User Operations: How do your users make choices?

How people will choose is a very complicated question.

But there are 5 factors worth paying attention to:

1. Cognitive ability (what to want)

Cognitive ability includes an individual's views on the world, life, and values. It is the embodiment of each individual's wisdom, and we rely on this wisdom to make choices in life.

Since time is the most scarce resource for individuals, it is very important for young people whose time is relatively not scarce to enrich their cognitive abilities within a limited time. This is also the reason why we read thousands of books and travel thousands of miles.

People who lack cognitive abilities often find it difficult to judge the value of information to us. They are also more easily guided by public opinion and groups and lose the ability to think independently.

2. Information level (judgment basis)

In addition to budget constraints and cognitive abilities, the choice also depends on the timeliness and completeness of the information obtained.

This is easy to understand: if the information can be known in advance, the effectiveness and arbitrage of the choice will definitely be better. There are many related cases in the securities market.

If the information is one-sided and unidirectional, it is often difficult to judge the essence of things. During the trade friction in 2018, various authoritative articles said that "the United States is shooting itself in the foot and is bound to fail." If this is true, then they should be allowed to shoot themselves in the foot, and there is no need for negotiations.

It can be seen that when the information you receive is only one-sided and there is little room for discussion, wisdom is difficult to generate.

3. Technical ability (can you do it)

Some options require a certain "technical" threshold (broadly speaking):

• To apply for a programmer position, you must have 3 years of JAVA programming experience;
• To apply for the White Horse Club you must be over 180cm tall.

4. Budget Constraints (Can or Can’t)

Every choice requires a cost. The cost here refers to "time, money, energy, opportunity cost, and illegal cost". The budgeting ability of different people varies greatly:

A 38-year-old middle-aged man often has less energy and time to devote to his career than a 25-year-old young person due to physical and family constraints.

• When everyone knows that buying a house can make more money than working, many people cannot make this choice because they have no leverage and no capital accumulation.
• Things that are prohibited by public power (e.g. human trafficking) are very costly, and choosing them means breaking the law.
• The cost for a father of two children to change jobs in another city is much higher than that for a fresh graduate.
• Steve Nash giving up basketball to play football means his income may be reduced by tens of millions of dollars.

5. Public pressure (dare you dare)

Humans are social animals, scattered in different groups (religious, ethnic, family, workplace), and their choices will inevitably be influenced by public opinion.

Whether one can overcome the pressure depends on the tolerance of the entire public space and one's personal cognitive ability.

example:

• Some aunts : Auntie tells you that it is safer to work in a state-owned enterprise, and only by taking the civil service exam can you have social status. How much year-end bonus will your small private enterprise give out this year? It's just a small thing, there is no future and it won't last long.
• Some uncles : Did you give gifts to your leaders during the holidays? I tell you, you young people nowadays just don’t know how to handle things, and your development will be very slow. You still have to give proper gifts…
• Some keyboard warriors : You are so rich but only donated 2 million, how shameless! If you don't share this, you are not Chinese...
• Some bosses : The company has provided you with a stage for growth, and you should repay the kindness. The dregs of the big-pot system such as year-end bonuses should not exist at all, don’t you think?
• A girl wearing Hanfu went out on the street, and some passers-by asked : Why are you wearing kimono! Do you like Japanese people? Don’t you know how many of our compatriots were killed by the Japanese back then? running dog! Traitor!

We always say that we want to be an independent thinker, but in fact it means that we should first determine "what I want" before making a choice.

China is a country with a strong patriarchal mentality. From the family to the education system, children are always "asking" for what their parents and teachers think they need in order to gain certainty for the future.

Children often choose what they want relatively late, or even lose the ability to judge by the time it’s time for them to make their own choices. This is something that deserves reflection in our education system.

Growth is the result of a person's continuous self-development. Independent thinking is a very important prerequisite, and "what you want" is the most important.

Of course, in addition to knowing "what you want", you also need to evaluate "whether you can get it?" This is determined by information level, technical capabilities, and budget constraints.

The reason why we are mediocre is that these factors are no different from those of the general public, and we don’t have more choices on “whether we can have it or not”.

Conversely, if you want to have more choices, you must make breakthroughs in these three aspects.

The pressure of public opinion tests a person's position in a group. If an individual is strongly attached to the group, his or her wisdom will be difficult to demonstrate, and the group's joys and sorrows will guide people to make common choices.

For example:

1. In patriotism , the vast majority of people agree on the common interests of the nation and it is easier to reach a consensus. Any behavior that opposes national unity will be strongly resisted and may even resort to violence.
2. In a religious family , family members follow the will of the head of the family, join the church, and become God's people. In some religious countries, women can only show their eyes in public areas, and the rest of their bodies must be covered with black veils. They do not even have the right to drive.
3. In some authoritarian countries , newspapers and television said that the leader once stood on a hill and pointed at a plane in the sky, and the plane was shot down. After listening to the report over and over again for 3,000 times, I began to believe it.

As the core source of information for individuals, once a group shows a high degree of consistency, that individuality will be difficult to tolerate (religious countries, authoritarian countries).

In a society with abundant freedom in public spaces, people from different groups can live in harmony with each other, forming diverse values, and people will have more choices.

The relationship between individuals and groups is often manifested as the relationship between leaders and the masses. This relationship is itself a result of "repetition". Quoting the discussion of repetition in "The Crowd: A Study of the Popular Mind":

The shorter the assertions of the group leader, the more evidence and proof seem increasingly scanty, and thus the more important his assertions become. Religious books and codes of law throughout the ages have relied on simple assertions.

But assertions have no real value unless they are repeated constantly and, as far as possible, in the same words. I think Napoleon once said that there is only one rhetorical device that is very important, and that is repetition. Through repetition, what is confirmed can eventually become stabilized in the human mind as a proven truth.

When we see this force at work in the most enlightened of men, we can understand the power of repetition. This power arises because, over the long term, repetitive content taps into the deep regions of our unconscious self where the motivations for our behavior are formed.

Therefore, leaders and the masses are nothing more than the result of the mutual needs between rulers and the ruled, and the "repetitive" result of hundreds of thousands of years of violent rule.

Like people's perception of family, it is a concept rooted in the deep areas of our unconscious self, which affects our behavioral motivations.

The profound impact of this "repetition" can be understood from the attitude of our parents' generation towards the cult of personality.

Why do users choose me?

The essence of product development and operations is to influence users and make them choose more services we provide within a limited time.

TO C mobile Internet products generally have very low marginal costs (MC) and belong to economies of scale. Product and operations teams are required to have insight into users’ benefits and costs, that is, what costs do users pay, what value do they gain, and how can we influence their behavior?

Since the subjective will of the target users and budget constraints will jointly determine behavior, it is particularly important to comply with human nature (worship of individuality, lust, laziness, fear and anxiety, desire for consumption...).

It can be seen that, apart from the basic needs, all kinds of anxiety-mongers, consumerism theorists, and starting line theorists all influence the public's choices by shaping the group's concepts, thereby achieving commercial success.

On the other hand, in this era of rapid development and quick success, the relative lack of cognitive ability may lead to users not being able to fully understand "what I want". At this time, the starting point of "choice" can also be affected, which gives TO C products a certain amount of room to play.

TO B products generally have higher marginal costs (MC), and it is easy to achieve economies of scale only when they have technological advantages. Products and operations are required to have insight into the benefits and costs of the industry, that is: what costs do customers pay and what utility/benefits do they get; what costs do suppliers pay and what utility/benefits do they get, and how can we provide products and services at a low cost?

Because manufacturers' rational decisions are mainly determined by service, price and budget constraints. Therefore, on the revenue side, we still need to design products and services based on user value; on the cost side, we need to pay attention to the responsiveness of the supply chain, the cost structure, and use technology to reduce costs.

For example: first digitize the supply chain, then use data to optimize supply chain efficiency; use data to improve marketing efficiency; build an information system to reduce collaboration costs, etc.

The Internet is unlikely to disrupt industries, but it can improve efficiency and help manufacturers gain economies of scale and cost competitive advantages. This requires TO B's products and business operations to go deep into industries with long supply chains such as manufacturing, logistics, medical care, catering supply chain, and education, and understand the operations and competition models of manufacturers in various industries under the entire capital machine.

Note: How to understand economies of scale?

For product manufacturers: π (total profit) = TR (total revenue) - TC (total cost) = TR (total revenue) - TFC (total fixed cost) - TVC (total variable cost), where TR, TFC, and TVC are all functions related to Q (quantity of services).

Figure 1: Maxi-Silberstone Curve

For business models with economies of scale, TC (total cost) does not change much with the rapid expansion of Q, while after scale, TR can offset TFC to generate a large amount of profit.

For example, the TVC does not change much when selling courses to 1 million people and 100,000 people, although the investment in TFC is a little higher, for example, more customer service labor investment, which can generate very substantial profits when amortized on a large scale.

For ofo, for every additional 10,000 vehicles, the operation and maintenance costs will increase accordingly, and the TVC is relatively large.

Therefore, if the utilization rate of vehicle assets is not high, the TR will increase relatively slowly, and it will be impossible to generate considerable profits - especially in the absence of a monopoly market.

source: Eric is a maverick