The Value of Aethetics

I picked up Virginia Postrel's new book, The Substance of Style this weekend, and am nearly finished with it. Since there was quite a buzz about it in the blogosphere, I thought I would give my two cents.

The book is good, but I wouldn't recommend it unless you are interested in the subject matter. It isn't one of those slap-you-in-your-face-and-cause-some-cognitive-dissonance books that everyone should read. But it is well researched and well written. The crux of it is that there is real value in aesthetics. Postrel gives the example repeatedly of Motorola releasing a new pager that was funcitonally identical to the old one, only it was green instead of black – and it cost $15 more.

Some people think that functionality is all that matters, or should matter, and that aesthetics are a waste of time and money. I have to admit that back when I was more of an engineer than a businesspundit, I agreed with that. But I began to realize several years ago that whether right or not, people judge other people (and things) on their visual appeal. Look at what Rachel Lucas posted just today:

I'm not sure 'monstrosity' is the right word – there's nothing actully unpleasant about The Great Indoors. The main problem is that they have ungodly numbers of things to buy, and I want to buy them all. I want every single thing in the entire KitchenAid section. Every single thing, that's right. Including all the stuff I will never use. KitchenAid makes such beautiful products, dammit! I want to have them all just so I can look at them and say oooooh, pretty.

I think her experience is common.

All this aesthetic value stuff is just making economics that much of a "softer" science, a trend that began with all the behavioral economics studies done over the last few years. Intangible value isn't new, as people like Warren Buffett have talked about the power of branding, and why Coca-Cola, for instance, would have considerable value even without any hard assets. But aesthetic value is a different kind of intangible, and companies should now ask themselves how they can increase value by paying more attention to aesthetics. Technology has made it increasingly difficult to compete on price or quality, so design is the next competitive advantage. I remember in business school we debated whether business was an art or a science. I always leaned towards science, but it seems it is becoming more of an art all the time.