everything was better back when everything was worst.

I recently watched a TED presentation by Barry Schwartz on the paradox of umlimited choice (click here for the video). It was a very thought-provoking presentation whose main message was how the proliferation of consumer choice has led to paralysis when making decisions. He also points out that this thing called “choice” is what most of the Western world is built on. He uses the following logic: our political ideologies stress maximizing the welfare of our societies and we believe that this can be accomplished by maximizing the welfare of each individual. Each individual can then maximize his/her own welfare by having the freedom to make their own decisions. Having the freedom to make decisions comes from having choices to decide from.

What’s interesting is that he stresses that with more choice, our expectations of the decisions we make are greater. However, we often don’t feel this way because we constantly mull over the other choices that we passed up (economists call this opportunity cost). He then goes on to point out that everything was better back when everything was worst. They weren’t as many choices and there was a clear choice between good, better, and best.

The business application of this lesson is determining the number of choices to offer consumers and how do we market/position them. Do we flood the market with products and advertising and then put the onus on the consumer to decide? Or do we clearly position our product and help guide the consumer to the right product for them? One path leads to consumers being paralyzed about what to choose while the other pushes the consumer. I know that these are two extreme examples but hopefully they are thought-provoking.

Anyways, it was a great talk and for those who want to know more about TED, check out their website. There are tons of great info here. I hope I’ll be asked to present to this prestigious organization one day.