Novel Vs Incremental Purchases and Cost-Benefit Model: Fancy terms that could Save you some bucks and Make your purchases smarter
I first came across these two terms: ‘Novel Upgrades’ and ‘Incremental Upgrades’ in a Tech Review video of the iPhone 11 Pro by one of my favourite YouTubers — Ali Abdaal (You can watch the review on his channel). But we are not here to discuss the iPhone 11 or 11 Pro here. We are here to talk about these Novel and Incremental Upgrades.
Most smartphone/computer/tablet companies refresh their product line every 12–18 months and once these new products launch, it’s all over the news and probably spamming your YouTube recommendations if you happen to subscribe to even two or more Tech YouTubers. Most Tech YouTubers would easily give you all the pros of the new smartphone launched making your smartphone look redundant and lousy. Felt that right? Well, so did I until I watched this Honest Philosophical tech review of Ali Abdaal.
In that video, Ali spoke about Novel Upgrades and Incremental Upgrades:
Novel Upgrades happen to be the purchases you make for the very first time in a particular aspect of life. Example: From not having a DSLR to having one. It’s like going from 0 → 1.
While Incremental Upgrades happen to be the purchases that are essentially upgrades of devices you already possess. Example: Going from iPhone X to iPhone 11 Pro. It’s like going from 1 → 1.1.
So which one is better? Well if you have the cash to burn, both are good. But if you want to limit yourself both financially and skilfully, Novel Upgrades make better choices 80% of the time. Also, incremental purchases do not excite you as much as a novel upgrade.
Rather than buying a new smartphone every 2–3 years, you invest the same money in buying a good DSLR, learn photography as a new skill (if needed), that helps you take better pictures at social functions and events. So now you have benefited both financially and skilfully. Or rather than buying a newer and better Smartwatch, you invest the money in buying a new Kindle that helps you read better.
Not to say that Incremental upgrades are totally useless. You do need a new smartphone once it has reached its performance peak and only starts declining from thereafter to affect your productivity negatively. Or if you have exhausted all Novel upgrades and are left with just incremental upgrades to make(very rarely though).
I usually tend to make a Cost-Benefit Model to test if I actually need an Incremental Upgrade in my life. A Cost-Benefit model is something I read about in the book SuperThinking. It’s a slightly better version of the pro-con list but gives better results.
In a cost-benefit model, the idea is to list your pros and cons as usual and then put them on a number line scale which ranges from -10 to +10 with -10 to 0 being the negative aspects scale and 0 to +10 being the positive aspect scale. Once you lay them down on this number line, you get a better perspective of the decision you are about to make. Finally by adding up the costs, you get an idea of where the benefits lie on the scale (positive or negative side).
Here is how I would visualize the model for ‘deciding on buying a new smartphone’ while listing the pros and cons of my current smartphone:
Since it has landed on the positive scale and is well above +2, I might wait for a few more months (or get its battery replaced if its degraded) instead of rushing to the stores now. I could instead make a novel purchase or simply save for the incremental purchase I would be making later for the new phone.
If your Total on the scale lands on the negative side, you should think about making the purchase even if it is incremental rather than novel as thought could harm your productivity. However, you could also weigh it against other incremental upgrades that could be more important at the moment for you.
Takeaway: To break out from the loop of buying new products (usually electronics) whenever they are out in the market, it is essential to understand the concept of Novel Vs Incremental upgrades. Finally weigh your need for an incremental upgrade on a cost-benefit model to help your decision process.
~ Aditya Darekar