In the beginning, nearly every successful company appears obsessed with the customer.
The founders answer complaints personally. Refunds are easy. Prices are subsidized. Products are changed quickly. Employees study every interaction. The customer is discussed constantly because the company does not yet understand the customer.
The relationship is new.
And novelty is full of surprise.
This is true beyond business. A new job captures attention. A new route to work captures attention. A new relationship captures attention. A new diet captures attention. In each case, Expectation is still immature. The pattern has not yet been absorbed.
In the Reality Equation:
R = A / E
Reality is the relationship between Actual and Expectation.
When we take the natural logarithm of Reality:
S = ln(R)
we receive a measure of surprise, information, and attention.
When Actual closely matches Expectation, R approaches 1. The natural logarithm approaches zero. Very little new information is being generated.
When Actual departs from Expectation, the event becomes informative. The farther the value of ln(R) is from zero, the stronger the claim on attention.
Attention is therefore not simply something people decide to give.
Attention is stolen.
Why New Companies Love Customers
A young company pays attention to customers because customers are surprising.
The company does not yet know who will buy, what they will pay, what they will complain about, what they will recommend, or what will cause them to leave.
Every customer produces information.
Every purchase is meaningful.
Every abandoned transaction raises a question.
Every complaint reveals something the company did not know.
This is why early-stage companies often appear unusually generous and responsive. They may subsidize the service, absorb losses, issue immediate refunds, and redesign the product around a small number of observations.
The customer is not merely producing revenue.
The customer is teaching the company how the relationship works.
Consider the early experience of Uber.
Before ride-hailing applications, a customer might call a taxi dispatcher, wait without reliable information, call again, and receive an estimate that may or may not have been true.
Then Uber produced a radically different experience.
The customer could see the driver as a dot on a map. The arrival time was visible. The route was visible. Payment happened automatically. The price was often comparable to or lower than the traditional taxi.
The new Actual differed sharply from the customer’s inherited Expectation.
That difference created surprise.
Surprise created attention.
Attention produced migration.
The same basic pattern appeared with Amazon, Airbnb, DoorDash, and many other disruptors. They did not begin by extracting the maximum amount of money from the relationship. They began by making the relationship sufficiently different that customers moved toward them.
The customer was the most informative part of the system.
Therefore, the customer received the attention.
Success Removes Surprise
Then the company succeeds.
It acquires thousands, millions, or hundreds of millions of customers. It learns when they purchase, how they behave, what they tolerate, and what causes them to leave.
The relationship becomes increasingly predictable.
The company develops customer segments, algorithms, service scripts, policies, dashboards, recommendation systems, and automated processes. What once required conscious attention becomes organizational habit.
This is what successful systems do.
They absorb predictable activity.
Automation and predictability belong together. A company cannot automate what remains completely surprising. It must first recognize a pattern, constrain the variation, and form a sufficiently reliable expectation.
Once the pattern is reliable, it can be handed to software, policy, routine, or process.
The customer is still being served.
But the customer is producing less surprise.
Actual and Expectation are beginning to align.
R approaches 1.
The informational signal weakens.
The customer does not become less important in any moral or economic sense. The customer simply becomes less capable of stealing conscious attention.
This is the hidden danger inside success.
The better a company becomes at predicting its customer, the less attention the customer naturally commands.
The Product Disappears Too
The same thing happens to the product.
At first, the product itself is full of uncertainty. Can the company manufacture it? Will customers understand it? What features matter? What price works? How should it be distributed?
Over time, those questions become increasingly settled.
The car can be manufactured.
The meal can be delivered.
The room can be booked.
The software can be installed.
The payment can be processed.
The product becomes operationally predictable.
It is absorbed into the organization’s subconscious machinery.
The company does not stop producing it. In many cases, the company produces it more reliably and efficiently than ever.
But the product is no longer where the greatest surprise resides.
Attention begins moving elsewhere.
Financialization Submits the Higher Bid
This is where financialization enters.
Financialization is often described as a conscious decision to prioritize money, shareholders, or profit over customers and products.
That explanation gives people too much authorship.
The people inside the company do not stand outside the process and calmly decide to abandon the customer.
Something else begins outbidding the customer.
The idea of financialization remains rich in unexplored conditions.
The car itself may be predictable. But financing the car opens another relationship.
Insurance opens another.
The extended warranty opens another.
The maintenance plan opens another.
Leasing opens another.
Subscriptions open another.
Data opens another.
Fees open another.
The core transaction may be mature, but the financial perimeter around the transaction remains full of novelty.
That novelty generates surprise.
Surprise generates information.
Information captures attention.
Financialization does not win because an executive decides that money is morally superior to the customer.
It wins because it submits the higher informational bid.
Why Cash Is a Problem
Consider the simple act of buying a car with cash.
The customer gives the dealer money. The dealer gives the customer the car. The transaction is largely complete.
Completion limits the relationship.
Financing keeps it open.
Once the transaction is extended through time, additional conditions appear. There can be interest, fees, insurance requirements, servicing, refinancing, default risk, repossession, securitization, and secondary markets.
The automobile may be sold once.
The financial relationship can continue producing money for years.
This is why the financialized system tends to treat cash as an inferior answer. The cash buyer closes a relationship that could otherwise remain economically active.
The system may present financing as prudent, sophisticated, or efficient. The customer may be told to preserve liquidity, take advantage of a low rate, or invest the cash elsewhere.
Some of those arguments may be reasonable for a particular buyer.
But the larger pattern is not difficult to see.
Cash completes.
Financing extends.
Financialization is attracted to the unfinished transaction because the unfinished transaction contains more conditions that can be monetized.
No One Person Invents the Movement
It is tempting to describe this process by saying that someone realizes the company can make more money from financing than from the car.
But that still places the human being in the wrong position.
Ideas have people.
People do not have ideas.
The idea of financialization captures attention because it remains more surprising than the increasingly predictable customer and product.
Once it captures attention, it recruits actualizers.
One person structures a loan.
Another develops an insurance product.
Another designs a subscription.
Another identifies a fee.
Another constructs a data model.
Another finds a way to turn ownership into access.
Each person appears to be making an independent decision. Each may believe he or she is solving a local business problem.
But together, they are actualizing the same idea.
No one needs to understand the whole movement.
No meeting needs to occur in which everyone agrees to replace the customer with financialization.
The organization’s attention simply begins clustering around the higher-surprise conditions.
Talent moves there.
Capital moves there.
Technology moves there.
Measurement moves there.
Executive interest moves there.
Eventually, the company appears to care more about the financing than the car, the subscription than the software, the fees than the service, or the data than the customer.
That appearance is real.
But it is not best explained as a conscious choice.
Financialization has outbid the customer and the product.
The Product Becomes the Entry Point
Once financialization captures the organization, the core product begins changing roles.
The product is no longer only the thing being sold.
It becomes the condition that allows additional monetization to happen.
The printer creates the ink relationship.
The phone creates the service, storage, insurance, application, and data relationships.
The airline ticket creates the baggage, seat selection, credit card, insurance, lounge, and loyalty relationships.
The meal-delivery order creates delivery fees, service fees, subscriptions, restaurant commissions, advertising, and data.
The automobile creates financing, insurance, maintenance, warranties, subscriptions, and continuing payments.
The product becomes an entry point.
The customer thinks the transaction is about the product.
The financialized organization increasingly experiences the product as customer acquisition.
This does not mean the product becomes irrelevant. It remains the necessary condition that brings the human being into the system.
But attention moves toward the expanding network of relationships that can be built around it.
The car is still there.
It is simply no longer the whole product.
Subscription Prevents Completion
Subscription is one of financialization’s clearest forms because it changes the temporal structure of the transaction.
A purchase ends.
A subscription continues.
Ownership allows the customer to complete the exchange. Subscription preserves the relationship as an ongoing condition.
The company no longer has to persuade the customer to make a new purchase each time. Payment continues until the relationship is actively interrupted.
This is extraordinarily attractive to financialization.
The product becomes less important than the continuation of access.
The central question shifts from:
How do we make the best product?
to:
How do we preserve the payment relationship?
Again, no one person needs to choose this transformation in its entirety.
The idea of recurring revenue produces more surprise than the mature product. It captures attention. People then actualize the conditions it requires.
Features become tiers.
Ownership becomes access.
Access becomes recurring payment.
Recurring payment becomes predictable revenue.
The relationship remains open.
Why Customer Service Cannot Fix It
Companies often sense that attention has migrated and respond by announcing a renewed commitment to the customer.
They create customer experience departments, loyalty programs, service initiatives, surveys, and mission statements.
These efforts may help, but they are trying to overcome a mathematical condition with language.
The customer may be declared important.
Attention still goes to the strongest bid.
A mature customer relationship may produce very little surprise. A new form of financing, insurance, subscription, or data monetization may produce much more.
The organization will naturally move toward the more informative condition.
This is why sincere leaders can insist that the company is customer-centered while the customer experience continues deteriorating.
Their values may not have changed.
Their attention has.
The true attention architecture of a company is not revealed by its mission statement. It is revealed by what interrupts the meeting, attracts the best people, receives investment, and generates organizational excitement.
That is where the strongest bid is coming from.
Capitalism Does Not Decide
It is common to speak as though capitalism has preferences.
Capitalism chooses profit.
Capitalism abandons the customer.
Capitalism invents fees.
Capitalism converts everything into a subscription.
But these statements can make the system sound more deliberate than it is.
The deeper movement is attentional.
A product begins as surprising.
The customer begins as surprising.
The company learns both.
Predictability increases.
Automation follows.
Surprise declines.
Attention becomes available to be stolen by another idea.
Financialization submits the higher bid because it continues producing new conditions around an already predictable product and customer relationship.
The company does not necessarily choose financialization.
Financialization captures the company.
The Disruptor’s Fate
This is why disruptors often begin by serving customers extraordinarily well and later resemble the companies they replaced.
The pattern is not primarily hypocrisy.
It is not simply that the founders became greedy.
The disruptor began with an unfamiliar customer and an unresolved product. Both generated enormous amounts of information.
After scale, the customer becomes modeled.
The product becomes routinized.
The service becomes automated.
The original surprise is absorbed.
Financialization remains unfinished.
It therefore captures attention.
The disruptor does not wake up one morning and decide to become the incumbent.
The idea that once organized the company around customer service loses its attentional advantage.
Another idea outbids it.
Financialization Has People
The deepest mistake is to imagine that people first invent financialization and then impose it upon the economy.
The causal direction is reversed.
The idea of financialization has people.
It recruits bankers, engineers, marketers, lawyers, analysts, executives, designers, and customers. Each becomes an actualizer of some portion of the idea.
Together they create financing, insurance, subscriptions, fees, warranties, data markets, and recurring payment structures.
From the human frame, these appear to be separate innovations.
From the deeper frame, they are expressions of one attentional victory.
The customer and product became predictable.
Financialization remained surprising.
The higher bid won.
And attention, as always, was stolen.