Keeping users’ thoughts about leaving your SaaS at bay.

That, and giving them another user to invite their friends. We’ve concluded these are some major benefits of facilitating the lock-in effect.

But in today’s piece I want to put that in contrast with another idea. The idea of “the first mover’s advantage”.

One could be quick to pull up the “Facebook vs MySpace” card or some other example, when attacking the first mover’s concept. My discussion is around plugs.

Apparently there are 15 types of socket plugs. And the reason why we can’t “all agree” upon a specific type of plug is the reason why you might want users to stick with your SaaS product: the lock-in effect.

Here’s an excerpt from this Gizmodo article that explains the whole situation about plugs. Upon asking themselves whether the future is any brighter in this regard, the author answers:

“No. I talked to Gabriela Ehrlich, head of communications for the International Electrotechnical Commission, which is still doing its thing over in Switzerland, and the outlook isn’t great. ‘There are standards, and there is a plug that has been designed. The problem is, really, everyone’s invested in their own system. It’s difficult to get away from that.'”

About being first

It seems to me that being first is indeed worth it if we’re looking at the world in any but the 21st century. Today, when tech companies are born every single day in a huge number, I personally believe the first mover advantage is something that might not be happening at all, ever.

Yes, Xerox had their advantage. Or eBay. We can even debunk my statement and find a company from the 21st century like Pandora that had the first mover’s advantage.

But my point is that in today’s world it doesn’t exist anymore. We’re locked into things like:

• using 15 different types of plugs
• imperial and metric system
• different ways of measuring weight
• day-month-year or month-day-year
• etc.

Those are older concepts. When UK socket plugs became so chunky because of a shortage of copper, no one was able to come 3 months after and say “UK plugs but thinner” and thus claim all their competitor’s business. Competitor is not the right word here since it was a conventional system but you see where I’m going.

However, in 2019 you’ll be swallowed in 3 months indeed if you’re not able to lock people in — but in a different fashion than how we’re locked into metric/imperial et al.

The bottom line

The more time has passed between your product and the next innovator, the harder it is for people to leave.

That’s why the legend goes around that Google or other tech giants are acquiring companies just to dispose of them — they’re increasing the time between their innovation and the next disruptor. “The next disruptor” can mean exactly themselves, which is what they’re trying to do.

My point?

If you’re playing the long game by making it easy for users to join (say you’ve got the freemium tier) but there’s not much difference in terms of innovation between you and the competitor, then the lock-in effect can only help you so much.

More innovation might be the answer that’s evident out of my written piece. But it could as well be “more service”.

About Ch Daniel

I run Chagency_, an experiences design agency — we help SaaS CEOs reduce user churn. I write daily on this topic and in similar areas. Here are my best pieces.

If I’ve helped you, follow me here and reach out: LinkedIn | Twitter | Email | Quora | YouTube 

I’ve also founded an app (among others) that has got 6 digits in # of users — chdaniel.com/app

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