In my last post, I included a video in which Barry Schwartz, author of The Paradox of Choice: Why More Is Less, suggests that while some choice is a good thing, a lot of choices might not be.

If you look at how Japanese automotive companies established their beachhead in terms of small car sales when they first came to the United States in the 1970s, there were some cultural and economic factors that were in their favor, such as the cost of gas and so on, but the other part of it was that they just had a simpler line-up.

They radically simplified the number of varieties you can have of a particular car model and that made it much simpler for a consumer to say, for example, “I think I want to buy a Honda.” Your head didn’t have to explode in making that decision.

General Motors, on the other hand, is the perfect example of what happens if you offering is too spread out. For years, GM had all these brands– Chevy, Buick, Pontiac, etc… –and none of them were particularly good or reliable (IMHO)! Now, they’ve finally gotten rid of a bunch of lines they previously could never bring themselves to shoot down (forced to do so by their recent bankruptcy and reorganization).

Once again, the lesson to be gleaned from this is to examine your desire to provide variety – and do what marketers like to do – which is to stratify a market to capture little pieces of everything along the continuum. Does that actually undermine your opportunity to create a distinct beachhead in a given market, with a superior offering for that market?

It’s counter-intuitive in a lot of cases. Naturally, you’d say, “Well, I want to offer a different color for everyone’s taste, so I can sell more stuff,” but go back to the example of the iPhone again. You can’t get an iPhone 4g other than with a black back. They don’t have the option of a white casing, like the previous incarnations did. Now, perhaps that could have been a manufacturing thing, whatever, it doesn’t matter. The point is, that’s it! It’s black. That’s what you’re going to get. Moreover, it’s cool. They sold you on it, and that’s how it is.

As much as we intuitively think variety and freedom of choice are good, we gravitate towards companies and products that FOCUS the variations offered and the choices we have to make. Does your company offer a lot of options? Too many? How could you simplify your offering, and streamline your customers’ decision-making process?

It’s a familiar scene– a guy walks into a Starbucks looking for a cup of coffee, looks up, and stares at the menu like a deer in headlights for five minutes, overwhelmed by all the choices he has to make before he can pay $4 for his delicious beverage. Cappuccino, frappuccino, macchiato, americano, mocha, latte or brewed coffee? What size? How many shots of espresso? Hot or cold? Regular, decaf, or half-caf? Skim, whole, 2%, or soy? Do you want a flavor in that? Whipped cream? For here or to go?

We’ve all turned on the TV, flipped through 500 channels and gave up and turned it off because “there’s nothing on.”

It may seem counterintuitive, but freedom of decision often leads to indecision. In this video clip, Barry Schwartz, author of The Paradox of Choice: Why More Is Less, talks about this puzzling phenomenon, and suggests that while some choice is a good thing, a lot of choices might not be. (It’s a little long, but worth watching!)

I couldn’t agree more with the central idea that one can offer too many choices. In fact, a great case in counter-point is Apple. Apple has refined the art of reducing options without making consumers feel constrained. Compare them to, lets say, a company who’s lunch they’re eating (IMHO): Research in Motion. RIM keeps coming out with a new model seemingly every day, and it makes it hard to make a Blackberry decision.

If you want to buy an iPhone, the only decision you really have to make is how much memory you want. There’s not a whole lot of other options. You can argue that the choice between a 3GS and a 4G is a choice, and it is, of a kind, but fundamentally, the way you’re going to interact with the device is identical. Whereas Blackberry offers phones that flip open, one that slides out, one that doesn’t even have a keyboard – and all these things are things that make you wonder if you’re making the right choice. On top of that, Blackberry (and Apple will soon follow) is offered on many networks, with phone varieties that are carrier specific.

In the case of the iPad, again, there’s really only two decisions: Do you need 3G, or WiFi? That’s the big decision (the other is 16GB, 32GB or 64GB – which is less complex) and I know all about that choice, because I went through that very decision when my wife surprised me with an iPad on my birthday. She said she wasn’t sure which I needed, so she got the WiFi model, but I could exchange it for the 3G version if I wanted.

I found myself paralyzed between desperately wanting to open up the box and tear off the cellophane wrap– but knowing that once I did that, because there’s a big restocking fee, there would be no turning back– or I had to get to the mall to get the other one.

I wrestled with that decision for nearly an hour, debating what I should do. That choice made it hard for me. I ended up, like most boys with toys, choosing to tear open the cellophane and enjoy my iPad immediately. Immediate gratification won out. I don’t regret that decision, for a variety of other reasons, but the point is, choices make it hard.

What do you think? Is it better to have more options, or to keep it simple?

[Stay tuned for part two]

Today, I know that these memories are shared by many thousands of other business leaders in high-tech and other “soon-to-be revolutionized” industries of what is now referred to as the “dot bomb.”

Since that time, I asked myself – and anyone who would listen – what was there to learn from this incredibly expensive education. Not, “what happened to dot-coms?” – that’s a story well examined elsewhere. No, the story that interested me was far more fundamental than that.

An important and potentially groundbreaking business story.

The dot-com era saw no lack of ideas – even great ones – and some that eventually fulfilled the exaggerated speculation that fueled their origins. Yet – so many ideas failed. A broader question hit me – is this only a dot-com thing? As I contemplated that, I realized that the dot-com era simply accelerated something else that was going on. One picture that formed in my thinking was of a man falling from the Empire State Building – with a jetpack pointing the wrong way – into the pavement.

The principle of gravity – the reality of falling – is not a “jetpack” thing. The jetpack is for those times when smart people make many fast and wrong decisions. It is a “gravity” and “pavement” thing. Businesses launched before and since the dot-bomb – some succeeding – many failing. And – many of those failures are in larger and already successful companies.

So – a few questions started taking shape …

• How can big and great ideas get launched – sanely and successfully?
• How are buying decisions being made in businesses today?
• If I’m marketing or selling – what should I be doing differently?

These answers formed the driving force behind the methodology of Value Prop – both the book and the services my company provides.

Note: a seminal white paper describing some of the principles are available at www.valueprop.com and the book, Value Prop is at Amazon.com.

In the years since that April evening and the immediate shock of the unsustainable and oftentimes ridiculous business climate of that time – I returned to my roots – high-tech products and services, thoughtful planning and the actual delivery of products and services that did something.

My journey took me to one of the most respected names in technology research, where I brought strategic resources to bear for some of the most important names in business technology – seeing the development of visions and plans up close. I later worked with smaller, more entrepreneurial business-services companies – how could they overcome the challenges of size, reach and name recognition?

I asked questions – many questions – in many powerful discussions with business leaders and in-the-trenches professionals. Friends, confidantes and my own experience kept telling me that marketing and sales thinking was already mature – “done” – and there was nothing new to say about it.

But guiding my search was a single thought – the question behind all the other questions:

• What if there was a way to organize and pull together marketing and sales ideas into something new and powerful – something where the whole is greater than the sum of the parts?

What if?

It came together in pieces at first – some of it “basic” – some of it very complex. As it came together I knew that ultimate validation would be in the “doing” – and so I took these ideas on the road – with clients – and kept asking questions.

My passion was business-to-business – so I focused on that. And what I found was a need for a new way – a new path – for developing go-to-market initiatives that were strategic, practical and successful. The path started taking shape around connecting all key people and all key processes involved with the development and taking to market of new products and services. But even that wasn’t enough. I knew that pulling people and processes together was a limited and operational view.

What about the “art” of marketing? – the idea part…

So – what become clearer was this: people, process and the power of ideas – now that was more like it!

How this gets connected to “now” comes next…

People often ask me, “Jose, how did you get started on this path?”

That is – they want to know how I started Value Prop and more importantly – what my “journey” was to get here. Well, it’s a long journey – but I think the recent catalyst or turning point was a moment about 7 years ago…

I came home to New York City, after several days at our corporate headquarters. It was late on a weeknight in April 2000. Excited as I entered my house, I woke up my wife, and sat her down. “Honey – we’re worth fifteen million dollars!”

Our company had just taken on some strategic partners and a capital infusion – and our investment bankers had just told our management team what they felt our company was now worth. This was shaping up as the single greatest day of my business life.

Calmly, even gently – she asked, “Can we spend any of it now?” Sputtering, I answered, “not yet, but…” and then my voice trailed off. All my nagging doubts became real for me in that moment. I knew the company and many like it had become so focused on positioning, strategic alliances and other marketing imperatives – that the notion of actually delivering something of value was often put on the back burner.

She was right (of course!) – we couldn’t spend any of it.

A year or so later, I left the company – owed a lot of money (never collected, naturally) – dazed and confused.

What happened? How could we be in the executive dining room at one of Wall Street’s most prestigious investment banking firms one April – and missing payroll twelve months later?

By this point in my career, I was an experienced entrepreneur. I had worked inside and for Fortune 500 companies – I had multi-million dollar sales experience and I was unique – with a strong background in marketing, sales and technology – seemingly well equipped for the intense revolution in business services that was shaping the global economy at the turn of the new millennium.

We had worked with some of the world’s largest automobile, furniture, education and legal services companies – all looking for a guide through now unfamiliar territory.

Our board had seasoned senior executives and venture capital veterans. The stars, moon and – it appeared – Wall Street had lined up behind us – ready to make us all very rich. Looking everywhere – it seemed – others were making fortunes.

Why not us? I asked.

Well – I’ll continue this tale of woe and wisdom earned soon…