The Multi-Billion Dollar Frictionless Patent

Do you want to hear the story of one of the most successful patents ever? One that is estimated to have brought in over $2.4 billion annually for the company who had it? That number doesn’t even begin to include licensing fees that the company collected from other companies who used the technology.

Here is the basic idea of the patent: a person could save their financial information online with the company’s database once, and then without having to re-enter their payment information later they would merely click “pay now” when they wanted to buy something. That’s it. To those of us reading this in 2021, that seems like pretty rudimentary stuff. But back in 1999 when the patent was allowed, it was totally unheard of. You may have already guessed who the owner of this patent was: Jeff Bezos and his new online bookstore start-up called “Amazon”.

This patent is famously referred to as the “One-Click Patent”. It has been litigated and re-examined repeatedly, but the claims that Amazon had to one-click technology held up for the entire 20-year life of the patent; and Amazon cashed in big time because of it. Amazon famously sued Barnes and Noble in 1999 over a similar technology Barnes and Noble used on its website. Barnes and Noble was forced to remove the one-click purchasing option and they simply started using a two-click process to get around it. Even the famous Steve Jobs himself had to acquiesce to the patent and license the technology from Amazon for his new app store (Licensing just means that one company or individual pays the company or individual with the patent to use the technology the patent claims).

Doesn’t this make you wonder: why does it have to be one-click? With one-click purchasing, the entire process became frictionless. Friction is a very important word here. Rather than hunting down your credit card which is probably lost in your kids laundry basket or something, you could just click a button with all your payment information already there. “Shopping cart abandonment” is a metric retailers use to get an idea of how many customers almost bought the product versus how many actually bought it. You can imagine how advantageous one-click would be to reducing shopping cart abandonment for the seller.

Friction. How can we “one-click patent” our goals and habits? Having to drive yourself to the gym is friction; perhaps a workout program at home will be easier to keep. If you’re trying to stop drinking alcohol, then the presence of alcohol in your house is friction; it will be easier to stop if there is no alcohol in your house. If you’re trying to get better sleep, perusing your phone in bed for an hour before you try to fall asleep is friction; maybe try charging your phone in the kitchen and reading on physical paper instead.

Designing your experience while trying to achieve goals is just as important as setting the goal. We need to reduce friction.