October 30, 2020

No-Code and the Ikea Effect: How software lock-in evolved and made us never want to churn.

The 6 types of software lock-in.

by @maguay

Writer. Amateur photographer. Information architect. Frm. founding editor @racket and @capiche, senior writer @zapier, Mac and Web editor @AppStorm. Personal blog: @techinch.
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Listen to an audio take on this essay on the SaaS Radio Hour’s podcast.

Flat-pack Ikea furniture can hardly rival the permanence of an oversized mahogany desk. But the mind’s a fickle thing, and you might value a desk you spent an afternoon assembling more than it’s worth.

That’s what a Harvard Business School team dubbed the Ikea effect, finding that “labor leads to love” and love to irrationality.

They gave one group a storage box to assemble, handed another group the box pre-assembled, then asked both to bid on it. “Builders bid significantly more for their boxes than non-builders,” wrote researchers Michael Norton, Daniel Mochon, and Dan Ariely. “Those who assembled their own box valued it more.”

The same applied to paper origami frogs (where creators bid nearly 5x what non-folders did) and LEGO sets (where people bid nearly double for a set they built versus one someone else built). That paralleled an earlier study that found people preferred making cake mixes when they had to add an egg, versus ones where you only had to add water.

We like feeling useful, like making stuff, feel that our unique contributions add something special to even a standard kit.

So when software tells us to spend hours setting it up, we jump at the opportunity to build our own apps without code. Once we’ve put in the effort, we’ll be happier using it, less likely to churn, and might even pay more, even if we’re more locked in than we were with older software. We may have complained for decades when software locked us in; now, we’re happy to stay.

Sometimes we’d rather break an egg.

When software locks us in.

Feature lock-in.

We start using new software to solve a problem, fill a need, turn our bicycles for the mind into flying cars.

So software lock-in starts with our blessing. We choose a new and better tool. VisiCalc in 1979 or Photoshop in 1990 didn’t have to do everything. Their core features were innovative enough, people gladly picked them.

That first-mover advantage gives a wide feature gulf versus the competition. You started using Excel because it came with your computer; you continue using it for one of its 447 unique functions.

Gmail’s tags. Superhuman’s command palette. Evernote’s web clipper. Some of the software that commands the most loyalty does so thanks to feature lock-in. You stick with software longer than you would otherwise when it does that one thing you need better than anything else. And you stay by choice.

File Format lock-in

Photoshop file format incompatibility

But what if you strayed? What if you looked across the fence, though the grass was greener on Google Sheets’ side?

What if your data was already in Excel’s format, and that alone convinced you to stay?

That’s what made file formats the original tech menace. You’d find a nice new writing app and want to switch, but no. The powers that be demanded everything in Word .doc format, 12pt Times New Roman. It wasn’t worth risking things looking odd. You’d use Word and like it.

New file formats weren’t all bad. Microsoft’s Office formats let you include more formatting and detail in your spreadsheets than a .csv alone would allow. They sometimes enabled the feature lock-in that made us love software. But they also felt like tech giant’s way to keep us using their software forever. You’d stick with the same software, buy every upgrade, just to ensure you could always open your files.

Database lock-in

Then files died, replaced by databases. What started with tools like Microsoft Access and Outlook, with everything saved in one massive database file, became the default in web apps and SaaS.

You didn’t save Google Docs files; they along with your Gmail and more were stored in Google’s cloud in some unknown format. You didn’t backup your Salesforce databases; it was a collection of data you viewed in Salesforce’s web apps, something we trusted them to manage. You could still export your Mailchimp contacts, Todoist tasks, Evernote notes, and more—but something would be lost along the way. A .csv with your data would never have everything your SaaS application contained.

Media apps took it a step further; you can’t export your iTunes movies and Kindle eBooks. But even in business SaaS with export tools, the death of files kept us locked-in to databases, even as it freed us from the tyranny of file formats.

Subscription lock-in

Salesforce pricing forces you to pay for a year

A parallel trend made you feel even more stuck: Subscriptions.

Word’s file formats kept you upgrading, but you could always opt out if you wanted. At worst your files might not look perfect if you stuck with the version you owned. Then came subscriptions and the death of upgrades. Subscribe to Adobe Creative Cloud today, and if you go to cancel, you’ll first need to pay 50% of your remaining contract. Subscribe to Salesforce, and you’ll pay for the year in advance, where the sunk cost might keep you from switching.

Tie subscription lock-in with database lock-in, and it’s no surprise that SaaS pricing can breed resentment. It’s all too easy to feel trapped.

Network lock-in

But sometimes, we’re happy to be stuck, as long as everyone else is.

It’s not like we love Facebook and Twitter’s software that much, that Slack or Zoom couldn’t be improved. But they’re our digital neighborhoods and offices, the places filled with people we care about. We stay for the network effects, where each contribution and new person who joins makes us that much less likely to leave.

Google Docs brought that idea to productivity software, with comments and feedback from your team that made documents more than just files. It’s what makes Figma more sticky than Sketch and Illustrator—the latter keep you around with features and file formats, the former keeps you around with friends. The network effects are reason enough for many to switch and stick.

Or we could just build our own software.

IKEA instructions

There was always other route: Build your own software, make things that fit exactly what you need, and never worry about file format and subscription lock-ins.

You’d waste time reinventing the wheel, but would avoid not invented here syndrome, the feeling where as Dr. Ariely phrased it, “If I (or we) didn’t invent it, then it’s not worth much.”

It’s been a problem for ages. As @RusHeywood a contributor to the early C2 wiki, found as their company built their own software in the pursuit of perfection. “Our stated reason for doing so is that But then we go and write our own thing that has different bugs and different limitations.”

Then came no-code. You could have pre-built apps and tweak them, too.

Creation lock-in

Microsoft Access introduced me to building apps without coding in the ’90’s. Suddenly I recognized it everywhere: It powered a Point of Sell system at a small shop I frequented, and the library database at school. I’d go back years later, and that old Access database was still the backbone of those local institutions.

HyperCard had been that for an earlier generation of computing, letting people build wikis and games and apps in 1987. Airtable did that for the 2010’s, reinventing what Access could have been on the web.

Notion, with notes and databases and kanban boards and more in one. Zapier and IFTTT, letting apps do more together than they ever could alone. Roam, letting you connect notes in unique ways, something a plain text file alone could never do.

So many of today’s positional software thrive on being what you want them to be. Even Salesforce at the turn of the century won in part for its flexibility. You don’t simply use Salesforce, you customize it to fit your team’s needs, and that’s what makes it stick.

You could always export your Salesforce or Airtable data in a .csv file, copy your Notion notes to another app. But you could never recreate what you’d built. You aren’t just outlining thoughts in Roam Research or writing reports in Coda—you’re using the unique thing you’ve built in those apps, something that’s not quite your own app, but also not quite a generic, off-the-shelf tool.

It’s your thing. We’re happy staying, locked into using a tool where there’s perhaps no other direct equivalent because we’ve shaped it into the app we want.

Feature-in-your-product lock-in

Then come the APIs, the Amazon AWS and Twilio and Stripe’s of the world, the tools that let you build out features in actual apps instead of coding everything yourself. You can accept payments, send SMS messages, encode and stream video, add chat and push notifications, and so much more today with off-the-shelf APIs.

“The big decision in companies was ‘Build versus buy’, the classic IT decision,” explained Twilio CEO Jeff Lawson in a recent Stratechery interview, something that’s morphed into “Build versus die” as he describes it. Off-the-shelf products really may not cut it, and if your competition is building their own tools, you need to, too. APIs for features let you do that without fully reinventing the wheel every time.

Here, at an even deeper level, you’re locked in. You’ve built your product around another bit of software; odds are you’re not going to go to the trouble of re-writing to remove it.

The joy of creation.

You’d almost think we’d find Trello less valuable than Todoist, since we both pay for the app and invest time into setting it up. Yet the Ikea effect suggests we may be happier with our kanban board. The time invested makes us all the more motivated to get the most out of it.

Thus churn, “a fact of life for a subscription company - like death and taxes,” as ProfitWell CEO Patrick Cambell put it, may not be quite as sure of a thing anymore. Typeform and Zapier found that people who used the tools together were more likely to stick with them. “We suspect that Typeform users seeking to integrate with other apps are also likely to be those that find the most value in Typeform,” wrote Zapier data scientist Chris Peters. Clearbit found something similar: “When customers integrate Clearbit with their other tools … they are less likely to churn.”

We’ve made the software our own, customized it just enough for the Ikea effect to keep us hooked. We invented it here, or so it seems, and the traditional objections to using pre-made software or the arguments to upgrade to the next shiny thing melt away.

“It’s often effort that ultimately creates long-term satisfaction,” wrote Dan Ariely wrote in his book The Upside of Irrationality, after co-authoring the Ikea effect paper. “Greater labor leads to greater love.”

So it seems with software. Rather than resenting the time we put into building Airtable databases and Notion notebooks, rather than worrying if we can take our data elsewhere tomorrow, we’ve finally learned to quit worrying.

It’s why we look back on our Geocities sites so fondly, why HyperCard lives on in the popular imagination, why Minecraft and Roblox stay popular where other games come and go.

We’ve built something. We fell in love with our handiwork.

Image Credit: IKEA wrench photo by @mbaumi via Unsplash.

quietnotion's avatar
@quietnotion (replying to maguay )
almost 3 years ago

Interesting thought approach. Thanks for writing this.

2 points
maguay's avatar
@maguay (replying to @quietnotion )
almost 3 years ago

Thanks for reading!

1 point
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