A big part of the pain reduction is reducing transaction costs. Those are the costs involved with finding, negotiating and enforcing any agreement. The personal costs of time and risk beyond what you paid directly for the service. The greatest gain is when the transaction cost is high relative to the direct costs. For example, car sharing where you expected a stranger to get their own temporary insurance has effectively infinite transaction costs. Car share services changed the California legislation to allow it and created a new industry in the process. From online travel to ebay to photo sharing, a large part of what Silicon Valley has done for decades is reduce transaction costs. Perhaps two different ways to describe the same thing.
Yeah. Transaction costs are definitely one of the most common causes of pain, and often one of the costs that is easiest to reduce with technology.
Of course you have to be careful because when you reduce the transaction cost of some behavior you get more of it - including behaviors you might not want.
A big part of the pain reduction is reducing transaction costs. Those are the costs involved with finding, negotiating and enforcing any agreement. The personal costs of time and risk beyond what you paid directly for the service. The greatest gain is when the transaction cost is high relative to the direct costs. For example, car sharing where you expected a stranger to get their own temporary insurance has effectively infinite transaction costs. Car share services changed the California legislation to allow it and created a new industry in the process. From online travel to ebay to photo sharing, a large part of what Silicon Valley has done for decades is reduce transaction costs. Perhaps two different ways to describe the same thing.
Yeah. Transaction costs are definitely one of the most common causes of pain, and often one of the costs that is easiest to reduce with technology.
Of course you have to be careful because when you reduce the transaction cost of some behavior you get more of it - including behaviors you might not want.