User interacting with gold iPhone

Effective Thinking

The Rise of the Experience Economy at SXSWi

By now, South by Southwest Interactive (SXSWi) is a distant memory – a week is forever on the internets. All of us tech entreprenerds are safely back in our warehouse offices drinking our favorite single origin coffees. And for those of you who didn’t make it this year, it seems that the general consensus is that South By is so over – that it’s been overrun by Big Tech money and that self-promotion is the only game anyone wants to play. I’d like to offer a different point of view.

SXSWi 2013, more than any I can remember in the recent past, was marked by the value of experience – the experience economy, if you will. Take the ubiquitous swag giveaways that pervade South By, for example. Sure they were there this year, though gone seemed to be the throngs of bird, bat, owl and other cartoon-creature covered busses tooling around downtown Austin blasting music from loudspeakers, dispensing free drinks and sunglasses to any ladies who hopped on, and spreading social marketing propaganda. In their place were more sophisticated opportunities for experiences.

One prime example was cab-killer upstart, Uber. While I confess that I’m a heavy user, and personal fan, of their on-demand black car service, no one can argue that free rides around downtown Austin, summoned by smartphone, are a cheap gimmick. If you’ve been to South By, you know what the transportation situation is like, especially when the rain shows up. Oh, and did I mention that Uber threw a couple of Tesla X models into the mix? With the possibility, albeit small, that you might be one of the very first and few to ride in Tesla’s newest creation, and for free, Uber shows that they understand the value of scarcity and experience. And on top of it all, they even offered super-luxury rides (e.g., Rolls Royce Phantoms) for a mere $75 an hour – an accessible price for such a plush car. You can barely take an hour long cab ride for that price.

Uber at SXSW

“Sure,” you say, “anyone with enough cash can come up with a cool marketing ploy – but what about the talks themselves? They’ve become so diluted, so basic, so myopic. I don’t want to hear another story about the miracle of a Wharton Grad and his buddy making it big with an app that leverages Facebook to deliver targeted content to millennials.” Fair enough. Here again, I saw something different this year.

The talks I attended seemed to focus on the experience economy. In particular, the case study of online luxury clothing rental service, Rent the Runway, as delivered by CEO Jennifer Hyman, showed that consumer values are changing online. “Delivering a Cinderella moment”, she said, “isn’t just about doing it quicker and cheaper – the Amazon model.” She went on to explain that online experiences can be about delivering something intangible and that every part of the transaction plays into the ideal outcome – in this case, delivering the emotional high that a woman feels when she knows that she looks amazing. She talked about the fact that complex logistics and support mechanisms are all part of the mix, but always in the name of delivering that frictionless joy.

And that is exactly what I see as a sometimes overblown, week-long tech party returning to its experience-driven roots and bringing needed attention to the rise of the experience economy. For those of us (and it’s all of us) who agonize over every detail of iPhone apps, and the hand off from our desktop experiences to phone support, express delivery and the U.S. Mail, the return of placing value on service design, and the experience design that drives it, is long overdue.

Originally posted at