I didn’t know anything about it. I wanted the address. It took me like four minutes to find the address on the website. I mean, what’s with that?
Jacob: If you are a restaurant that wants people to come to you, the most basic information that they need — where are you.
Paul: Yes. Where are you? And when are you there? More than anything.
Now the danger with this is that you might… You could implement them all and then your site becomes very heavy. So you need to be very selective about what you want to use and how you do that. But I thought it was a great article, because it sort of very, very quickly summarized, in a couple of sentences, why you should look at these. And, you know, it covers React, for example.
Jacob: Oh. That’s great.
Paul: You know, but it also comes and covers AngularJS, which is another, another way to do things. And so all of these different things that you might have heard of but don’t really know the depth on, this is a great jumping off point.
Jacob: Oh, that’s excellent. So next article that was up was “50 million raised since change in equity crowdfunding rules.” So this was on Entrepreneur, and—
Paul: 5 million.
Jacob: Oh. What did I say?
Jacob: Oh. Well, that would have been great too.
Paul: Yeah. That would have been great, but…
Jacob: 10% of 50 million. 5 million raised. So what’s the… What’s going on with this article, and what’s the payoff that you felt like that people needed to hear?
Paul: There’s a fundamental shift going on in the way that entrepreneurs can get money for their company. You could have always had people give you money, or, you know, loan you money — friends and family. That kind of thing. And there, there weren’t a lot of rules in that. But it actually, it was illegal for you to advertise for… Like, say, you, you know, 10 years ago, 15, 20 years ago, you took a want ad out in the newspaper. Those are those things that are printed on paper and—
Jacob: Yeah. Yeah. I’ve heard of those.
Paul: They fold them up and they throw them at your house. Or you go and pick them up at the corner. You took an ad out that says, “I’m starting a new company, and it does X, Y, and Z, and we want you to invest.” That was actually illegal.
Paul: Yeah. You could not do that. That’s from the SEC’s—
Jacob: I didn’t know that.
Paul: Yeah. You’d get into trouble, you know. They’d come and say, “Yeah, you can’t do that.” And the reason is, is because your… Well, you know, I don’t know what the long-term historical reason is, whether it’s a way to protect Wall Street. You know, it might be.
But I think it’s the, the investing. You know, there’s this thing called an accredited investor, which you have to be in order to invest in certain things. That means that you have to have a certain level of liquid net worth. And it protects you.
Now, it’s interesting. You know, so I just said it. 20, 30 years ago. Actually, the rules that prevent that may not have been in place then, but I’m pretty sure the SEC would have had problems… But there are rules now, and have been — and I’m sure we could get a lawyer on that could talk about all this — that prevented you from advertising and saying, “Hey, I want to raise money for my, my company.”
And because of those claims that you say, you know, “We’re going to make a billion dollars,” or we’re going to do this, or we’re going to do this. Those, you go and you walk down the street, and you see a grandma who likes you. You don’t know them at all, but they say, “Oh, it seems like a nice person, and what they’re doing and all that.” That border is a borderline problem, because you are, you are taking somebody who’s not an accredited investor, maybe taking money that they don’t have that’s liquid that is riskable, and going to be taking it and giving it to you in speculation. So they’re not a professional investor.
And so that, that’s not a good thing, you know. So now, with the internet, you know, we’ve come up with Kickstarter and Indiegogo and all the other ones where you can sort of have these micro investments. You can invest $200 or $100 and all these things. And surprisingly, the SEC has been okay with that.
Paul: And, that’s sort of the initial crowdfunding, those rules. The SEC came out with a, an announcement to say it’s okay to do that. And so, you know, you can go out and put that crowdfunding rule out there and, do it and raise money for your company that you could have never done legally before. You could only have done through friends and family. So, if you have an idea, that’s really all you need. And now you can put that up on a website, and if the idea, you know, has synergy with people’s minds, they give you the money, you go off and do it.
Now, you are representing that you’re going to do it. And you’re going to do faithfully, and all that different stuff. And you can get into trouble for not doing what you say you’re going to do.
Jacob: Well, I think with, organizations like Kickstarter — I can’t speak for other ones. I know for Kickstarter, if a crowdfunding does not follow through or the timeline gets perpetually delayed… There is a book project I saw happen where, you know, we’re going to produce this set of books in 2014, and it’s still delayed to September 16, 2016. I’ve seen loads of people start pulling out their investment because they haven’t followed through. So there are those protections, at least, built into those things.
Paul: So it’s just this fundamental change. And what’s interesting about this is Wall Street doesn’t have a lot of control over it. You know, I don’t think people generally know… If you want to talk about conspiracy theories, I don’t know that it’s that, but the depth to which the roots of Wall Street’s control is in our economy is huge. And you just don’t understand it. This is a disruptive event.
Jacob: Yeah. Well, this seems not only a disruptive event, which is, I hope, good for Wall Street, but it’s also good for entrepreneurs.
Paul: Absolutely. And I think it’s good for individuals because what you see is “I like that.” That’s the ultimate way to invest, is invest in companies, you know. The investor guidance out there is invest in company that you think do a good job.
Jacob: And it’s been great. I’ve seen several companies, that have started with miniature projects on Kickstarter that have kick-started entire careers so there’s Misc. Co. Goods in Louisville, that he started out with like just a simple card deck, I think it was like three or four years ago, and it launched an entire design career for him, because it had synergy with people. And it was a sort of Kickstarter thing where, you know, “Hey, I need $20,000,” and “Oh, my gosh, I have $150,000 invested in this project.” You know, so…which is exactly what you want as an entrepreneur.
Paul: Right. Well, and it’s interesting, because, there’s a lot of people in the web world who say if you have an idea for a website, don’t build it, build a landing page for it to say, “We have a new idea for this, this, and this. Sign up if you’re interested for free.” You know, “Sign up for more information.” If you don’t get traction on that, you’re probably not going to get traction on the product.
But yet, you’ve spend six months and thousands of dollars if not hundreds of thousands of dollars, trying to build that product, you know. So it’s very wise to do that. And Kickstarter is another way to validate it. It’s a great idea and all the other systems that are out there.
Joseph Schumpeter and Organization
Jacob: Okay. So, for our last article, I threw this one in there because it looked interesting, probably because I’m always interested in biographies of leaders and how they can help us be better businessmen and entrepreneurs for the future or businesswomen for the future. “How to harness Joseph Schumpeter’s forgotten path to innovation organization.” Talk us through that article.
Paul: Yeah. I mean, it’s really simple. It’s organization, you know. Now, he was an economist, passed away in 1950 from the late 1800s. What’s interesting about these old dead people is they dealt with the same problems we’re dealing with. They had different tools. People fundamentally were the same.
Jacob: They lived in black and white.
Paul: They lived in black and white. Yes. And, you know, they didn’t have some of the cognitive overload that we had. So in some ways, they had much clearer visions for what had to happen. And he really summarized… His view was basically organize things so that you can utilize new…I don’t want to say technologies, but new, new ways of doing things. So new version of a product. Introducing new methods of production, open new markets, and acquire new sources of supply.
So it’s not about necessarily external innovation, but from an entrepreneurial point of view, it’s optimization. And we talk about it very naturally now. You know, reducing cognitive overload. Make your site simpler.
Well, that’s, that’s something where we might, you know, go… Well, now we’re going to move to ReactJS. That’s a new method of production. Why? Because it offers us this and this ability. So really, you know, these things are somewhat obvious when you say them. But if you don’t think about them, they’re not obvious. And this was a really good article to help sort of crystallize that in the reader’s mind, is…
One of the things that we see in business and in talking with different — especially nonprofits — they get so caught up in what they’re doing — run, run, run, run — that they forget why they’re doing it. And they’re doing the wrong things now. And I think we need that stepping back and say, “Wait a minimum. Are we doing the right thing? What are we trying to accomplish here?” That is so critical.
And I think that this, focuses people on that, so it was a good read.
Jacob: So, talking through, how do you organize things so that you can step back.
Paul: Absolutely. Yeah.