| Steven Postrel |
So you’ve purchased your coffee and chosen to sit at one of those round outdoor tables. As you lean on the table to write comments on a paper, it rocks annoyingly, possibly spilling some of your coffee. You try moving the table slightly on the uneven pavement, hoping to stumble into a stable configuration for its four feet, but several attempts fail. Eventually you resort to shimming one of the table feet with a piece of folded up paper, or a stack of sweetener packets, and this creates at least a metastable condition. Looking around, you notice that many other tables have similar combat repairs, so that the cafe looks like a furniture trauma ward.
Why don’t these tables have three legs instead of four? With three legs, they wouldn’t rock on uneven surfaces because any three points define a plane. You wouldn’t need those adjustable table feet that no one ever bothers to adjust because it’s so awkward to lean down and twist them. While each leg would have to be slightly bigger, you’d have fewer assembly or machining steps to perform. Is a 60 degree angle that hard to produce in this day and age?
The puzzlement that occurs when you run into objects and processes that seem, in obvious ways, to be badly designed is an especially clear example of the paradox of entrepreneurial opportunity. (By “obvious” I mean that superior alternatives, appearing to weakly dominate the item on all salient dimensions including total cost, exist or could be generated by straightforward modifications.) The aggravation involved induces stimulates entrepreneurial curiousity — one needn’t be some sort of preternaturally alert Kirznerian arbitrageur to notice that something seems messed up. Is this really a $20 bill lying in the street? If so, why hasn’t it been picked up yet? And if you’re so smart, why aren’t you rich?
Broadly speaking, there are three kinds of reasons why such apparent inefficiencies might not be remediable by entrepreneurial action:
1) You’ve overlooked or underestimated value or cost drivers that makes your proposed alternatives unattractive (i.e., surplus destroying). In the case of the table, maybe a) there are huge volume economies of producing long runs of single table-base configurations, and b) the four-legged bases can also be used with square tables, while three-legged ones really can’t (unless there’s some ingenious asymmetrical arrangement I can’t visualize). Or maybe the added wear on the feet of a three-legged table due to 4/3 greater pressure on each foot reduces durability too much. In general, there might be something like this that an industry insider would know right away that an outsider would not.
2) The sunk costs of transition, even excluding persuasion and organization costs, exceed the surplus gain. If the round table market isn’t too big and the three-legged advantage isn’t too overwhelming and sunk retooling costs are high, then it might not be worth it to make the shift, even though after retooling no one would ever want to go back to the old method.
3) While there could be a surplus gain from the innovation, and the present value of that gain could exceed the technical sunk costs of making the switch, the sunk costs of persuading people, reorganizing relationships, and/or overcoming collective action problems might be too high to justify the effort. End users may be happier with round tables that don’t rock, but it isn’t clear how this happiness would get translated into demand. Could a cafe with non-rocking tables put up a sign advertising this amenity, as movie theaters once did with those melting-ice-cube signs that said “AIR CONDITIONED”? Or could cafes expect more repeat business because they’ve eliminated a nuisance that people subconsciously associate with patronage?
And how could one convince a cafe owner (or furniture dealer) that either mechanism was realistic? You could try to overcome skepticism by writing a contract where some of your payment came only if more people sat at your non-rocking tables than at the older type, but there would be large measurement and transactions costs, not to mention institutional resistance to such unorthodox business models (as our sociologist friends would point out).
Here are some other design puzzles. You can add your own, collect them or trade them with your friends. Feel free to analyze which of the three categories above applies to each. If none does, then cheer up; you’ve just identified an entrepreneurial opportunity.
“Pick a horse” checkout lines (e.g. in supermarkets), instead of standing in a common queue and getting the next available clerk.
Multi-piece towel racks, where the bar can slip out of the mounting brackets if they loosen up and flex a bit over time, instead of single-piece racks where the bar is permanently attached to the brackets.
Standard spring-loaded paper napkin dispensers, which invite overloading to the extent that the first five or six draws produce only shreds, and which are occasionally loaded with the napkins oriented so that there is nothing to grab onto. Alternatives include the vertical one-at-a-time dispenser recently deployed at some McDonald’s.
Auto-numbering in Microsoft Word, which behaves like a peevish poltergeist, randomly changing number and letter headings, creating and destroying tabs, etc., instead of almost any other numbering utility I can imagine.
Medical bills and insurance forms, which go out of their way to obscure what was charged, what was allowed to be charged, what was paid, what you owe, etc., instead of almost any other reasonable design.
Mustard packets, which for some reason are much harder to tear open cleanly (the tear tends to go too deep) than ketchup packets.
CD jewel boxes, which are hard to open, expensive to make, and fragile, instead of cardboard sleeves sealed in plastic wrap.