The Pebble

A hand drops a pebble into a still mountain lake at sunrise, sending ripples outward, under the title The Pebble: how one simple principle could create ripples that change the economics of commerce.

A pebble dropped into still water doesn't move the whole lake. It makes a small disturbance, and the disturbance travels -- out past the point where it landed, into water the pebble never touched.

I've been thinking about that, because what I'm after with Real Prosperity is enormous. I want an economy where doing the right thing pays better than doing the wrong thing. That means changing incentives that have shaped commerce for generations, incentives that reward controlling markets, piling up power, and sometimes building customer dependency on purpose. I know the size of that mountain. But maybe moving it doesn't start with the mountain. Maybe it starts with finding the right pebble.

The Question That Started It

What if the product itself were the reason people bought it?

It sounds ridiculously obvious. Of course people buy things because they want them. But look at what happens after the sale. A customer adopts a software platform, and over time their data, workflows, employees, integrations and processes come to depend on it. Switching gets expensive, disruptive and complicated. The customer may stop believing it's the best value. They may actively dislike the company, and still they stay, because leaving has become too hard -- and the company knows it.

At that point the product stops being the main reason the customer stays, and dependency takes its place.

Making Money Isn't the Problem

I'm not against profit. I admire people who build remarkable products, and I celebrate competition and big financial success. If someone builds something that improves millions of lives and gets very rich doing it, wonderful -- they created the value they're being paid for.

But earning a customer's continued business and arranging things so they can't leave are two different acts. Making money isn't the problem. Making dependency the product is. And that difference gives us a place to start.

The Freedom to Leave

Picture a business making one simple commitment: our customers stay because they want to, not because we've made leaving hard.

Think about what that takes. The business has to deliver real value, keep its prices competitive, and keep improving the product. Its customers keep reasonable control over their information, their investments and their choices. And when a competitor builds something better, the business has to answer by getting better itself instead of putting up another barrier.

None of this means throwing out legitimate contracts, giving up intellectual property, or providing costly services for free. It means not manufacturing dependency as a substitute for value. The product should be the reason to buy it, and the reason to stay. I believe that's simple enough for nearly anyone to understand, and maybe strong enough to move whole industries.

But Wouldn't Businesses Lose Money?

It's the obvious objection. If customers can leave more easily, won't more of them leave?

Some will, and here the evidence runs against me, so I'll say it plainly. Lock-in is one of the most dependable profit engines in business. The economists Joseph Farrell and Paul Klemperer describe a pattern they call "bargain-then-ripoff": when switching is costly, companies compete hard for the first sale, sometimes below cost, then raise prices once the customer is stuck. Companies track retention and lifetime value closely, and the ones that do it well don't just tolerate lock-in -- they engineer it. I won't pretend every business that gives that up will make more money right away.

The same research has another side, though. Customers who see the trap coming expect to be squeezed later, so they hold back or demand a discount up front. Take the trap away and that reason to hesitate goes with it. Would people try a product sooner if they knew they couldn't get stuck? Would customers who can leave freely trust the company more? Would a business that stops spending on barriers spend more on the product, and would loyalty last longer because it's voluntary? None of those are guarantees. They're hypotheses, and hypotheses can be tested. Testing them is what moves Real Prosperity past idealism.

The First Ripple

Imagine two software companies with capable products at similar prices. One keeps its customers with proprietary data formats, painful migrations and restrictive contracts. The other makes its product easy to adopt, its data easy to export, and its service easy to cancel -- and works hard to give a better experience. Which would you trust? Which would you try first, or recommend to a friend?

The answer may feel obvious, but intuition isn't proof. We'd have to measure adoption, retention, acquisition cost, profit, referrals and long-term customer value. Suppose the second company shows that customer freedom actually improves its numbers. Then we'd have a competitive advantage with evidence behind it, and competitors would pay attention. Nobody would have talked them out of chasing profit -- someone would have shown them another way to chase it. That would be the first ripple.

The Second Ripple

Now imagine others doing the same: a cloud provider that makes migration easy, a subscription service where cancelling is as simple as signing up, an ad platform that earns money without following people around the internet, a bank that makes moving your accounts painless, a tech company that builds on open standards instead of deliberately incompatible ones.

Each of them still competes hard, still earns what it can, and still owns its own success. What changes is the question they ask. Instead of "how do we keep customers from leaving?" they start asking "how do we make this so valuable they don't want to leave?" A different question leads to different decisions and investments, and over time to different products, markets and expectations. Something that started as an unusual ethical commitment could end up an ordinary competitive requirement.

The Third Ripple

Then customers start expecting it. A business that makes leaving needlessly hard finds itself at a disadvantage -- not because the government banned anything, or anyone's wealth was confiscated, or entrepreneurs were told to sacrifice profit for the public good, but because its customers have better options and those options have proven themselves.

This is the outcome I care about most: an economy where exploitation pays less because integrity competes better. It doesn't need everyone to agree about morality or suddenly turn charitable. It runs on incentives, so people with very different beliefs and ambitions can take part because it works for them. A principle becomes an economic force that way.

What About the Rest of the Economy?

Lock-in is one form of a bigger problem. There are plenty of ways to profit from imbalances of information, power and opportunity. And some products are hard to replace for honest reasons -- complex integrations, specialized infrastructure, long-term investments. Hard to replace isn't the same as exploitative.

So how do we tell a dependency that grew out of real value from one that was manufactured? I won't try to read anyone's motives. Intent can't be judged from outside, and a movement that tries ends up condemning businesses it doesn't understand, which I don't want this to become. What anyone can judge is the exit. Can you take your data out in a form another tool can use? Is cancelling as self-serve as signing up? Can you leave without asking anyone's permission? Those can be checked by anybody, and they're the same tests on the front page of this site.

We'll investigate, test and measure, and when we're wrong we'll revise. The goal is to find out how businesses can become more successful by creating more real value for the people they serve. If it works in one industry, we try another.

A Movement That Must Practice What It Preaches

There's one more thing I can't ignore. If Real Prosperity stands for freedom from manufactured dependency, it can't become a source of dependency itself. It can't require anyone to buy my products, turn into a licensing scheme built to enrich its founder, set standards only favored companies can meet, or lean on my leadership so hard that the principles vanish when I do.

I have my own businesses, and I hope they succeed. They answer to the same scrutiny as everyone else's. When they live up to these principles, good. If they fall short, that gets said out loud -- one already has been, on the front page. The credibility of all this has to rest on something stronger than my intentions: conduct anyone can see, accountability I don't control, and principles that outlast the person who first wrote them down. Otherwise all we've made is a new brand around an old problem.

The Mountain and the Pebble

I have no illusion that one principle will transform the global economy. Powerful interests, complex institutions, entrenched habits and plain human nature stand between the world as it is and the one I'm hoping for. Some of those obstacles may never move, others may take generations, and some of my assumptions are going to turn out wrong.

But one simple thought stays with me. We don't have to solve everything to start solving something, and we don't need every business to adopt a new philosophy -- we need one to show that a better practice works. Then another, and then enough that the practice becomes the rational business choice.

  • Make the product worth buying.
  • Make the customer free to leave.
  • Make continued loyalty something the business has to earn.

No confiscation, no punishment for success, no ceiling on wealth -- just a different relationship between the people who create value and the people who pay for it.

Lock-in has decades of evidence behind it, and this has almost none yet. I don't know whether this is the pebble. It's worth dropping into the water anyway, and then watching closely what happens. The beginning of a more prosperous world may turn out to be something much simpler than a revolution: a business that gives its customers every freedom to leave, and every reason to stay.

-- Richard Whitney. Write to me if this lands with you, or if you think I've got it wrong. More posts.