I agree with this and I think it compliments Ford, or at least my interpretation.
I've put a fair share of holes in walls and also fastened plenty of material together. No one would buy a drill for one hole in a wall but there is a massive amount of leverage in being able to put thousands in quickly, ect.
> don't confuse the tool with the goal.
I think this is the lens/acid test. For your correlation above, it sounds like it was harder to sell them automated agreements than it was for them to manually produce them. Or at least, the perceived opportunity cost was higher and the cost to educate them otherwise was higher than the authors profit marg.
edit: just looked at your profile; very nice array of quotes you have.
I suspect you would get killed here. You are trying to change user behavior and as noted they don't have short term benefits. This pricing model disincentivises a company because it costs them money up front each time they try it and not showing and value.
Essentially they need to add an extra step to their routine & pay for the lack of convenience. This was likened to ecercise by the author. However, if you expect anyone without a top down authority (also mentioned) to do something that is harder & more expensive, they won't. It's why gym memberships bought on Jan 1 are rarely renewed in Feb or March
edit: so you are correct, paying for what you use is logical especially vs the value. Here it sounded like the customer has high value, but we discount it steeply for lack of immeadiacy.
> if i'dve asked people what they wanted, they'd have said faster horses.
is applicable here, much more so than in the battlecries of every company making something no one wants for some hypothetical market that doesn't exist.
While I don't understand the author's biz/space enough to comment situationally, this is a key insight. People almost always miss this. Users want to get to places much faster, and much more confortably in the Ford example. They speak in solutions and it is an entrepreneurs job to translate this into problems, rank them, and provide actionable responses.
The flaw I believe in your example, could be a few things. possibly if you are paid by a customer directly & are more a consultant/contractor than a SaaS provider, well, that's how you get paid. However, generalizing about a feature, especially without behavioural feedback is dangerous. if it is very easy to do, of course do it. However, the risk of a feature is some subset of:
* value to customer
* conviction/data in that value prop. & feedback
* difficulty to achieve
* is it replicable. how valuable is this to all my customers? is it very valuable to a few, or semi-valuable to many/all.
This is again, highest level, even in the last point above you can see the thread fan out.
So, again, i am bot super familiar with the authors company but I agree wholeheartedly with his process of decision making. Consider it is possible that either etsy was a big client, thus worth retaining for markwt goodwill & rev, or that it was quite easy to open an endpoint to data you already had, and thus doesn't discount this methodology
> If you're mad about the ebook market concentrating on Amazon, you should be absolutely furious at Apple over agency pricing.
Pretty consistently, when I am not fucking about on here and trying to have a good sense of humor about various absurdities that we have all come to accept, I make the same broad points. So no I don't actually care that that amazon has the ebook market, and it wasn't encouraging that if Apple hadn't raised prices Google was waiting right there. My point was that Apple acted quite rationally however the system is unpredictable and rife with power imbalance. Which underscores the point I always make which is that; in this example, Amazon had a massive power imbalance.
However, I also find it dosconcerting that Apple has end to end control over an entire ecosystem, albeit smaller than Amazon and Google.
I Also find it disconcerting that almost exclusive access to internet and telephone communications is owned by 4 companies.
I find it slightly absurd that one company controls almost exclusively the english language interface to the internet, owning operating systems, hardware, isps, DNS, browser, search, most code cdns ect.
Amazon owns most of the underlying hardware developers build on, by some counts they have more servers than google. They own distribution of media both print and AV, as well as distribution of physical goods, which they service themselves and soon they will move deeper into transmission with automated freight movement of goods. Given that most manufacturing will go completely automated soon, Amazon will have the ability to operate the entire value chain almost completely aurtomated.
Apple owns cellphones, router, laptops, music distribution, video distribution, controls a nontrivial sofgtware marketplace and has tons of other vertically and horizontally integrated side services.
> Instead, agency pricing more-or-less froze the ebook market starting in 2010 until 2013.
Agency pricing has caused a systemic underinvestkment in infrastructure at a time when it is more dire than ever. So while "encouraging many independent authors to be Kindle-only and so on" may be a problem, it has likley been solved by the millions of voicing empowered by the internet.
so, i am trying to simply interject that we have maybe one more chance to fix it, and I should try and encvourage people to think at a higher level (not talking down to you as you seem to have more domain expertise) but in this sense it is kind of like a fractal pattern right, this small issue of content distribution and collusion, is actually a very tiny symptom of a very big content distribution and high concentration problem set.
> The only "reason" why temporary price dumping is bad, is if it is being done for the purpose of raising the price in the future.
> Amazon wins by having prices as low as possible, and beating everyone else at the cost cutting game.
Amazon wins by dumping, making it very unattractive and then keeping prices low/stabile but using its bargaining power and unchallenged distriubution network to negotiate lower prices than competitorsm, thus it does higher volume, pays less and controls distribution. This is not good for competition, because there is little keeping them in check.
So I think those ideas are "somewhat" at odds.
Price dumping is often embargoed (thou difficult to detect) because short term it is good for the consumer, but bad for the competition. The idea is that you gain control and then you can use that to either keep market share or to raise prices.
largely, dumping is unpredictable. It can backfire, thus great for the market, a competitor goes down and subsidizes many consumers with goods. Or it can buy repreive, in that short term they recover the losses but competitionb moves in, or they can get in at the beginning of a trend and prevent others from getting in.
China did this with solar panels for a while and effectively subsidized solar for the world. It is "good" for someone most of the time, it is usually unclear who.
In a scenario where the person dumping also owns most of the distribution of goods and the infrastructure running most applications, local delivery networks, and content distribution networks like streasming video, music and devices to consume biooks and other media, it isn't great. This goes for apple and amazon.
Look, im not making the claim it was a shining moment of free market triumph. However, prices are just information and witnout enough data, you don't know what the price is.
So you have amazon selling at 9.99 and a fragmented group trying to compete. They owned, by their own calculatoions, 70-80% AFTER the ipad launched.
So you have a single supply channel dictating price. Apple exploited it the other way, increasing prices collectively so amazon didnt blacklist phblishers.
Its not black and white. You have a monopoly and the kartel formed to fight it.
It is pretty laughable that they were fined 450m being anticompetitive, when they actually introduced competition.
So both companies were acting in their iwn best interest. I would almost argue thus is pure capitLism because the only way to offset a monopoly is collude or you will get blacklisted. This is gametheory, and while the optimal societal outcome of this situation may have been Apple accepting a lower price, if you garuntee cooperation you get higher value.
Obviously, the optinal societal utility would be many many distributers giving markets the ability to dictate price instead of the opposite,
Given the situation, they had no choice, and frankly society ended up bettet off as eventually more player were able to compete (although the market would be different with many players and it will necer have that )
Amazon controlled 90% of the market share and was price dumping. It is dubious that they colluded too much, as they were buying from the sellers, which is literally how markets work.
Amazon, and I am not joking, in an article called Amazon: We have 70-80 percent of e-book market[0] through there kindle chief makes that claim.
Also credit suisse released a report prior claiming 90%[1] in the wall street journal.
This article itself also links to 5 publishers in a signed statement within an amicus brief claiming these figures and that dumping was taking place. thus prices set above that of a 90% market concentration single actor, make it reasonable to assume that increasing prices is infact the market rate.
Steve Jobs was a dick, maybe they were anti-competitive. I doubt they made 450million charging more than the market leader...
I was claiming you didn't read the bloody article mate. I am not trying to be rude, but if a sworn statement by the people selling books[0], who have the receipts, to the highest court in the land doesn't convince you Amazon itself stated similar numbers on the record.
Amazon head of kindle saying apple is overstating market share, we have at least 70-80 percent, "[apple's] math doesn't add up", in the cnet article Amazon; We have 70-80 percent of the e-book market"[1]
Crediit Suisse also released a famous report with the 90% figure, which was discussed by the wallstreet journal[2]. The daily finance also stated that figure citing interviews as well as the CS report.
I was just having a bit of a laugh at the absurdity of charging them with anti-competitive tactics, when in fact they introduced competition in a welkl agreed upon narrative that is quite literally the definition of a monopoly. It can also be evidenced buy the fact that, they engaged heavily in dumping and while not 100% proveable, the booksellers were aware of their price structure. Knowing that dumping, being charachterized by an outsized market actor selling significant capacity below market value to drive competition out of business, we can retroactively assume with some confidence that booksellers claims of dumping, followed by a steep price reduction and numerous inbdustry actors going out of business could be a decent heuristic to assdume they are correct.
Once again, my point isn't whether Apple was right or wrong, but that it is difficult to assume a rational body would conclude given this information, that Apple had inflicted 450M worth of damage, and also ignore the tight concentration of supply Amazon was allowed to control.
The second point I will now make, which I make here daily now, is that these dynamics are dangerous and we need to be careful about reliance on a single entity as it can be damaging. It is unpredicatable how the laws are enforced, granting a monopoly to one company who uses it to upsell ads and tracking software and fining them under 1/10th of the CEOs annual pay for a 4 year offense, and the implication that a player with 3/4ths of the market control(likely more by their own admission) was allowed to manipulate prices while 2 companies buying and selling goods, negotiated the price they were willing to sell to the market, were served a 450m fine for anti competitive dealings.
I am very concerned about how things are playing out. And I hope others are as well.
edit: further youyr original posit:
>"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
I wanted to point out that while if we assume Smith to be correct here, it is irrelevent. You seem to raise the point that 2 people of the same industry meeting to discuss business is bad for competition. However, Apple a buyer/market maker meeting with suppliers is what one would expect, as that is how markets work. Maybe they were nefarious, but meeting with buyers and negotiating the terms of a new platform and price structure seem fairly in line with what I would expect to find in the economy. If the publishers themselves all met in secret and withheld supply then I don't see how, even if complicit, it would solely fall on apple & if they did in fact do that, Amazon had secured the rights, so Apple would actually be worse off having colluded & agreed to a higher price, while a market leading competitor enjoyed a better rate.
edit: just to be clear, that is a link to this thread, which references the article we are discussing. That article includes a link to the amicus brief filed on Apples behalf from the publishers making that exact claim to the Supreme Court.
It is pretty relevent. I am not being sarcastic here, I will elaborate. Outside of the 1970s in switzerland when an influx of capital poured out of Russia into banking safe havens, there has not been many negative interest rates. So typically to get out of a poor economy you employ a range of tactics. Monetary policy being a main one. Of course we can't do that as we can not really lower interest rates as they are essentially 0. This is also a component of the risk free rate, which is essentially negative.
Fiscal policy being the other one. However, we don't have money, and since the amount of money in the economy grows exponentially, when you have outsize lending the amount of money gets ratcheted the fuck up.
So you have no more levers to pull here.
Russia, I beleive their equivalent of secretary of state, that there was "a new cold war", just google that phrase. Also, the people Motherfucking Security Board of the Bulletin of Economic Scientists[0] have set the doomsday clock the closest to midnight it has ever been. recently? no, ever.
No one is talking about the ban China just laid down on any foreign entity competing in technology. Happens on Thursday. In a loose interpretation, it would only be all media companies, anyone with published works and media, and any imagery. Darker interpretations have it being interpreted as "publishing" being the app store. However, it is all based on a single reuters qoute and the law which has been published, which you can look up.
Then you have US banning china from selling their flagship phone (happened today/yesterday).
Unemployment is insane.
At this point a rougue agency has near complete control over the entire worlds communications.
N. Korea is firing nukes and shit, but honestly that isn't even a big deal at this point.
We created a fucking rogue state in the middle east, and hundreds of thousands of people are fucking stampeding through the world to get out of there.
Stock market is "up" from the 3.3 TRILLION dollar nose dive the world markets took in the opening 2 months of trading.
According to 538[1] it looks like we have effectively grasped this as a nation, and have identified the economy and a poorly run government as the top 2 issues.
Now I am about as cynical as they come. However, I am a fucking patriot even with my fairly contrarian views. I refuse to believe that Donald Trump as a person is how the nation succeeds, and I hope most people believe this as well. HOWEVER, the verizon/apple thing (btw just currently going to trial to prevent the governemnt from getting the last 1% of the phone) is indicative of how fucked up everything is. So, yes I do think the election is fairly relevent to this. If you will notice in history, people will put up with horrible consistent conditions, but they do not fare well with uncertainty. So that was my point.
This makes limited sense. While Apple did fix prices, 90% of control of the market of a highly elastic good was controlled by a single entity engaged in dumping, which drove out all other competition. If Adam Smith believed in supply and demand (he did, he wrote the book on it) I think it would be hard to argue that responding to a monopoly with 90% distribution of a good with a price increase would make much sense. Even if we assume that it was only with many big publishers, for a subset of books, and that Barnes and Noble and Borders didn't exist and compete.
I would be interested to know if they even made that much in profit. If I could buy a car at 9 out of 10 places I go for $5000, why the fuck would I seek out the one place selling an identical car for $5300? If by chance I didn't shop around, it is likely that I am not motivated by price, and thus descrimination here has a negligible effect.
Now that all small book retailers and Borders Books have gone out of business, and Barnes and Noble is quite close we can look back with 100% certainty and say Apple's anti-competitive tactics of meeting a supply flood with increased pricing was the linchpin in their demise. As we know from history, people will hunt for a bad deal, and ruthlessly work against their own self interest even with significant friction.
Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million.
Verizon is a common carrier that manipulated the traffic in the service it provides from its government granted monopoly for 4 years and is fined 1.350M.
This is why people vote donald trump. It is the voting equivalent of YOLO. It's basically the civic equivalent of a weapon, and proving the point that he can get elected may draw into stark contrast that we might need to make a few tweaks here in there with how we operate going forward.
I've put a fair share of holes in walls and also fastened plenty of material together. No one would buy a drill for one hole in a wall but there is a massive amount of leverage in being able to put thousands in quickly, ect.
> don't confuse the tool with the goal.
I think this is the lens/acid test. For your correlation above, it sounds like it was harder to sell them automated agreements than it was for them to manually produce them. Or at least, the perceived opportunity cost was higher and the cost to educate them otherwise was higher than the authors profit marg.
edit: just looked at your profile; very nice array of quotes you have.