Aaron Shapiro

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Reducing Friction

July 5, 2020

It’s been widely discussed that Covid has fast-forwarded the internet and business to the year 2030. All of a sudden, the future where all commerce is ecommerce, all media is streaming media and all work is remote work, is now a reality.

What we’re seeing is an acceleration of a trend that’s been the hallmark of economic progress for ages: the removal of friction in our society.

‘Friction’, according to Google’s dictionary, is the resistance that one surface or object encounters when moving over another. In economic terms, we can think of friction in the same manner: the things that get in the way of getting something done.

To take an extreme case: once upon a time, prehistoric people took a big job getting food; they had to wander around hunting and gathering. Then agriculture was invented along with the novel idea that we’d didn’t have to go to the food; we could remove friction by growing it ourselves. Last summer I visited Pompeii, and what was most striking was seeing how much friction was removed at height of the Roman Era: grains were readily stored if weather created friction in producing crops (hence “stores”), and there was no need to cook; remove that friction by visiting a restaurant. Which brings us to 2030 (aka post-Covid 2020), where the norm is food delivered to you, no visiting stores or restaurants required. The ultimate in frictionless consumption.

Much of the internet era has the story of removing fiction from more and more of our life. Countless businesses have been created by using digital to remove friction: keeping up with friends thanks to Facebook, finding a partner thanks to Tinder, buying a book thanks to Amazon, finding a job thanks to LinkedIn.

But despite all recent innovations, much of the world has remained stubbornly analog. Pre-Covid, ecommerce was still less than 10% of all retail sales. Covid did a good job of increasing the friction associated with analog transactions (it’s not just tedious to go to a store; now it is dangerous!), making the switch to digital alternative all the more attractive. When the benefits of making the switch (no health risk) exceeds switching costs (more uncertainty about what I’m buying), we all jump aboard to the new world of lower-friction solutions.

For this reason, it’s no surprise that recent and upcoming IPOs are case studies in friction removal as it relates to consumer purchases. Pre-Covid, buying a car was rife with friction. You have to research the car to buy, find the exact car to buy, go to the dealer, negotiate a price, sign a lot of paperwork and then often come back later to pick it up the car once it was prepped. Enter Vroom, which lets you buy a car online, delivered to your door. No haggling, no paperwork, no dealer to suffer through. Same story with Lemonade for home insurance.

Accelerate the removal of friction across other industries and the result is Netflix, Zoom and Amazon winning at the expense of movie theaters, in-person meetings and shopping malls.

One day Covid will be over. The world may one day become as safe as 2019, but we’re unlikely to revert to it. Sure, some things will revert to in-person because they can be more intimate and, well, fun. But the march towards a more frictionless world will continue unabated. Until Star Trek’s Replicator is invented and whatever we can think of immediately appears in front of us, we will continue to invent and innovate in search of a more frictionless world.