Signaling in Consumer Tech

One of the best books I've read in the last few years is The Elephant in the Brain by Robin Hanson and Kevin Simler.

The book makes two main arguments:

a) Most of our everyday actions can be traced back to some form of signaling or status seeking

b) Our brains deliberately hide this fact from us and others (self deception)

So we think and say that we do something for a specific reason, but in reality, there's a hidden, selfish motive: to show off and increase our social status.

Let's take a closer look at signaling. The way I see it, signaling can be broken down into different components:

• Signal Message
• Signal Distribution
• Signal Amplification

To better illustrate what I mean let's take a pair of sneakers as an example.

The first component is what I call the signal message. This is whatever hidden subtext you are trying to convey. In the case of our sneakers this is probably something along the lines of "I can afford to spend $100 on a pair of shoes" and "I live an active, healthy lifestyle".

Digital products have one crucial disadvantage over atom-based products and services: intangibility. Apps live on your phone or computer. No one can see them except for you.

The signal message of a fitness app is the same as that of a gym membership or athletic wear (strength & fitness display), but the signal is much weaker because you can't distribute it to anyone.

I believe that this is the main reason why consumer software companies have a harder time monetizing than their physical counterparts.

"Almost everything has a signaling component — we are just not aware of it. In fact, well over 90 percent of human behavior can be explained by signaling."

Whether or not you agree with that exact number, I think it's an interesting thought experiment to look at a specific behavior and think about what the hidden signaling subtext might be.

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