Brands, paralysis and value

Behavioral economists have done a lot of research on decision-making, and one of the themes they have isolated is that having too many choices makes it harder for people to make decisions. I've seen the most work on this theme around investment decisions, specifically the number of investment options that should be made available to retirement plans. Fewer is better, and some 401ks now have as few as 5 options, plus target date funds.

I think the principal holds true in life in general: faced with too many options, we get overwhelmed. My mind races to the stories of people leaving the Soviet Union for the first time back in the 80s and 90s, coming into western stores, especially in the United States, and freaking out over the surfeit of options for everything. We all have a little bit of that, and the internet makes it worse. So we revert to the tried and true, and that means brands, first and foremost. Be streamlining decision-making processes, brands help us save our most precious commodity: time, and allocate it to higher-value-add functions such as exercise, strategizing and talking to people,

This is particularly true of cheap little things, like razors. Last night Rob was showing me some Korean razors that he thinks are better than the brand I use (I'm not gonna plug here), but why should I bother looking into it, particularly since our pharmacist Steve has talked me into doubling or tripling the life of each razor cartridge by just using it longer?

Because of this, brands actually add huge value to our days by not letting us get distracted by stupid little crap. Small wonder that, when you look at world corporations, there has been an evolution from a time when the majority of their value was explained by tangible, physical assets to now, when most of the value is tied up in intangible assets like goodwill and humam capital.