Monetizing at the Cost of the User Experience

by Jeff Humble

Dear Reader,

Companies don't like to consider how customers can be annoyed by monetization.

Companies are always looking for ways to monetize their assets. Even attention is monetized these days.

As we'll see in two examples, monetization can make or break the user experience.

Monetizing Fail: Yahoo’s Decline (1990s-2010s)

Yahoo used to be the tech darling of the internet, much like Google or OpenAI is today.

The company had humble beginnings as a simple guide to the internet, but at its peak, Yahoo was worth over $100B in market value in 2000.

Fifteen years later, in 2015, Verizon bought them for a mere $4.83B, a hefty price but at a 95% discount from its high in 2000. How did it lose so much value?

Yahoo couldn’t evolve past its dot-com-era understanding of customer needs. Google and Facebook realized consumer trends were going mobile in the early 2000s. The user experience was getting streamlined and simpler, but Yahoo was too focused on monetizing its web traffic.

By 2015, this lack of vision meant Yahoo’s interface had an ad-heavy, cluttered approach, while Google’s slick interface was cleaner and worked better.

Yahoo’s inability to understand consumer trends or form a cohesive user-centric vision prevented it from making the right strategic moves, ultimately costing it $95B in lost market share.

Monetizing Win: Superhuman (2019-Present)

Superhuman is a powerful email app aimed at making work emails more productive. The company claims to save you four hours weekly while improving response times by two days. Everything about the app is built for pro-level business customers who need an edge, like salespeople.

Superhuman uses a variety of approaches to achieve pro-level email:

• Built around speed (so users can answer more emails faster)
• Intuitive user experience (so users get snappy interactions and a keyboard-only UX)
• Rigorously-tested AI features (so users can automate their emails and save more time)
• User-led growth (so users who like the product can easily become superfans)

Rather than monetizing with ads like Gmail, Superhuman prioritizes a slick, distraction-free user interface without ads to separate itself from the competition. They aim to make every interaction on the app less than 100 milliseconds so that the experience feels magical. They also have a 30-minute, extensive onboarding to teach customers how to use their keyboard shortcuts for a mouse-free user experience.

It seems to work because Superhuman allegedly has 50k paying users at $30/month. While that might sound expensive for regular email users, their pro-level customer focus means companies like Notion, Dropbox, and Spotify count among their users.

Superhuman shows us that some users are willing to pay for a better user experience.

Superhuman's story can inspire you to find ways to monetize and improve the user experience at your company.

Who better to do that than you?

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Until next month, stay strategic! ✌️

​ Jeff Humble ​Designer & Co-Founder ​The Fountain Institute ​

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