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A thread on Kunal Shah's ( @kunalb11 ) Delta 4 theory 
"Unlike other animals, humans don't have to depend on evolution to become more efficient", says Kunal Shah as he starts explaining his Delta 4 theory. This is the reason we advance at astonishing rates when compared to other animals.
The objective of every founder is moving humans from a less efficient state to a more efficient state. If they manage to do this while ensuring that there is no return to the original inefficient state, they effectively unlock the 'Pot of Gold'.
But the main question is, how do you know if your company/product has the potential to unlock this Pot of Gold because so many companies try to solve for an inefficiency and most of them fail.
Delta 4 theory is a framework for self assessment that helps you validate whether your idea has the potential for wealth creation or whether it will just be a waste of time and money.
It's simple. Take 2 states; State A (inefficient state) and State B (more efficient state). Now ask, "On a scale of 1-10 (10 being highest) how much would you rate the efficiency of both the states." For eg, State A is 'Booking a Meru cab' and State B is ' Booking a cab via Uber'
You will get a lot of different responses from different customer personas.
A-3; B-8
A-2; B-6
....
If you take all the difference in scores and average them out you will get a final average difference score.
If this value > 4 you have a Delta 4 product.
A-3; B-8
A-2; B-6
....
If you take all the difference in scores and average them out you will get a final average difference score.
If this value > 4 you have a Delta 4 product.
What does it mean to have a Delta 4 product? It serves 3 purposes:
1. It makes your product state irreversible : People will not move back to inefficient State A after moving to State B.
1. It makes your product state irreversible : People will not move back to inefficient State A after moving to State B.
2. It gives you a Unique Bragworthy Proposition (UBP): Word of mouth marketing would help you get the scale you need and you wouldn't need to spend hefty amounts on marketing. Eg. Truecaller is a product that most of us downloaded because someone we know bragged about its value.
3. High Tolerance : Even if customers face issues with your product they will be tolerant and will not shift back immediately to State A.
But there are places where despite having a Delta 4 product, other constraints would lead to the product's failure
1. Affordability: Trains vs Flights. Though flights are a lot more efficient than trains, the costs are high and hence this state is reversible
1. Affordability: Trains vs Flights. Though flights are a lot more efficient than trains, the costs are high and hence this state is reversible
2. Readiness: If you build an app like Uber but nobody has smartphones, then the app is way ahead of its time though it's a Delta 4 product.
3. Learning Efforts: If the product has a steep learning curve, people will not abandon their current state for a new state. Example: Since most CA's were trained on Tally they will not want to move to a better software.
4. Configurations: If an incredible amount of time and effort was spent on micro-configurations on a previous state to make the system personalised for you, then there will be a lot of inertia to move to the new state. For example, replacing your old maid with a new maid.
5. Collective Participation: If the previous state has network effects then moving to the new state is difficult. Example, moving people away from Whatsapp onto a better messaging product is very difficult.
6. Branded Lanes/verbs: When the previous state is used as a verb then the new state will face very tough competition. Example: "Google this" or "Let's photoshop this"
Can you fake a high delta 4 or hack a high UBP? Yes you can and there are 3 ways of doing this
1. Influential Brands as Customers: If you are able to convince large brands to use your product then the smaller companies in the same vertical follow suite.
2. Piggyback a Delta 4 product: Create complimentary products to Delta 4 products. For example, glasses are a Delta 4 product. You can create a cleaning liquid for glasses. But you need to realise that this is not sustainable once the new Delta 4 product (Lasik) becomes cheaper
3. Fake Inefficiencies: Nobody cared about organic food until companies created a fake inefficiency and started selling health benefits and fear.
To conclude Kunal says
To conclude Kunal says
"I have seen engineers jump straight into coding without ever speaking to consumers." If you are going to invest years on an idea then why not spend some time validating it. "If you spend a lot of time on something it automatically leads to confirmation bias and makes you blind"
Founders have so much to share with us because they have seen both highs and lows, firsthand. @TheProductfolks is making these amazing insights accessible to everyone with Founder Stories. I am super excited to announce our next event
We are hosting @paraschopra, Founder & Chairman, @wingify to talk about his journey of bootstrapping his way to build a multimillion dollar business. https://insider.in/cognitive-traps-how-to-avoid-them-while-building-products-the-product-folks-oct17-2020/event
Paras's talk will focus on 'Cognitive Traps : How to avoid them while Building Products'. This talk will help you with better user interviews, create strong moats, design beautiful products and so on. Register now before the seats run out:
You can refer to this link for the complete video based on which this thread was written -
