It’s been almost 40 years since I typed in a 2 line program on a 10 CPS Teletype and the computer responded, “Hi Rich.”

I’ve witnessed many magical moments since then and even though I understand how computers work, there are still times that take my breath away when it comes to technology. The first one of those occurred in 1994 when my wife asked me to “search the Internet” for an article on “knowledge workers.” I assured her that was not how computers worked. To humor her request, I fired up the brand new Mosaic browser (as part of the Prodigy service), and typed in “Knowledge Workers.” To my amazement she got exactly what she needed. She asked for a printout and thanked me for my help. I tried to explain to her that a miracle had just occurred. She was confused, “Isn’t that the way computers are supposed to work?” I said, “Yes, but they don’t.” Having spent much of my career trying to get IBM mainframes and personal computers to do the simplest of communications in the most complex ways imaginable, the elegant simplicity of the Web astounded me.

A few years later I came home and was greeted excitedly by my oldest daughter, who was sitting at our home computer pronouncing, “Dad! You’ll never believe this! You can get any song you want for free!” I assured her that was not how computers worked. She ignored me and said, “Tell me the name of a song…” Determined to convince her that what she thought she was seeing wasn’t true, I picked an oldie but a goodie, “Bend Me, Shape Me” by the American Breed, one of my favorites from the sixties. She asked me which of the 35 versions that appeared did I want to download?

Just recently I witnessed an equally powerful, albeit not quite so “magical” moment. My oldest daughter had just bought her first car and she was looking for insurance. While I was imagining a Saturday trip to AAA, she had a different approach in mind. She went to the Web and brought up the AAA website.  She was convinced she could buy auto insurance online. I was dubious. AAA proved me right, she needed to visit the office to complete the transaction. Undaunted, she tried State Farm.  This experience was much better, and yet, at the key moment where she pushed the button to purchase the policy, the website failed and the transaction was not completed. At this point she brought up the website for Progressive. It seamlessly and effortlessly completed the transaction in just a few minutes. The experience was so smooth and enjoyable, I believe Progressive has a new customer for life.  At 25 years old, she is likely going to spend a lot of future dollars with Progressive; dollars that won’t be spent with AAA or State Farm.

The lesson of this experience is fundamentally important to all business. The cost of switching now approaches zero. The only effort my daughter had to expend was the effort to type in a new web address for a different company. Her expectations, set over the years by her experiences with Google, Apple, and yes — even Napster in the early days — have created a very sophisticated and demanding user. Companies that get this will thrive. Companies that don’t will not survive.

Menlo’s High-Tech Anthropologists® understand this fundamental principle of modern commerce. The world has changed and we must change with it. Failure to understand this change will bring down mighty institutions, even ones that have lived for decades.