The Seven Deadly Sins of Consumer Technology and Where to Invest in Network Effects

The Seven Deadly Sins of Consumer Technology and Where to Invest in Network Effects

Introduction:

The concept of the seven deadly sins has permeated various aspects of our culture, including the realm of consumer technology. These vices, rooted in human nature, have shaped our behavior and influenced the growth of consumerism, capitalism, and culture. This article explores how these sins manifest in the world of technology and highlights the importance of network effects in driving value creation. Additionally, it provides insights on where to invest in network effects for future growth.

• 1. Pride: The Power of Self-Curation and Achievement

Pride is a sin that drives us to curate and admire our own achievements. LinkedIn, for example, taps into this sin by allowing individuals to showcase their professional accomplishments. The platform's strong network effects have made it a bedrock for job-seekers and recruiters. Strava, a social network for athletes, also capitalizes on pride by enabling users to showcase their athletic achievements.

• 2. Sloth: The Rise of Convenience and Gaming

Sloth, often associated with laziness and a desire for convenience, has found its place in consumer technology. Netflix, with its on-demand streaming service, exemplifies how technology has made entertainment consumption effortless. Gaming, a booming industry, offers immersive experiences that allow users to explore virtual worlds without leaving their physical space.

• 3. Envy: Comparison and Authenticity in the Digital Age

Envy thrives on comparison, and social media platforms have become breeding grounds for this sin. Instagram disruptors like BeReal and Poparazzi promise a more authentic, less curated reality. However, even authenticity can become performative over time. Virtual showrooms and crypto wallets exemplify how envy drives consumer behavior in the digital realm.

• 4. Greed: From Investing Apps to Gamified Food Ordering

Greed, associated with an insatiable desire for more, has been harnessed by various consumer technology applications. Investing apps that offer easy access to financial markets tap into this sin. Additionally, gamified food ordering apps like Snackpass, where users can earn rewards and gift free items to friends, capitalize on the desire for more while creating a sense of community.

• 5. Lust: Dating Apps and the Power of Sex Appeal

Lust, a sin deeply rooted in human nature, has become a driving force behind the success of dating apps. Tinder, known for its looks-based approach to dating, and Grindr, a popular gay chat app, have leveraged lust to capture significant user engagement. Dating apps, paid communities, and fan subscription services cater to the human need for love and belonging.

• 6. Wrath: Angry Tweets, Review-based Apps, and Robot Lawyers

Wrath, the expression of rage, finds its place in consumer technology through platforms like Twitter, where users often appear angry. Review-based apps like Yelp heavily rely on wrathful expressions of dissatisfaction. Additionally, DoNotPay, a "robot lawyer" app, allows users to sue anyone at the press of a button, addressing the anger and frustration caused by various everyday issues.

• 7. Vanity and Acedia: The Desire for Recognition and Apathy

Vanity, closely tied to envy, has become prevalent on visual-based social networks like Instagram. Apps like Facetune, which allow users to edit their photos for a more perfect appearance, exemplify the desire for recognition. Acedia, a term referring to apathy or listlessness, is less explored in consumer technology but can be seen as a lack of concern for one's position or condition in the world.

Investing in Network Effects:

To capitalize on the power of network effects, it is crucial to focus on platform applications that become platforms themselves. These applications, built on top of hardware platforms, capture the majority of the value created. Additionally, identifying remaining platform applications or main applications on mobile or the internet can lead to significant growth opportunities. Exploring innovation in laggard verticals such as enterprise, financial services, healthcare, and government can also yield fruitful results. Lastly, keeping an eye on emerging hardware platforms and their potential platform applications is essential for future investment decisions.

Conclusion:

The seven deadly sins have seeped into the world of consumer technology, shaping human behavior and driving value creation. Understanding how these sins manifest in various applications and platforms is crucial for both consumers and investors. By recognizing the power of network effects and identifying opportunities for investment, individuals can navigate the ever-evolving landscape of consumer technology and capitalize on its potential for growth and innovation.