New Technology Incentive

Nov 2013

(Based on a panel about PCEHR and Telehealth)

 

“I like refried beans. That’s why I wanna try fried beans, because maybe they’re just as good and we’re just wasting time. You don’t have to fry them again after all.”

– Mitch Hedberg

 

“Waste your money and you’re only out of money, but waste your time and you’ve lost a part of your life. The ultimate goal of a more effective and efficient life is to provide you with enough time to enjoy some of it.”

– Michael LeBoeuf, How to Get Customers and Keep Them for Life

 

One of the most baffling things in medicine is how few people use clinically proven new technologies. It’s perhaps because so much medical software is designed with the cognitive bias that medicine is hard therefore the software should also be hard. So instead of removing friction it accidentally creates it.

It’s astounding to people how easy it is once you enter the field. Just by way of there being a high barrier to entry few people get to see inside. As a result the mystique is greater than the mystery and many are dissapointed to learn how unsophisticated it really is. That trying to save lives is actually quite boring. But seeing this, with their preconceived bias, proceed to create something complicated and totally unusable. Medicine is one of those fields just dying for good software. It doesn’t just happen in medicine, but in most fields.

Good software shouldn’t have the same mechanism of action as software that came before it did. It should have similar elements but fundamentally be a new machine. A great explanation I heard once was good software should seem to do something extraordinary, but with all of the technical complexity abstracted away from the user, so it also seems simple. Something with both those qualities will seem like magic. Because it does a lot with very little and doesn’t show you how it does it.

But when you didn’t quite get magic. What do you do? When friction is accidentally added instead of removed, how do you get people to use it? One method is by paying them. And from there we get something really confusing. A technology incentive. Usually when the word incentive is used it has something to do with the government.

It’s basically a payment to encourage uptake of new users. But not in the way a nightclub will pay a pretty girl to frequent their premise with the hope of attracting more clientele, but in the way you might begrudgingly make a teenager wake up to go to school in the morning. Everyone knows its good for them but they don’t really want to do it, because for the average teenager, they don’t really see the point.

A curious question is how is this different from a company paying to acquire users? Many Ecommerce companies give a new customer something for free to start shopping. The difference between an incentive and say, the cost of user acquisition, is that one is giving money to a user to use a new thing reluctantly, whereas the other is like a try before you buy.

 

I think it’s worthwhile to redefine what a new technology means. Strictly just because the word new is inserted I don’t think is referring to chronology, but rather impact. It’s not new as in brand new but new as in new type. It’s sometimes worthwhile to figure out if you’re talking about new technology. Are you talking about brand new technology or a new type of technology? Those semantic differences lead in two very different directions.

I’d side with the latter but so often a person is talking about the former. That’s how you end up with situations where you hear: “We’ve created this new technology.” What does it do? “It does the same thing the old one did.” It almost defeats the purpose if you design in reference to what already exists.

A good latticework to measure this is when the benefits are self evident. There are only so many things you can improve and they fall under four big headings. Usually new technology can allow people to do something they previously couldn’t, make something cheaper; increase efficiency like make something faster or use less resources; or increase output. The last two are effectively the same thing. But if it reduces costs, why does it cost so much?

It’s really common for this to happen when new technologies are created by referendum and is the go to model of government projects. Because if everyone agrees something is a good idea, it’s no ones fault if it doesn’t work. And everyone gets to take credit if it does.

They pick a problem and will try to spend as much money to fix it as they can get away with to create jobs. This isn’t strictly true, it’s more that they allocate an amount of money to fix a problem which invariably ends up spending it all. When you are prepared to spend i, you’ll usually end up spending i++. This is akin to a brute force attack which usually takes up a lot of resources and doesn’t always work.

Rather than asking the glaringly obvious question of how do we fix this problem? A better question might be, how cheaply or elegantly can we fix this problem? It’s the difference between trying to optimise, and thus reduce the capital expenditure or knowing that you have a certain amount of capital which you have to spend. It’s not like a project is going to give it’s money back.

 

They say that some of the greatest inventions are created by a small group of people to fix a personal problem. Historically that is how many of the best creations have come into being. And the fixes are usually cheap because they were invented with very little money. They were created under constraints, which is why so many great things emerge out of chaotic conditions.

So why do these kinds of big government projects never end up being cheap? I don’t really know what the answer is to that. I think largely it’s because of bureaucracy. The most expensive resource is people, especially people who don’t understand the thing they are trying to have made.

I think it also has something to do with this. When you overpromise and underdeliver, you are dissappointed. But when you underpromise and overdeliver, then you are amazed. But change the words promise to reflect the resources at your disposal and you get:

When you start with a lot and you underdeliver, then you have wasted your resources. But when you start with little and overdeliver, then you have made the most out of your resources.

Proof by analogy. I know a guy who’s entire job is making Enterprise websites with open source technology. I asked how he figured out what to charge. His answer was as much as someone is willing to pay. I thought that was a fascinating answer. It wasn’t as little as it costs to get the job done. But as much as he can get away with.

Why are people so willing to pay this high price? Probably because the ones commissioning it believe it is so much more expensive than it really is, so they allocate more than they need to.

There’s usually a lobby group somewhere in this loop demanding these incentives to change their behaviour, because they’re the ones who will usually benefit from it. But it rarely works.

 

Why don’t incentives work? The reason is because they get abused and misaligns the priorities. A lot of people start using the technology to receive the incentive, then they never come back. You end up with this new thing without any pressing need for it.

Simplistically, I don’t understand how anyone believes an incentive to be a good idea. It’s like, “We’re the government and we’ve got all these big software companies together and created this groundbreaking new technology paradigm.”

….. And we have to pay people to use it?!?!?

Shouldn’t the incentive be the new technology itself? Almost a litmus test for failed technology is if you have to pay people to use it, since they don’t use it of their own volision.

But the crux is they should just want to use it. Like if it’s really good, why do you have to pay them, they should be trying to pay you to use it, right? The whole point of new technology is it’s better. It’s an improvement over anything done before. So people should just want to use it. Because it’s better. Not because they’re getting paid to.

So if you have to be paid to use something, doesn’t that mean whatever you’re using sucks? Because what that boils down to is, if you weren’t paid, then you wouldn’t normally want to use this thing.

A great line I was told once is that fundamentally new technology creates its own demand. So you’ll know when you’ve created a new technology because you’ll get so many people wanting to use it that you won’t be able to keep up.

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