The Cost of Free Doughnuts: 70 Years of Regret(npr.org)
npr.org
The Cost of Free Doughnuts: 70 Years of Regret
https://www.npr.org/sections/money/2012/07/13/156737801/the-cost-of-free-doughnuts-70-years-of-regret
316 comments
I have a similar story. Year is 2014 and client was using a very specific payment processor because the client was part of UK government and credit card processing was to be done using only that processor - you know, politics and stuff when dealing with government.
So the payment processor, after absorbing a good chunk of this organization became a behemoth, with a lot of political power and overnight they decided to charge additional license fees if you are throwing more then 5 connections/second from same IP to be processed.
Of course the client was upset and asked me if there is a solution before shelling what was possible more then a few million pounds (GBP, not the weight) per year in those fees. My solution? Made them just increase their pool of IP addresses from internet provider and additionally made an intermediate proxy which had the job to gather user requests and spread them to up of 4 requests/second to said processor. When waiting for your card to be processed usually the end user doesn't mind waiting extra 10 seconds, seconds that gave my proxy plenty of time to balance the requests. AFAIK it works without hiccups to this day. And of course, client only thanked me like government thanks to medics in COVID nowadays, all talk and no extra dime (apart from what we agreed upon). Oh well, I take pride in a job well done.
So the payment processor, after absorbing a good chunk of this organization became a behemoth, with a lot of political power and overnight they decided to charge additional license fees if you are throwing more then 5 connections/second from same IP to be processed.
Of course the client was upset and asked me if there is a solution before shelling what was possible more then a few million pounds (GBP, not the weight) per year in those fees. My solution? Made them just increase their pool of IP addresses from internet provider and additionally made an intermediate proxy which had the job to gather user requests and spread them to up of 4 requests/second to said processor. When waiting for your card to be processed usually the end user doesn't mind waiting extra 10 seconds, seconds that gave my proxy plenty of time to balance the requests. AFAIK it works without hiccups to this day. And of course, client only thanked me like government thanks to medics in COVID nowadays, all talk and no extra dime (apart from what we agreed upon). Oh well, I take pride in a job well done.
It's a rare client who pays more than the agreed-upon price.
You're wrong. I have plenty of clients that seeing my efforts in putting that extra-mile for their project paid a bonus as well. But that's because I have good communication with them and plenty of times when they need it something fast I simply code it in front of their eyes instead of "let me see these requests and I get back to you". That's the difference between a senior developer and a junior one.
> when they need it something fast I simply code it in front of their eyes
"wow it was that easy?? I am vastly overpaying" - heard several times
"wow it was that easy?? I am vastly overpaying" - heard several times
Then you're doing it wrong. You see, this needs to be done after you already coded the application at least on 2 different versions and the codebase of it it's over 50k lines and at least a year old. Then implementing something fast it blows their mind especially when they have the proverbial carrot in that proverbial place. As for overpaying is not the case since I am paid hourly. I prefer to blow their mind from time to time in order to do repeat business instead to always be "I'll get back to you" and have them feeling that I'm procrastinating.
Well, bobbylarrybobby only said rare. Not 'non-existent'.
I suppose it depends on business size, other than being appreciative, they might also want to keep the provider happy. They want the business to keep going without a hitch and finding replacements is not always a smooth process
Would the right move have been to see the value you could give to the client, and charge more at that point for an additional service to capture some of this value?
No. At best give a hint or make a joke comparing you to those lawyers that they seen in movies winning lower prices/fees for their clients. If they get the hint and / or act accordingly it boils down to what kind of person they are, but in no way make them uncomfortable by bringing this ever again. You may lose them instead and it's preferable to do repeat business instead.
People joke developers are a very special breed of deer easy to get scared and lose focus when working. Tell you from experience, clients of developers are the same, but in their case you lose their wallet / business they bring. Personally I prefer to have long-term relation to my clients.
People joke developers are a very special breed of deer easy to get scared and lose focus when working. Tell you from experience, clients of developers are the same, but in their case you lose their wallet / business they bring. Personally I prefer to have long-term relation to my clients.
This is an important point. A lot of companies do great revenue by selling seats, but that model is obviously not always applicable. In this case, you're pointing out that the marginal utility of a product like Apollo Engine is not driven by the number of users, but by the usage. In other products, say Box or Dropbox, the marginal utility is in how many people in an org you can get using the product, not in how much you use.
Different product at my dayjob came to mind.
The license costs ~18.000€ per year. Luckily it‘s a free floating license that can be reserved by the user. So it can be fully utilised and a wider pool of users sees the benefit and the great value add of the product.
Per user licensing with that pricetag would not have gotten managerial consent
The license costs ~18.000€ per year. Luckily it‘s a free floating license that can be reserved by the user. So it can be fully utilised and a wider pool of users sees the benefit and the great value add of the product.
Per user licensing with that pricetag would not have gotten managerial consent
Your argument makes sense but not Dropbox pricing then. Their business pricing costs are per user. If they become more entrenched and valuable the more people use them, then extra users should be free, initially? (And maybe just charge for storage)
In general for SaaS, does it make sense to let customers choose between two (or more) pricing models, depending on their needs? Does this cause too much complication for the business? Curious why I haven't noticed schemes like this, other than at "enterprise" tiers where the customer is paying a lot for something closer to a custom solution and prices are negotiated.
I don't know about that. I suspect, generally speaking, per-user billing does not work for the vast majority of SaaS. It can really only work well in communication tools, where (1) most organizations receive a lot of value, (2) there's a network effect in play, and (3) expenses incurred by the provider generally correlate with the number of users. Slack. Jira. Notion. Etc.
For an APM tool like Apollo, only one of these requirements is true. It does provide a lot of value. But, there's no network effect, and their expenses do not correlate with users on the platform. That last point is the craziest one; being long-time users of Meteor and Apollo, I've always questioned the technical and executive leadership behind the Meteor Development Group (now Apollo), and they've done nothing in recent history to give faith that its a well-ran organization.
Retool (https://retool.com/) is another weird one. Amazing, amazing product. Truly transformative; what they're building there is unreal. There's a very light network effect in play, and usage may correlate better with users-in-app than it would with Apollo Engine, but charging per-user still feels weird. For them, I feel some form of bucket'ed plans, which allot X users, Y "applications", plus gated feature sets like SAML and Audit Logging, would make more sense. But, what do I know.
For an APM tool like Apollo, only one of these requirements is true. It does provide a lot of value. But, there's no network effect, and their expenses do not correlate with users on the platform. That last point is the craziest one; being long-time users of Meteor and Apollo, I've always questioned the technical and executive leadership behind the Meteor Development Group (now Apollo), and they've done nothing in recent history to give faith that its a well-ran organization.
Retool (https://retool.com/) is another weird one. Amazing, amazing product. Truly transformative; what they're building there is unreal. There's a very light network effect in play, and usage may correlate better with users-in-app than it would with Apollo Engine, but charging per-user still feels weird. For them, I feel some form of bucket'ed plans, which allot X users, Y "applications", plus gated feature sets like SAML and Audit Logging, would make more sense. But, what do I know.
Per-user billing works when the value is obvious and the price is low.
If you have a B2B SaaS product your goal should be optimizing for getting the maximum users in an organization. The more people who use your product:
- The harder it is to move off your product
- If people like the product, when they leave, they'll evangelize your product to their next employer
- It's less likely that different teams/business units/etc will try a competitor's product because there's no seats available for them (and the money is going to come out of their budget anyway--they might as well decide on the product)
- You're not causing friction for team leads who have to justify budgets every year
How many people have worked somewhere where there's 50 seats paid for and you can't go to 51 because that takes you from "Pro" to "Enterprise" at a huge jump? There's way too much shenanigans that goes on because companies make paying them money painful.
I've been working on evaluations of several enterprise developer tools in the last month and without fail all have licensing requirements that are per-seat and painful. The result has been that instead of the whole organization embracing the tool, a much smaller set of users is going to get it. The thing that's crazy is that the cost to the SaaS provider has nothing to do with the number of users.
If you have a B2B SaaS product your goal should be optimizing for getting the maximum users in an organization. The more people who use your product:
- The harder it is to move off your product
- If people like the product, when they leave, they'll evangelize your product to their next employer
- It's less likely that different teams/business units/etc will try a competitor's product because there's no seats available for them (and the money is going to come out of their budget anyway--they might as well decide on the product)
- You're not causing friction for team leads who have to justify budgets every year
How many people have worked somewhere where there's 50 seats paid for and you can't go to 51 because that takes you from "Pro" to "Enterprise" at a huge jump? There's way too much shenanigans that goes on because companies make paying them money painful.
I've been working on evaluations of several enterprise developer tools in the last month and without fail all have licensing requirements that are per-seat and painful. The result has been that instead of the whole organization embracing the tool, a much smaller set of users is going to get it. The thing that's crazy is that the cost to the SaaS provider has nothing to do with the number of users.
> The thing that's crazy is that the cost to the SaaS provider has nothing to do with the number of users.
Surely their support costs scale with the number of users? This might explain some anti-growth behaviors, support is expensive and a lot of companies struggle to get it right.
Surely their support costs scale with the number of users? This might explain some anti-growth behaviors, support is expensive and a lot of companies struggle to get it right.
Support costs has no relation to number of users. It's constant time O(10) in engineering speech.
It doesn't increase going from 100 to 500 to 2000 users, because none of these users can raise support requests to the vendor. It's only the person (or micro team) who did the product evaluation and drafted the contract who has contact to the vendor support and sales team.
It doesn't increase going from 100 to 500 to 2000 users, because none of these users can raise support requests to the vendor. It's only the person (or micro team) who did the product evaluation and drafted the contract who has contact to the vendor support and sales team.
I'm not convinced. Even if only one person at the company has access to support, he's going to have more people asking him to submit tickets about their problems when there are 2,000 users vs 100.
This doesn't happen in practice because the 1900 more employees do not know who is that person and couldn't figure it out even if their life depended on it.
If you've worked in any large organization, above one thousand employees, doesn't matter how many above really. For any specific system, there are often only 1-3 people who are familiar with it and have access and would be willing to touch it.
There will be a few tens other employees who knows about them and have half a clue what they do (typically same department or neighbors sitting nearby). If one of those hear you looking for help on X, they can direct you "oh I think it's managed by that guy". The other 1900+ can't help you.
Having been the unlucky developer at work trying to track down whom to forward a ticket through (100k employees), for both internal services and external vendors. It's not uncommon that it takes weeks to find the one person. There are quite a few I've never found.
If you've worked in any large organization, above one thousand employees, doesn't matter how many above really. For any specific system, there are often only 1-3 people who are familiar with it and have access and would be willing to touch it.
There will be a few tens other employees who knows about them and have half a clue what they do (typically same department or neighbors sitting nearby). If one of those hear you looking for help on X, they can direct you "oh I think it's managed by that guy". The other 1900+ can't help you.
Having been the unlucky developer at work trying to track down whom to forward a ticket through (100k employees), for both internal services and external vendors. It's not uncommon that it takes weeks to find the one person. There are quite a few I've never found.
Very interesting insights
This might be true in enterprise SaaS (even then it's risky) but not in small/medium business. Particularly if you are using Intercom etc in your product - it's expected that you'll allow any user to contact you.
So yes, support can grow as user counts grow. But it shouldn't be a major expense (if it is that's a product failure).
So yes, support can grow as user counts grow. But it shouldn't be a major expense (if it is that's a product failure).
In the financial systems/trading world high per-user pricing is considered normal.
Most "investment information"-type products are 25K-50K/user/year.
It's likely some people here will consider this low pricing, but it's a significantly different pricing model to the sell cheap, stack high $9 to $50/user/month type app.
Most "investment information"-type products are 25K-50K/user/year.
It's likely some people here will consider this low pricing, but it's a significantly different pricing model to the sell cheap, stack high $9 to $50/user/month type app.
That's only for products addressed to traders, a very limited audience. For example the bloomberg terminal that sits on their desk.
That pricing model is not applied to most information, like pricing data and any sort of API, because these are not about physical users. (They do charge a ton but not per user).
That pricing model is not applied to most information, like pricing data and any sort of API, because these are not about physical users. (They do charge a ton but not per user).
> That's only for products addressed to traders, a very limited audience. For example the bloomberg terminal that sits on their desk.
It's not, actually. There's a bunch of financial information products that aren't aimed at traders that are around this price point.
Pitchbook is a good example. $30k/year.
And the whole point is that it's a limited number of people. The price has to be high to make it worthwhile.
There's a bunch of markets like this where your pricing advice isn't correct and that needs to be noted.
It's not, actually. There's a bunch of financial information products that aren't aimed at traders that are around this price point.
Pitchbook is a good example. $30k/year.
And the whole point is that it's a limited number of people. The price has to be high to make it worthwhile.
There's a bunch of markets like this where your pricing advice isn't correct and that needs to be noted.
The retool pricing is so annoying! Not only is the price per-user, but we found a weird SSO bug (well, I call it a bug) where if there is a company account and a new person logs in using google, they get added to the company account. Meaning your price can go up without you explicitly inviting users.
We have ended up telling everyone to use Retool with their personal email, then if they want to add an app they made to our company account (so they can used more advanced features eg. embed mode) they should chat to one of the small number of people with access to that account. It's mega annoying and I'm sure heaps of people don't bother.
I hope the team at retool reads hacker news.
We have ended up telling everyone to use Retool with their personal email, then if they want to add an app they made to our company account (so they can used more advanced features eg. embed mode) they should chat to one of the small number of people with access to that account. It's mega annoying and I'm sure heaps of people don't bother.
I hope the team at retool reads hacker news.
Hi, I'm the founder of Retool. (I do indeed read a bit too much HN, hah.)
Thank you for the feedback — that does sound infuriating. We were optimizing for sharing of applications, but it sounds like the workflow you've adopted is really quite annoying. I'll have a think about what we could do here that might help (e.g. perhaps disabling "auto-adding" to accounts). If you have any suggestions please let me know (my email is in profile)! (I will send you an email by end of day otherwise with some thoughts...)
Thank you for the feedback — that does sound infuriating. We were optimizing for sharing of applications, but it sounds like the workflow you've adopted is really quite annoying. I'll have a think about what we could do here that might help (e.g. perhaps disabling "auto-adding" to accounts). If you have any suggestions please let me know (my email is in profile)! (I will send you an email by end of day otherwise with some thoughts...)
We view Retool as an option for building ultra lightweight apps when our normal app development flow (which is already very lightweight) is too heavy (read: costs too much in terms of developer time).
But Retool is too expensive for us, because we have many situations where we might use an app 100 times max for the life of the app, spread over a dozen or more users. Your pricing didn't work, even though your product did and I'm 100% certain you would be profitable with us as customers.
But Retool is too expensive for us, because we have many situations where we might use an app 100 times max for the life of the app, spread over a dozen or more users. Your pricing didn't work, even though your product did and I'm 100% certain you would be profitable with us as customers.
Hi, thanks for this message. I really appreciate it, since we generally don’t hear about “I didn’t buy because of the price” from the customers that already paid us, haha.
One thing we don’t advertise — we only bill for active users every month. So if 10 people login during a month, but 50 don’t, we only bill you for the 10. Do you think that’d help you guys?
(I’ll send you an email in the morning to get more feedback and see what kind of pricing would work for you. Thanks again for the feedback and for trying Retool!)
One thing we don’t advertise — we only bill for active users every month. So if 10 people login during a month, but 50 don’t, we only bill you for the 10. Do you think that’d help you guys?
(I’ll send you an email in the morning to get more feedback and see what kind of pricing would work for you. Thanks again for the feedback and for trying Retool!)
I'm a perfect Retool customer; didn't buy due to the pricing, and we spend $10K+/month on computing/service and many tens of thousands on developers, and about a dozen SaaS companies (the usual suspects and some others).
But we have a ton of part time, low hours customer support we would use with Retool and the pricing was just obscene for our use case. Would have loved to use it though!
But we have a ton of part time, low hours customer support we would use with Retool and the pricing was just obscene for our use case. Would have loved to use it though!
Hi, thank you for the kind words! (I'm the founder of Retool.)
Per-user pricing is indeed tricky for us, since people oftentimes think about the value as per-app, not per-user. But ultimately, we want to encourage, not discourage the building of apps on Retool, and our best customers view Retool as a platform for building all their internal apps. (The best customers typically build 100+ apps on Retool.) That's why we don't price per-app.
But it's possible per-user pricing also isn't optimal. If you're open to it, I'd love to bounce some ideas off of you. Do you mind sending me an email? (I can't see the one in your profile.) Thanks!
Per-user pricing is indeed tricky for us, since people oftentimes think about the value as per-app, not per-user. But ultimately, we want to encourage, not discourage the building of apps on Retool, and our best customers view Retool as a platform for building all their internal apps. (The best customers typically build 100+ apps on Retool.) That's why we don't price per-app.
But it's possible per-user pricing also isn't optimal. If you're open to it, I'd love to bounce some ideas off of you. Do you mind sending me an email? (I can't see the one in your profile.) Thanks!
It makes sense for the pricing to be aligned with what the users perceive as their usage/value. In any other shape, customers can and will adjust their usage or switch to something else.
When you start selling per-seat licenses, everyone is incentivized to reshape usage so that only one seat is needed. That one seat is used by a team member who becomes the internal expert on the service, while everyone else turns to him or her for help
When you start selling per-seat licenses, everyone is incentivized to reshape usage so that only one seat is needed. That one seat is used by a team member who becomes the internal expert on the service, while everyone else turns to him or her for help
And the product is cancelled once the employee leaves or transfers to another team.
Assuming the employee doesn't decide to abandon the product first, because who wants to be the only person on a tool that can't be used by any of your teammates or interns.
Assuming the employee doesn't decide to abandon the product first, because who wants to be the only person on a tool that can't be used by any of your teammates or interns.
That, or everyone uses the same login tied to a shared user.
Sometimes it makes to have a super complicated pricing algorithm so (usually very technical) users can tweak exactly what they do and don't want. Remember the early Heroku pricing page?
99% of the time if your pricing page doesn't have a list of prices along the top, that will be a nonstarter for a non-technical business oriented person.
99% of the time if your pricing page doesn't have a list of prices along the top, that will be a nonstarter for a non-technical business oriented person.
I think the current thinking is that you should keep your price down to 3 levels (but the same model) to keep it in one easy to read line on your landing page / price page so that potential customers will not be confused.
If you give them multiple models and ways to do things then they will have to think over what is right for them, and someone thinking over it might decide not to go with you.
On the one hand I can see the point, I hate to think too much over things. But I also hate how often products don't have a reasonable model for my use case.
If you give them multiple models and ways to do things then they will have to think over what is right for them, and someone thinking over it might decide not to go with you.
On the one hand I can see the point, I hate to think too much over things. But I also hate how often products don't have a reasonable model for my use case.
I am quite curious why business plans themselves are not generally subject to a/b testing....
Well, it would be like splitting a company into two parts competing with each other. And wouldn't necessarily determine which plan is better - maybe plan A is better on its own but was undercut by competition from plan B?
> Well, it would be like splitting a company into two parts competing with each other.
Presumably you'd have to design the A/B test around this to get much use out of it. However, when you're just starting a service and not sure how consumers will view the value of it, the benefit is obvious.
Presumably you'd have to design the A/B test around this to get much use out of it. However, when you're just starting a service and not sure how consumers will view the value of it, the benefit is obvious.
Stores do a/b testing all the time, just by varying the products they carry.
Users talk to each other and hate it.
Plus complex A/B test (eg per user vs per app billing) are complex to build and hard to get statistically significant results. You might have a perfectly reasonable SAAS business with 100 customers.
Plus complex A/B test (eg per user vs per app billing) are complex to build and hard to get statistically significant results. You might have a perfectly reasonable SAAS business with 100 customers.
Hotel and flight companies do that, it’s a terrible user experience.
That would allow the thought the upper executives aren't infallible. An upper exec can never show vulnerability, especially to something like a business plan.
And that has ripple effects if they deal with vulture capitalists as well.
And that has ripple effects if they deal with vulture capitalists as well.
Their enterprise pricing is disgustingly grandiose. At our relatively small scale (just a few tens of millions of requests per month) they wanted five figures a month after the price change.
Nope. We'll just roll our own solution.
Whichever sales and marketing guy is responsible for that atrocious pricing will ultimately be responsible for the product failing. I don't know who's going to pay those absurd prices.
Nope. We'll just roll our own solution.
Whichever sales and marketing guy is responsible for that atrocious pricing will ultimately be responsible for the product failing. I don't know who's going to pay those absurd prices.
That is crazy when APM is such a saturated market. Granted, there aren't a ton of GraphQL-focused APM tools that are automatically aware of field resolution times and such, but GraphQL makes it a cinch to support; if a company like Datadog came in and added it to their already existing APM suite, Engine would be finished. Datadog APM is expensive, but it's generally interesting beyond GraphQL, and its not five figures expensive at this scale.
Datadog already has an Apollo integration. It's not as good as Apollo Engine but when it's 80% of the product for 1% of the price then it's a no-brainer. We already paid Datadog anyway.
> disgustingly grandiose
Just like GraphQL itself.
Just like GraphQL itself.
The corollary to this is a lot of businesses don't care about $1500 a month, or $10k+ a month, or rather they see an appropriate amount of value, or they value not having to switch. It makes more sense for Apollo to focus on this business. And that is especially true if they have a product that is approaching a commodity.
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How easy would it be to estimate costs based on something like data points/performance traces? On the one hand, it makes total economic sense to align pricing against utility but I’ve also heard for larger enterprises, something that lets them price things out for the future helps with cost management.
Did you ever reach out to the Apollo team to express this concern?
From an SE/SO professional, can I rant here for a moment?
Marketing and Product rag on Sales a lot for discounting. Nevermind the fact that we own the touchpoints with an account, so it only makes sense that we'd know what any individual account needs. I've had this issue with Marketing and Product professionals since I started in Sales, and even more-so when I took over Sales Enablement and Sales Ops.
For one, pricing is a big deal, but value is bigger. I could sell you on that $1500/user easily by giving you a work product that factors the product roadmap, your business roadmap, and makes a compelling ROI case for you. I'm willing to give you those 8-11 hours.
But we both know it'll be wasted. Because in 90 days, Marketing will push a discount campaign that conflicts with preexisting agreements, and thereby throws all of that work product up in the air. We'd have to go back to square one and recalculate everything to see if a deal even exists. Or Product decides to drop the roadmap, delay a feature, realign to attempt to capture more of a saturated market.
You know who sets pricing? Pricing experts. And maybe, just maybe, if they spent five minutes on a discovery call with you, they'd understand why you bring up discounts, why I would rather give you the discount, and why both of us walk away knowing we missed an opportunity for quality relationship-building.
I tried this once with an account. We locked their pricing down, pushed a work product out justifying our use case. The account came back and requested we drop the discount, that they saw the additional upfront cost (nearly $40k+) as an investment in our roadmap that could return utility for them sooner rather than later. We made it six months post-close before Marketing and Product decided to completely drop the current roadmap and work on something else. I had to issue more than $22k back to that account, and we got forced into RFP by the parent org, which we lost and subsequently lost all business from them, domestic and international.
So. Thank you for airing your perspective. And just know that people like me have stormed in and out of meetings, and still do, trying to stop this BS.
Marketing and Product rag on Sales a lot for discounting. Nevermind the fact that we own the touchpoints with an account, so it only makes sense that we'd know what any individual account needs. I've had this issue with Marketing and Product professionals since I started in Sales, and even more-so when I took over Sales Enablement and Sales Ops.
For one, pricing is a big deal, but value is bigger. I could sell you on that $1500/user easily by giving you a work product that factors the product roadmap, your business roadmap, and makes a compelling ROI case for you. I'm willing to give you those 8-11 hours.
But we both know it'll be wasted. Because in 90 days, Marketing will push a discount campaign that conflicts with preexisting agreements, and thereby throws all of that work product up in the air. We'd have to go back to square one and recalculate everything to see if a deal even exists. Or Product decides to drop the roadmap, delay a feature, realign to attempt to capture more of a saturated market.
You know who sets pricing? Pricing experts. And maybe, just maybe, if they spent five minutes on a discovery call with you, they'd understand why you bring up discounts, why I would rather give you the discount, and why both of us walk away knowing we missed an opportunity for quality relationship-building.
I tried this once with an account. We locked their pricing down, pushed a work product out justifying our use case. The account came back and requested we drop the discount, that they saw the additional upfront cost (nearly $40k+) as an investment in our roadmap that could return utility for them sooner rather than later. We made it six months post-close before Marketing and Product decided to completely drop the current roadmap and work on something else. I had to issue more than $22k back to that account, and we got forced into RFP by the parent org, which we lost and subsequently lost all business from them, domestic and international.
So. Thank you for airing your perspective. And just know that people like me have stormed in and out of meetings, and still do, trying to stop this BS.
I've been on both sides so I understand your perspective.
Everyone wants to sell on _value_ and in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000.
However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".
Everyone wants to sell on _value_ and in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000.
However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".
> "in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000."
In an ideal world, yes. In the average large organization in the real world, though, very few people care about "saving employee hours". Particularly in middle management.
When a team's workload falls by 50%, there's rarely a magical stream of "useful work" that arises to replace it with. More likely, the team just sits around twiddling their thumbs; you either need to fire them, or concoct some busy work for them (defeating the point of the exercise in the first place).
Middle management are never going to gut their own team, because their headcount is what justifies their own position. This is also why your organization never has the budget for $10,000 - any money defaults to headcount, because headcount entrenches managerial authority.
Unless you're selling to C-suite (and can quantify the headcount reduction), "saving employee hours" is a terrible sales proposition for large enterprises.
In an ideal world, yes. In the average large organization in the real world, though, very few people care about "saving employee hours". Particularly in middle management.
When a team's workload falls by 50%, there's rarely a magical stream of "useful work" that arises to replace it with. More likely, the team just sits around twiddling their thumbs; you either need to fire them, or concoct some busy work for them (defeating the point of the exercise in the first place).
Middle management are never going to gut their own team, because their headcount is what justifies their own position. This is also why your organization never has the budget for $10,000 - any money defaults to headcount, because headcount entrenches managerial authority.
Unless you're selling to C-suite (and can quantify the headcount reduction), "saving employee hours" is a terrible sales proposition for large enterprises.
> When a team's workload falls by 50%, there's rarely a magical stream of "useful work" that arises to replace it with.
Yes, there is. It's known as "addressing technical debt".
Yes, there is. It's known as "addressing technical debt".
Yes, but what's the customer revenue gain from it?
not revenue gain, but https://understandlegacycode.com/blog/5-arguments-to-make-ma...
> However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".
So.. a bigger question. Why doesn't budgeting work like this?
So.. a bigger question. Why doesn't budgeting work like this?
The time savings is theoretical.
If the employees that you saved time from are hourly, you can just cut some hours and probably save money. Although you have to offset that with reduced morale if you cut employees/hours.
If you're saving time for salaried employees, you probably can't just cut hours. Now you have 1,000 spare man-hours this year, what do you do with them? If you saved 1000 employees the same amount of time per day, each of them has an extra 13.7 seconds per work day. A basically useless amount of time. If you freed up that time from only 100 employees, each gets an extra 20 minutes a day, which is an actually useful amount of time, almost 2 extra hours a week.
Assuming that you have saved a significant enough amount of time per employee, then the question becomes do you actually have productive work for them to do? You only saved money if you were going to hire people that you no longer have to hire, if those employees can create something with that spare time that generates revenue, or if you saved enough time that you can fire employee/s.
It's the same concept as discounts. Yes, discounts can save you money, but only if it was something you were going to buy anyways. It's like buying a new phone because it's 20% off. If your old phone was on it's last leg or you were going to buy one anyways, you saved 20%, yay. If you have a brand new flagship phone and you buy a new one just because it's 20% off, you haven't actually saved anything.
If the employees that you saved time from are hourly, you can just cut some hours and probably save money. Although you have to offset that with reduced morale if you cut employees/hours.
If you're saving time for salaried employees, you probably can't just cut hours. Now you have 1,000 spare man-hours this year, what do you do with them? If you saved 1000 employees the same amount of time per day, each of them has an extra 13.7 seconds per work day. A basically useless amount of time. If you freed up that time from only 100 employees, each gets an extra 20 minutes a day, which is an actually useful amount of time, almost 2 extra hours a week.
Assuming that you have saved a significant enough amount of time per employee, then the question becomes do you actually have productive work for them to do? You only saved money if you were going to hire people that you no longer have to hire, if those employees can create something with that spare time that generates revenue, or if you saved enough time that you can fire employee/s.
It's the same concept as discounts. Yes, discounts can save you money, but only if it was something you were going to buy anyways. It's like buying a new phone because it's 20% off. If your old phone was on it's last leg or you were going to buy one anyways, you saved 20%, yay. If you have a brand new flagship phone and you buy a new one just because it's 20% off, you haven't actually saved anything.
right. the money has to come from somewhere. you dont get an "employee hour rebate" from employee hours saved. maybe you should, but in reality it doesnt happen. anyway employee productivity claims necessarily get taken with a huge grain of salt. need to hit people over the head with the benefits.
Never sell your roadmap. $50k isn’t worth one of the few advantages startups have: agility. It’s also distracting. You get to have these fun hypothetical conversations instead of talking about the product you have. Sell what’s on the truck.
Was the product work discussed and planned with the product management and the developers? Did they understand what the client wanted? Did you follow up and liaise between product development and client during all this time?
To be fair one $22k customer is not much for a SaaS business with many or large customers. It does not justify spending months of work on a "feature" unless other customers also need it.
More importantly. Do you follow up on the feature and put product development in touch with the client to make it happen? It's always easy for sale to discuss whatever directly with the client and swear it's coming next, but what the client wants is super blurry (at best). Nobody can work on a task they do not understand, especially 3 months later when there is some (planned) time to work on it, so it's simply dropped. Thus is the cycle of how things are promised and cancelled.
To be fair one $22k customer is not much for a SaaS business with many or large customers. It does not justify spending months of work on a "feature" unless other customers also need it.
More importantly. Do you follow up on the feature and put product development in touch with the client to make it happen? It's always easy for sale to discuss whatever directly with the client and swear it's coming next, but what the client wants is super blurry (at best). Nobody can work on a task they do not understand, especially 3 months later when there is some (planned) time to work on it, so it's simply dropped. Thus is the cycle of how things are promised and cancelled.
Sure, but 1 customer actually paying $22k for a feature is a lot more valuable then thousands of customers saying they will pay $5 for a feature.
There is a big gap between being interested and being committed
There is a big gap between being interested and being committed
It's enterprise sales so every contract is assumed to be above $10k.
One $22k contract may a lot for the bonus basket of the person closing the sale, but it is not be much for the company as a whole compared to the 20 other contracts being negotiated and the 200 current enterprise customers, and it definitely means nothing for the product/marketing groups who won't see a dime.
That being said I absolutely agree that if a customer is willing to pay for something, it's a very clear indicator of interest and it should be investigated. Hope it is easy enough to add and it is useful for every other customer!
One $22k contract may a lot for the bonus basket of the person closing the sale, but it is not be much for the company as a whole compared to the 20 other contracts being negotiated and the 200 current enterprise customers, and it definitely means nothing for the product/marketing groups who won't see a dime.
That being said I absolutely agree that if a customer is willing to pay for something, it's a very clear indicator of interest and it should be investigated. Hope it is easy enough to add and it is useful for every other customer!
Pricing things can be strange.
Back in the old Zortech days, we included full library source for free with the compiler. Library source wasn't even available for other compilers. Nobody particularly cared that we did that, and it was never mentioned in compiler reviews in the press. One day, Borland decided to package partial (not including floating point) library source for their compiler as a separate product. The press went ape over it with headline articles about how great this was. (Philippe Kahn was a marketing genius.) Naturally, we at Zortech found this annoying.
What we did was separate out the free library source into a separate package, and put a price on it. When people called up to buy the compiler, we'd ask "do you want the library source package, too, for an additional $XX?" They almost always said yes. So we made an extra $XX on each sale, leveraging the expectations Borland had set in the market.
Of course, these days expectations have changed again. We give D all away for free.
Back in the old Zortech days, we included full library source for free with the compiler. Library source wasn't even available for other compilers. Nobody particularly cared that we did that, and it was never mentioned in compiler reviews in the press. One day, Borland decided to package partial (not including floating point) library source for their compiler as a separate product. The press went ape over it with headline articles about how great this was. (Philippe Kahn was a marketing genius.) Naturally, we at Zortech found this annoying.
What we did was separate out the free library source into a separate package, and put a price on it. When people called up to buy the compiler, we'd ask "do you want the library source package, too, for an additional $XX?" They almost always said yes. So we made an extra $XX on each sale, leveraging the expectations Borland had set in the market.
Of course, these days expectations have changed again. We give D all away for free.
A looong time ago I worked at a comic book store and the owner had a table of freebies at the front of the store. The distributors were always sending marketing material with cool artwork, so instead of throwing it in the trash when it piled up, he figured why not give it away?
No one touched it. Then he started packaging it into $5 “grab bags”. That crap was gone in a week. The lesson? “You can’t give shit away, but put a price on it and it’ll sell”.
Maybe that says more about comic book store patrons than pricing, I’m not sure.
No one touched it. Then he started packaging it into $5 “grab bags”. That crap was gone in a week. The lesson? “You can’t give shit away, but put a price on it and it’ll sell”.
Maybe that says more about comic book store patrons than pricing, I’m not sure.
Recently I was moving and had some furniture ("junk") to dispose of. Calling a company to come get it was really expensive considering the stuff was effectively worthless. Posting it on Craigslist for free was useless -- no one wants your crap fo free.
Posting a Craigslist ad for $20 for an otherwise free couch? Gone the next day.
It's bizarre that this works, but boy, does it work.
Posting a Craigslist ad for $20 for an otherwise free couch? Gone the next day.
It's bizarre that this works, but boy, does it work.
I recall a French website like craiglist but only for donation, a tad niche but well known enough. Everything there was free for taking.
A decent half of listing were decent IMO, but oh boy, the other half were odd stuff and/or in such conditions that I can't imagine anybody taking them (even if paid to). The adage you get what you pay for holds true.
Funny enough, it's even worse the other way around, trying to give (good) items for free. People are atrocious. They book to pick up and don't show up. When they show up, they're often empty handed and act like unbelievable idiots. "Oh it's the fridge from 3 years ago, not the newer model, nevermind not interested." Can't believe this happening if I didn't hear it with my own ears. Anyway, they came without appropriate transportation, couldn't pick up a fridge/couch no matter what.
A decent half of listing were decent IMO, but oh boy, the other half were odd stuff and/or in such conditions that I can't imagine anybody taking them (even if paid to). The adage you get what you pay for holds true.
Funny enough, it's even worse the other way around, trying to give (good) items for free. People are atrocious. They book to pick up and don't show up. When they show up, they're often empty handed and act like unbelievable idiots. "Oh it's the fridge from 3 years ago, not the newer model, nevermind not interested." Can't believe this happening if I didn't hear it with my own ears. Anyway, they came without appropriate transportation, couldn't pick up a fridge/couch no matter what.
Sometimes use "it's free" to imply "no liability" to an extreme degree, e.g. sell a couch infested with bugs.
i.e people anticipating human psychology on the seller end.
i.e people anticipating human psychology on the seller end.
People do value things by what they pay. I saw this when I was consulting, pushing up my prices resulted in more respect and better treatment.
"Since I paid a lot of money on this consultant, his advice better be good. No it must be good otherwise I'm wasting my money."
Not being able to see the contents, customers probably assumed there was something more valuable in there than promotional items. I doubt many of them bought more than one grab bag.
I think Diamond (the distributor) frowns on stores selling items that were meant to be given away for free. To be honest, the owner doesn’t sound like the most reputable guy.
I think Diamond (the distributor) frowns on stores selling items that were meant to be given away for free. To be honest, the owner doesn’t sound like the most reputable guy.
Iirc there was always at least one old comic in these grab bags, and this was 30+ years ago so it was silver age, and the bags were transparent. I just thought it was a cool story, have mercy internet stranger! This person was around 23, spent his inheritance buying the store from a WW 2 vet and was out of business within a year.
If the bag was clear that makes a big difference and means I was wrong to assume something was afoot.
I remember going to lots of different comic shops as a kid and even through young eyes it was obvious that some of the owners were fairly shady. I’m sorry for projecting that onto your story. Sorry to hear it didn’t work out for him; that sounds like it must have been a rough experience.
I remember going to lots of different comic shops as a kid and even through young eyes it was obvious that some of the owners were fairly shady. I’m sorry for projecting that onto your story. Sorry to hear it didn’t work out for him; that sounds like it must have been a rough experience.
Oh wow, Zortech. I learned C in seventh grade on an ancient 486DX2 with the Zortech compiler (from a bunch of floppies which I got from the father of a kid in my carpool). Hacking analog clocks with the Zortech graphics library, writing my own linked list hash table for a color-coded version of “dir”...
That's hilarious.
I wonder D's adoption and share was changed now if it was free back then. It might be used instead of Go or Rust today.
I do wish I'd come up with D in the 1980's.
Do you think you could implement the D compiler in 1980s computer?
A good subset of it, yes.
I didn't know about the Red Cross and its donuts. The example I've always used for this is helping a friend move.
If the friend asks "hey, will you help me move? I'm buying pizza and beer afterwards!" I will more than likely say yes, even though I can buy my own pizza and beer.
If they instead say "hey, will you help me move? I'll pay you $21.58 for your time," I'd probably bristle. Even though that might be the equivalent price of a few slices of pizza and a beer, the category has changed from showing appreciation to placing an actual value on my time, at which point working all day for $21.58 stops making sense.
If the friend asks "hey, will you help me move? I'm buying pizza and beer afterwards!" I will more than likely say yes, even though I can buy my own pizza and beer.
If they instead say "hey, will you help me move? I'll pay you $21.58 for your time," I'd probably bristle. Even though that might be the equivalent price of a few slices of pizza and a beer, the category has changed from showing appreciation to placing an actual value on my time, at which point working all day for $21.58 stops making sense.
In behavioral economics that’s sometimes referred to as “social norms versus market norms” [first useful link, 1].
The example given (I think it’s via Ariely) is that you wouldn’t pay your friend to have cooked you dinner. This is the same thing: there’s social contract value in helping your friend out, and they’re showing appreciation with a token. In fact, if you friend offers you more money than the pizza and beer, you are likely to be insulted by the lowball offer, since you now evaluate the suggestion in terms of work for hire via market norms.
Social norms are so powerful though, that even if the friend offers you higher than your market rate, it’s still not worth it to take it, as it would shift your relationship (with lifetime value X) from a social one to a commercial one. Usually when people say “humans are irrational” they should be saying “people have complex utility / reward functions”!
[1] https://www.behavioraleconomics.com/resources/introduction-b...
The example given (I think it’s via Ariely) is that you wouldn’t pay your friend to have cooked you dinner. This is the same thing: there’s social contract value in helping your friend out, and they’re showing appreciation with a token. In fact, if you friend offers you more money than the pizza and beer, you are likely to be insulted by the lowball offer, since you now evaluate the suggestion in terms of work for hire via market norms.
Social norms are so powerful though, that even if the friend offers you higher than your market rate, it’s still not worth it to take it, as it would shift your relationship (with lifetime value X) from a social one to a commercial one. Usually when people say “humans are irrational” they should be saying “people have complex utility / reward functions”!
[1] https://www.behavioraleconomics.com/resources/introduction-b...
I mean, the pizza and beer offer also presumably includes spending time hanging out with your friend, the value of which cannot be equated with money.
Interesting comment!
I have this relatively unconventional theory that, if we use automation just right and make the cost of food production, delivery, and preparation low enough, and also do so where ownership of the machinery is distributed throughout society, that we could make it a social norm to give anyone who needs it free food. All in a voluntary system. We just need to make the actual cost of the whole supply chain low enough that people don't care about giving away a bit for free. Like in the extreme case how cafes give out free wifi because the marginal cost of delivering wifi to one more person is so low. I could imagine shops having a "free food" option made using some low cost proteins and fiber and prepared using some cheap robot. And then they would charge for hand made food or something, using the free food as a loss leader.
So my theory is that those robots need to be made as cheaply as possible. And that makes me think they need to be open source so anyone capable of manufacturing them can compete to supply them. Like how 3D printers got so cheap once the patents expired. They went from $30k to $300 in 20 years.
The real trick is sustaining robotics businesses that can pay engineering talent to produce open source robotics. Prusa Research has succeeded here with their 3D printers, and I am hoping I am able to reproduce that success with the farming robot I am working on now. But we aren't certain we will make it open source. It depends on how we can sustain funding. I think it's very possible though and I'm committed to it.
I think it's extremely interesting that Prusa Research can give all of their IP away and coexist in the market with clones at less than 1/2 the price. Users understand that the first party product is higher quality, and those that can afford it still buy from Prusa. There seems to be room in that market for both Prusa and the many clones. I wonder if we can reproduce this success with automation in other areas.
I have this relatively unconventional theory that, if we use automation just right and make the cost of food production, delivery, and preparation low enough, and also do so where ownership of the machinery is distributed throughout society, that we could make it a social norm to give anyone who needs it free food. All in a voluntary system. We just need to make the actual cost of the whole supply chain low enough that people don't care about giving away a bit for free. Like in the extreme case how cafes give out free wifi because the marginal cost of delivering wifi to one more person is so low. I could imagine shops having a "free food" option made using some low cost proteins and fiber and prepared using some cheap robot. And then they would charge for hand made food or something, using the free food as a loss leader.
So my theory is that those robots need to be made as cheaply as possible. And that makes me think they need to be open source so anyone capable of manufacturing them can compete to supply them. Like how 3D printers got so cheap once the patents expired. They went from $30k to $300 in 20 years.
The real trick is sustaining robotics businesses that can pay engineering talent to produce open source robotics. Prusa Research has succeeded here with their 3D printers, and I am hoping I am able to reproduce that success with the farming robot I am working on now. But we aren't certain we will make it open source. It depends on how we can sustain funding. I think it's very possible though and I'm committed to it.
I think it's extremely interesting that Prusa Research can give all of their IP away and coexist in the market with clones at less than 1/2 the price. Users understand that the first party product is higher quality, and those that can afford it still buy from Prusa. There seems to be room in that market for both Prusa and the many clones. I wonder if we can reproduce this success with automation in other areas.
Pretty cool concept you should write more about this. Do you have any other examples of companies that give away their IP but still thrive in the physical or digital world? Will definitely check out Prusa Research. I've always wondered if a restaurant could be built upon a similar concept, teaching people how to recreate it's foods but being so cheap and accessible that the cost of creating it yourself outweighs just buying it.
Thank you!
Yes actually Sparkfun Electronics was the first company I noticed that followed this pattern. They are essentially a hardware company that gives most or all of their product's IP away.
I remember this blog post made it very clear that very open source hardware companies could thrive:
https://www.sparkfun.com/news/599
The internal side of their business is was built on open source software, which is a good example of what can come from open source ecosystems:
https://opensource.com/business/12/9/how-sparkfun-built-open...
This post of 15 years of operation shows where their value add is: https://www.sparkfun.com/news/2571
They do a lot of hard work that isn't in their product's IP. Just bringing physical matter together is hard and essentially that's what they get paid for.
The similar company Adafruit I believe does not always open source their products, though they do produce a lot of open guides and open source code. It would be interesting to understand what led them to keep some products partially proprietary (they'd share schematics but not board files sometimes). I wonder if cheap office space in Colorado vs a warehouse in NYC caused the differences.
Also all of the companies that make 3D printers are part of this. The Chinese companies which sell clones are important innovators in the field. Prusa and Creality are perhaps in some ways like Apple and Samsung - they feed off one another. They do not merely clone the prusa - none of the big companies sell an exact clone of the MK3 for example - they instead make the design work for their factory. Prusa relies on lots of 3D printed parts because the best factory for them is a print farm of their machines. But in China they may prefer sheet metal bending and injection molding. Since the design has few restrictions, whichever hardware company that can make a functioning product cheapest will succeed in a normal market. AKA open sourcing has some automatic cost reducing effect.
So if we open source a bunch of technology related to meeting core human needs, then the cost of keeping people alive will go down. Then you need a means of distributing that technology throughout the world. And again open source allows free movement of product around the world - no regional restrictions or limited supply chains. The takeaway for all of us is - the future can be good, go work on some useful open source stuff and lets all keep researching how best to fund it.
So this whole theory is like "OMG we're doing everything backwards" and I definitely want to write about it more. I just find personal engineering projects to draw my attention more than writing. I need a Walden Pond.
Yes actually Sparkfun Electronics was the first company I noticed that followed this pattern. They are essentially a hardware company that gives most or all of their product's IP away.
I remember this blog post made it very clear that very open source hardware companies could thrive:
https://www.sparkfun.com/news/599
The internal side of their business is was built on open source software, which is a good example of what can come from open source ecosystems:
https://opensource.com/business/12/9/how-sparkfun-built-open...
This post of 15 years of operation shows where their value add is: https://www.sparkfun.com/news/2571
They do a lot of hard work that isn't in their product's IP. Just bringing physical matter together is hard and essentially that's what they get paid for.
The similar company Adafruit I believe does not always open source their products, though they do produce a lot of open guides and open source code. It would be interesting to understand what led them to keep some products partially proprietary (they'd share schematics but not board files sometimes). I wonder if cheap office space in Colorado vs a warehouse in NYC caused the differences.
Also all of the companies that make 3D printers are part of this. The Chinese companies which sell clones are important innovators in the field. Prusa and Creality are perhaps in some ways like Apple and Samsung - they feed off one another. They do not merely clone the prusa - none of the big companies sell an exact clone of the MK3 for example - they instead make the design work for their factory. Prusa relies on lots of 3D printed parts because the best factory for them is a print farm of their machines. But in China they may prefer sheet metal bending and injection molding. Since the design has few restrictions, whichever hardware company that can make a functioning product cheapest will succeed in a normal market. AKA open sourcing has some automatic cost reducing effect.
So if we open source a bunch of technology related to meeting core human needs, then the cost of keeping people alive will go down. Then you need a means of distributing that technology throughout the world. And again open source allows free movement of product around the world - no regional restrictions or limited supply chains. The takeaway for all of us is - the future can be good, go work on some useful open source stuff and lets all keep researching how best to fund it.
So this whole theory is like "OMG we're doing everything backwards" and I definitely want to write about it more. I just find personal engineering projects to draw my attention more than writing. I need a Walden Pond.
hi taylor, adafruit's products are open-source, all the board files are on github, check the open hardware certification listing with adafruit, which is currently the most certified (329 out of 783 certifications, are from adafruit) https://certification.oshwa.org/list.html?q=adafruit
"cheap office space" is not a factor in our decision to be an open-source hardware company.
"cheap office space" is not a factor in our decision to be an open-source hardware company.
Okay good to know thank you! Somehow I recall finding some products whose source files were not listed next to the schematics, but maybe that was a while ago.
So kind of like how a bar has a bowl of nuts or pretzels out for free.
Or, at work, I bought a pastry from the cafeteria. About 5 minutes later they put out a whole platter of the same pastries in the dining area for free (they didn't sell, and would be dumped otherwise).
Or, at work, I bought a pastry from the cafeteria. About 5 minutes later they put out a whole platter of the same pastries in the dining area for free (they didn't sell, and would be dumped otherwise).
Kind of!
It’ll be much like water in most of the world: free on a personal scale.
eaenki(2)
Also, there is this case of a daycare center which started to collect fines for late child pickups. The result? The rate of late pickups increased. Picking the child late stopped being a shameful thing to do, causing the poor worker to wait for you, it started being a normal paid service you could use every time you wanted.
https://freakonomics.com/2013/10/23/what-makes-people-do-wha...
Even more interesting, and relevant to this discussion, was that the rate didn't decrease again (within the measured time frame) after the fine was removed again! (from the paper linked in your article)
You make me think of some study that concluded "Pay enough (market rate) or pay nothing." People who will do volunteer work for an organization because they believe in the mission will walk away and cuss you if you offer them 5 cents an hour for the same work because it's all you can afford to pay.
Yeah for me the hangout with the pizza and beer is the real reward!
[deleted]
Where does a few slices of pizza and a beer cost $21?
They said beer, not a beer. In Australia, the cheapest 6 pack you can buy is about $22.
You got weird friends, no one's ever had to ask or bribe me, I would just offer to help.
In turn I'd also be uncomfortable asking others to do manual labor for me, if they didn't offer when I said I was moving I wouldn't ask. Buying them supper after would be a given, no bribe required.
In turn I'd also be uncomfortable asking others to do manual labor for me, if they didn't offer when I said I was moving I wouldn't ask. Buying them supper after would be a given, no bribe required.
“I’ll buy you pizza for helping me move” is an extremely common social interaction, to the point of being a trope. It’s not a bribe, it’s an acknowledgement that helping somebody move is a huge amount of work and some token of appreciation is wise.
GP doesn’t have weird friends.
GP doesn’t have weird friends.
And when I was TA grading exams, the professor would buy us all pizza as well. It was technically unnecessary as grading was part of why were being paid as TAs, but it was a nice touch and put us all in a better mood and with a favorable view of the professor.
Sitting down and having a meal is breaking bread with friends. Thats always more than a simple financial transaction of $20 or so.
There was an article that time is our most important resource... Having a meal with someone is giving your most important resource to them, and them to you.
There was an article that time is our most important resource... Having a meal with someone is giving your most important resource to them, and them to you.
> Buying them supper after would be a given, no bribe required.
I think this is actually kind of the point. By offering to provide pizza, you're casually confirming that you're still operating in the paradigm where friends help each other out without looking too closely at the balance sheet, as opposed to offering nothing (awkward) or paying them (turning it into a transaction).
I think this is actually kind of the point. By offering to provide pizza, you're casually confirming that you're still operating in the paradigm where friends help each other out without looking too closely at the balance sheet, as opposed to offering nothing (awkward) or paying them (turning it into a transaction).
I think you've badly missed the point.
If you take issue with an analogy, try one that fits your experiences better.
You offer to help, and then your friend says: "awesome, afterwards I'll buy you pizza and beer" vs "awesome, afterwards I'll pay you $21.58".
The order of offering vs asking for help wasn't at issue in the analogy.
If you take issue with an analogy, try one that fits your experiences better.
You offer to help, and then your friend says: "awesome, afterwards I'll buy you pizza and beer" vs "awesome, afterwards I'll pay you $21.58".
The order of offering vs asking for help wasn't at issue in the analogy.
Weird friends are great. Everyone secretly appreciates special handling. Little bribes make the world go round. It's quite an art getting someone to help without them eventually feeling a tiny hint of being taken advantage of, and vice versa.
I think the idea is partly "I could use some help with this, but I'll get some food and drinks and we'll try to hang out and have a good time even though the work part sucks"
I've always interpreted it as a "reason" to hang out, or a politeness thing. It also makes it clear that your buddy doesn't plan to shoo you out of their new apartment once you're done the job.
I witnessed something like this when I worked at a Six Flags amusement park (wasn't 6F at the time) that had a decent size water park. They did exit surveys every night, asking as many people as they could if things were ok, and one year they also asked people "Would you pay extra for the water park", it was free as part of admission. So they wanted to know if people would pay extra. People said yes. Something like 90% of people said yes. So, of course, the bosses all thought "hey we can make some extra money and people won't mind!"
So fast forward to the next year, they charged the same for people to get in and something like $10 to get into the water park. Something like 101% of people were ANGRY. Not just a little angry, VERY angry. It was a HUGE change that people didn't expect. There were VERY few people that paid. I can't remember if they made it free that year or waited until the next.
So fast forward to the next year, they charged the same for people to get in and something like $10 to get into the water park. Something like 101% of people were ANGRY. Not just a little angry, VERY angry. It was a HUGE change that people didn't expect. There were VERY few people that paid. I can't remember if they made it free that year or waited until the next.
A park in Indiana, Holiday World, did something sorta the opposite.
They figured out how much the average guest paid for drinks, then raised the ticket prices that much but made all drinks free in the park.
It was a huge success. People expect ticket prices to go up occasionally and they expect to be gouged for drinks. By getting "free" drinks, it felt like a huge value. (At least for me when I visited.) I bet it made food sales increase too, because now people wouldn't have to pay for a drink too.
Not sure if they're still doing that, but at the time they also had free sunscreen all over the park. It's an amazing little park.
They figured out how much the average guest paid for drinks, then raised the ticket prices that much but made all drinks free in the park.
It was a huge success. People expect ticket prices to go up occasionally and they expect to be gouged for drinks. By getting "free" drinks, it felt like a huge value. (At least for me when I visited.) I bet it made food sales increase too, because now people wouldn't have to pay for a drink too.
Not sure if they're still doing that, but at the time they also had free sunscreen all over the park. It's an amazing little park.
Growing up in Indiana: I don't remember much about different theme parks, but I remember that I'd always end the day dehydrated and thirsty--but not at Holiday World. And regardless of the actual amount of money, as a kid it removed friction from getting a drink, I didn't have to go ask my parents for money. (Just drink for free from the water fountain! Sure, maybe as an adult, but it's definitely easier for kid-me to drink a yummy sugary beverage than water.) And that contributed to having a better time there.
And so we went to Holiday World way more often than King's Island, which was almost an hour closer to us (maybe Holiday World was just a better park too, maybe not--like I said, I don't actually remember much about various parks).
And so we went to Holiday World way more often than King's Island, which was almost an hour closer to us (maybe Holiday World was just a better park too, maybe not--like I said, I don't actually remember much about various parks).
I've got my own biases [1], but Kings Island has always been a bigger/better park than Holiday World, but yes that free soft drink package makes a lot of sense on why it would be more appealing to all sorts of families regardless of whether the park is better or not overall.
[1] I worked food service at Kings Island for a summer and a half way back in High School.
[1] I worked food service at Kings Island for a summer and a half way back in High School.
For fun, I asked my mom if she remembers why we went to Holiday World more. She mentioned the free sunscreen (she didn't remember the free soft drinks[1]), and said that Kings Island was too crowded.
[1] and I hadn't remembered the free sunscreen until I read the parent post.
[1] and I hadn't remembered the free sunscreen until I read the parent post.
Ive been saying for years that airlines should do this. Add the price of an alcoholic beverage to everyone's ticket and then give those who want one a "free" drink. I never understood why they opted to go with ruthless cuts and declining customer experience.
For a while, Porter Airlines (Canada) would offer free coffee + free cookies out of their terminal in Toronto. They would also offer you a free beer (a full 500ml, not the 341ml one) on the flight if this was an afternoon/evening flight. I feel that a lot of their expansion was just the word of mouth "OH AND THEY GIVE YOU FREE COOKIES". Their flight might have been a bit more expensive, but the amount of good will they got from those free items was huge and for a while Porter was really what people preferred.
Then they sold their terminal and started leasing it, and now suddenly, no more free coffee and free cookies. I don't know if the free beer is still around but for a while we had everyone complain on how "they no longer have free cookies". And then we just stopped hearing about it because people just didn't care about Porter anymore, you would just get the cheapest flight and that would typically not be them and it's not like they were offering something special anymore.
It looks to me that this was probably not a super huge expense that was probably giving them a much higher ROI than the pure $ value of what it cost them.
Then they sold their terminal and started leasing it, and now suddenly, no more free coffee and free cookies. I don't know if the free beer is still around but for a while we had everyone complain on how "they no longer have free cookies". And then we just stopped hearing about it because people just didn't care about Porter anymore, you would just get the cheapest flight and that would typically not be them and it's not like they were offering something special anymore.
It looks to me that this was probably not a super huge expense that was probably giving them a much higher ROI than the pure $ value of what it cost them.
That's sad. I used to go to NYC from Toronto for work once every month or two and I always flew Porter, and it was the best. The cookies and coffee was a nice touch. Comfortable lounge, etc. But that was 8, 9 years ago, and the last time I flew Porter was to Burlington, VT (before they cut that route) to go skiing, and they were in the process of renovating the lounge and changing things around. There was still free coffee but the shortbread cookies were nowhere to be seen; I could see things were changing.
That route was the best, BTW; I'd leave my house at 6:30am or so by taxi, get an early morning flight to Newark, take the train to Penn station, walk from there to the office and still arrive before many of my NY coworkers were at the office. Once we got bought by Google I found I could still make it to the Google NYC office in time for breakfast service. Memories :-)
That route was the best, BTW; I'd leave my house at 6:30am or so by taxi, get an early morning flight to Newark, take the train to Penn station, walk from there to the office and still arrive before many of my NY coworkers were at the office. Once we got bought by Google I found I could still make it to the Google NYC office in time for breakfast service. Memories :-)
For what it's worth, those were also some of the most delicious prepackaged cookies I've ever eaten. It's not just that they were free.
> Their flight might have been a bit more expensive,
So they weren't free. They were just priced into your ticket.
note: I'm not saying they didn't generate good will. Just say if the flight was more expensive then a competitor then you were actually paying for those things and it was just fiction that they were free.
So they weren't free. They were just priced into your ticket.
note: I'm not saying they didn't generate good will. Just say if the flight was more expensive then a competitor then you were actually paying for those things and it was just fiction that they were free.
> I never understood
The airlines are masters at A/B testing and figuring out what works best, as the industry is notoriously low margin and very cut-throat. You can bet that they price things this way because it works better.
BTW, people pay a lot extra for first class tickets and love the "free" drinks. Different classes is how the airlines optimize profits from different market segments. They're very good at this.
The airlines are masters at A/B testing and figuring out what works best, as the industry is notoriously low margin and very cut-throat. You can bet that they price things this way because it works better.
BTW, people pay a lot extra for first class tickets and love the "free" drinks. Different classes is how the airlines optimize profits from different market segments. They're very good at this.
"Masters of A/B testing" is, in my opinion, a gross overstatement. However what is true, is that a large number of people will automatically choose the lowest available option among airfares, without considering comfort or amenities. When your product is efficiently lined up against your competitors, sorted by price alone, (i.e. Expedia, Kayak...), then being second-place by $3 is enough to impact sales volume.
It's one of the primary reason airlines have moved so much of the total cost out of the ticket price, and on to additional fees: luggage, food, seat selection, printing a boarding pass, etc.
It's one of the primary reason airlines have moved so much of the total cost out of the ticket price, and on to additional fees: luggage, food, seat selection, printing a boarding pass, etc.
That underestimates how sophisticated the airline's slicing and dicing of the market is. Ever wonder why no two people on a flight paid the same price? Why there are a proliferation of classes on board?
Beyond economy class, of course the price is less of a factor (didn't realize that needed to be stated).
"No two people paid the same price" is a myth, most certainly not true. Ever book 2+ seats at the same time?
Airlines do use yield management techniques, however, which results in pricing that changes for the same resource over time. That's not A/B testing, and like anything that relies on a lot of forecasts as inputs, bad forecasts up front often lead to sub-optimal revenue totals.
"No two people paid the same price" is a myth, most certainly not true. Ever book 2+ seats at the same time?
Airlines do use yield management techniques, however, which results in pricing that changes for the same resource over time. That's not A/B testing, and like anything that relies on a lot of forecasts as inputs, bad forecasts up front often lead to sub-optimal revenue totals.
> Beyond economy class
economy+ class
business class
first class
> Ever book 2+ seats at the same time?
Ok, ya got me there. Ever book 2 seats not at the same time?
> often lead to sub-optimal revenue totals
Airlines are not stupid with their operations management, and expend a great deal of effort optimizing revenue.
economy+ class
business class
first class
> Ever book 2+ seats at the same time?
Ok, ya got me there. Ever book 2 seats not at the same time?
> often lead to sub-optimal revenue totals
Airlines are not stupid with their operations management, and expend a great deal of effort optimizing revenue.
Are you telling me you've surveyed every person on the plane to know for absolute sure nobody paid the same price? Do you think they create a unique fare code for every passenger? Of course they don't.
I never said airlines are stupid, I stated an opinion they are not "masters of a/b testing". You've not provided any evidence to convince me otherwise.
I never said airlines are stupid, I stated an opinion they are not "masters of a/b testing". You've not provided any evidence to convince me otherwise.
> Are you telling me you've surveyed every person on the plane to know for absolute sure nobody paid the same price?
I read it some years ago in an article about airline operations management and how they optimized their fares, which varied constantly through the day and the days of the week. Then there are all the various discounts people can get, frequent flyer prices, rebooking fees, etc. It's all based on heavy use of statistics, which is a more complex version of A/B testing.
> I never said airlines are stupid
You suggested they often make bad forecasts, implying they didn't know what they were doing.
But you may believe whatever you like.
I read it some years ago in an article about airline operations management and how they optimized their fares, which varied constantly through the day and the days of the week. Then there are all the various discounts people can get, frequent flyer prices, rebooking fees, etc. It's all based on heavy use of statistics, which is a more complex version of A/B testing.
> I never said airlines are stupid
You suggested they often make bad forecasts, implying they didn't know what they were doing.
But you may believe whatever you like.
Because most people search fares online and book the cheapest ticket.
Do they? I certainly don't behave that way. Fares are definitely something I factor in heavily, but a $10 difference isn't something I consider significant.
Long before that point, I start looking at other factors like departure and arrival times and whether I like the airline.
For example, I just did a quick search, and for $25 more total round trip, I can get nonstop flights both ways. I didn't specify nonstop as a search filter (since there are few nonstop flights between these two cities), but now that I know it's only $25 more, I'd pick that.
Long before that point, I start looking at other factors like departure and arrival times and whether I like the airline.
For example, I just did a quick search, and for $25 more total round trip, I can get nonstop flights both ways. I didn't specify nonstop as a search filter (since there are few nonstop flights between these two cities), but now that I know it's only $25 more, I'd pick that.
Most people dont fly often enough to have brand preferences about airlines.
That actually does not disprove the GP's point. People do this when the price difference is too high, or when they don't know of any difference of value on both options.
Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to not differentiate itself.
(But I am very skeptical that a free drink would be enough of a difference.)
Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to not differentiate itself.
(But I am very skeptical that a free drink would be enough of a difference.)
>Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest
Where are you getting this? Tons of airlines provide varying levels of service/amenities. Only thing that is homogeneous is that you get from A to B.
I think you are onto something there, but you should have phrased it another way.
E.g. I think airlines were caught in a devils agreement with air travel search engines.
They gave them access to their flights, and the search engines had to find the simplest qualities to compare fares on. That usually meant price.
So you have tons of airlines with no clear value proposition differences in a search result, and it leads to the equilibrium being a devastating fight for lowest price.
Where are you getting this? Tons of airlines provide varying levels of service/amenities. Only thing that is homogeneous is that you get from A to B.
I think you are onto something there, but you should have phrased it another way.
E.g. I think airlines were caught in a devils agreement with air travel search engines.
They gave them access to their flights, and the search engines had to find the simplest qualities to compare fares on. That usually meant price.
So you have tons of airlines with no clear value proposition differences in a search result, and it leads to the equilibrium being a devastating fight for lowest price.
Getting from A to B is the most important service an airline provides. The seats are always cramped, so the degree doesn't matter terribly. Even on their website, I can't search by "flight has power outlets". Nor is the wifi speed available, or even consistent. Maybe the problem is that airlines don't have a value prop relative to each other at all.
Wow, I have a very different experience than you. I've noticed vast differences in airlines, how cramped they are, the cleanliness of their planes, the amenities inside the plane, the quality of the food offerings, even the attitude of the staff . And, having experienced all these different airlines, when I'm on a route i've been before I'm apt to pick the airline that gave me the best experience if other things are relatively comparable (price/time)
Even on the same airline, often there are partnerships. For example JAL/American and ANA/United I'm make sure to book the fight run by the Japanese partner not the American partner and the experience will be night and day. The Japanese plane will be clean the USA plane will be less clean. The Japanese staff will be friendly and service oriented. The USA staff will make me feel like I'm a burden on them and they'd rather be doing anything than their job. The food, even though it's airplane food, will be higher quality on the Japanese airline. Etc...
Even on the same airline, often there are partnerships. For example JAL/American and ANA/United I'm make sure to book the fight run by the Japanese partner not the American partner and the experience will be night and day. The Japanese plane will be clean the USA plane will be less clean. The Japanese staff will be friendly and service oriented. The USA staff will make me feel like I'm a burden on them and they'd rather be doing anything than their job. The food, even though it's airplane food, will be higher quality on the Japanese airline. Etc...
It might well be, but we can't be sure, because just like you said that info is not available in an easily comparable form.
It's gonna be interesting to see the growth of new airlines now that COVID is a thing.
Low prices seem to be a given, but customers are expecting service that accommodates their new fears related to air flight.
It's gonna be interesting to see the growth of new airlines now that COVID is a thing.
Low prices seem to be a given, but customers are expecting service that accommodates their new fears related to air flight.
You can't search for "Flight has power outlets" because the airline doesn't necessarily know that the flight will have power outlets until the day of the flight.
They aren't going to advertise "Flight has an 80% chance of having power outlets". And likewise, they don't want to deal with customers complaining that a power outlet flight did not, indeed have power outlets.
They aren't going to advertise "Flight has an 80% chance of having power outlets". And likewise, they don't want to deal with customers complaining that a power outlet flight did not, indeed have power outlets.
> Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other
Southwest has a pretty loyal following since you can "refund" a ticket for Southwest credit good for a year.
Alaska and Delta don't charge for bike fees (they're just priced like ordinary luggage).
And aside from maybe 1K members, I don't know anyone who enjoys flying United.
Southwest has a pretty loyal following since you can "refund" a ticket for Southwest credit good for a year.
Alaska and Delta don't charge for bike fees (they're just priced like ordinary luggage).
And aside from maybe 1K members, I don't know anyone who enjoys flying United.
Hawaiian Airlines offered free Mai Tais when getting close to HNL, for a long time. They used to have metal forks too. And they had great food too, included! I didn’t mind paying a premium to fly Hawaiian. Then they implemented cost cutting measures. Now I just fly whoever is cheapest.
Yes! Hawaiian was great for years, then they reduced the service considerably. Now, even locals who want to support locals don't fly Hawaiian because there's cheaper flights that have about the same service level.
I've heard about people paying for booze on planes. But for some reason in all the dozens of times I've flown. Never paid to get drunk on a plane? Think the last flight I took was 3 years ago, so don't know what has changed. I do only fly on the west coast though.
I think there's free alcohol on international flights, but you pay for it in domestic flights.
Generally in my experience with international, you get one or two alcoholic beverages served with each meal (even Spirit airlines will give you a glass of red/white which I thought was impressive considering how stingy they are), and I think the flight attendants are allowed considerably more leeway on handing out free drinks. I've only paid for drinks on international a handful of times.
International flights are also significantly more profitable than short haul, so that might have some impact too.
International flights are also significantly more profitable than short haul, so that might have some impact too.
Because they are competing against other airlines to show you the lowest ticket price. Price has been shown to be the only factor most people consider when buying airline tickets.
As someone who doesn't drink alcohol, I hate that idea.
I stayed in a hotel in Chile many years ago that included dinner in your room (anything off the menu) and the entire mini bar. It made for a great, positive experience rather than the usual situation of griping about mini bar pricing. Surprised more places don't do it, at least for non-alcoholic drinks.
Amusement parks are less competitive for entry price. Most cities are lucky if they have one within driving distance. Flights on the other hand are very competitive on price.
> Ive been saying for years that airlines should do this
Alcoholic drinks are free on every one of the ~100 long-haul international flights I've ever taken, even in cattle class.
Alcoholic drinks are free on every one of the ~100 long-haul international flights I've ever taken, even in cattle class.
You do not want to distribute free beer (or any alcoholic beverage) to hundreds of people confined together for hours and with limited toilets, as in a plane.
As someone who doesn't drink alcohol it drives me crazy when the only option is to subsidize other's alcohol (because alcohol is marked up so heavily).
For people like me a paid-alcohol policy is a feature, not a bug.
For people like me a paid-alcohol policy is a feature, not a bug.
Same for paying for luggage. I'd rather pay for bags because it means when I travel light that I'm not subsidizing other people's bags.
Many people want the absolute cheapest ticket because having an expensive ticket doesn't really improve your life at all, at least on domestic flights.
I'm tall, so more legroom is essential when I fly. That means I usually need to upgrade (if I can't swing an exit row seat). So yes, an expensive ticket really does improve my life, for a short period of time.
Because people will buy the ticket which is $1 cheaper.
By what metric was it a success? Drinks, even non alcoholic ones, have phenomenal margins, and if you're stuck in a theme park or sports stadium, for hours, you basically have to purchase one. I'm a bit surprised this makes financial sense unless they really went for it.
For similar reasons, restaurants are hurting extra hard right now because people don't order drinks as often with delivery or takeout.
For similar reasons, restaurants are hurting extra hard right now because people don't order drinks as often with delivery or takeout.
It’s a success if more people show up. You’ve heard of sales, promotions, and loss leaders? Having good margins on drinks doesn’t mean it’s more profitable overall to charge for them, when having more people there means they’ll purchase more tickets, more food, and more souvenirs. Plus offsetting the ticket price by the retail price of a drink is likely to mean the move was instantly financially profitable, by getting 100% of people to “pay” for the drink, where before not everyone might.
> They figured out how much the average guest paid for drinks
It sounds like the margin was part of the ticket price increase. So it was a success in that more people came to the park because they thought they were getting a better deal and were happier about it because "free drinks".
It sounds like the margin was part of the ticket price increase. So it was a success in that more people came to the park because they thought they were getting a better deal and were happier about it because "free drinks".
It greatly increased guest satisfaction and I would bet it helped their bottom line a little too.
There will always be people that stick to free water or don't drink anything. By building the drink price into the ticket price, you're essentially getting everyone to pay for a drink.
There will always be people that stick to free water or don't drink anything. By building the drink price into the ticket price, you're essentially getting everyone to pay for a drink.
> free water
This is often not a thing in closed environments like theme parks
This is often not a thing in closed environments like theme parks
Which ones? At least several of the largest theme parks chains do offer free water, you can google it. Many allow bringing refillable bottles. I’d speculate it might be a medical liability issue to not offer tap water to guests in a closed environment summer activity.
None of that changes whether it’s profitable or a good idea to give away water or drinks.
https://www.themeparkinsider.com/flume/200908/1350/
None of that changes whether it’s profitable or a good idea to give away water or drinks.
https://www.themeparkinsider.com/flume/200908/1350/
Well this is based on average visitor, so it certainly makes sense—the revenue is more reliable and they can simplify vendors and improve the quality of life, too.
If they were hoping to increase per capita profit year over year without increasing ticket prices, yes, that was a mistake.
If they were hoping to increase per capita profit year over year without increasing ticket prices, yes, that was a mistake.
they save on the staff selling drinks too, at Holiday World the drinks dispensers are littered around the park in the same way water fountains are at others
(except six flags where they'll try and gouge you there too)
(except six flags where they'll try and gouge you there too)
They are still doing both.
Was there something wrong with the way the exit survey was asked/written? Because that is remarkable.
Was maybe part of the issue that people leaving when the exit survey was being run (at "night") not representative of the visitors as a whole?
Was maybe part of the issue that people leaving when the exit survey was being run (at "night") not representative of the visitors as a whole?
this is a well-known issue in market research, and survey design in particular. stated preferences are nearly useless in understanding customer segments and behavior. respondents have hundreds of different reasons for not answering with their true preferences (in this case, to not to pay more/separately).
instead, you want to reveal preferences using techniques like conjoint analysis (not always feasible), which better simulates the actual choices respondents might make in real situations.
instead, you want to reveal preferences using techniques like conjoint analysis (not always feasible), which better simulates the actual choices respondents might make in real situations.
It’s pretty obvious when you look at things from an awkward level of first principles.
“Based on this forced social interaction of questioning strangers as they left the park, we have forecasted how different people entering the park will react to a commercial interaction.”
Seems shocking that it would ever work at all.
“Based on this forced social interaction of questioning strangers as they left the park, we have forecasted how different people entering the park will react to a commercial interaction.”
Seems shocking that it would ever work at all.
It could have also been expectations.
The people reading a poorly written survey might have thought that the park wanted to SPLIT the fee structure.
The people reading a poorly written survey might have thought that the park wanted to SPLIT the fee structure.
* Same $$ Both Parks
* Fraction, One Park
Great questions, I wondered how they got it so wrong, I still wonder how they got it so wrong. It never occurred to me it may have been time of day they asked the questions.
Three things strike me here: audience, proximity, and predicting behavior.
- The audience coming out of the waterpark at the end of the day are different than the people entering the overall park at the beginning of the day. If nothing else, the larger group will include people who have no interest in going to the waterpark and therefore find no value in it at all. The smaller audience is more highly qualified.
- The proximity comes down to when you received/perceived value. Polling people immediately after they had a fun filled day is terrible timing. Think of the last time you went to a movie you LOVED. On the way out, if someone had asked "want to see it again" you would have said "yes!" but a week later, much less so. Now a year later would you buy the same movie on streaming?
- And finally, people are terrible about predicting their own behavior, especially if it requires work or not-immediately visible value. That's why most New Year's resolutions are dead by February. After hitting this lots of times, I stay away from "would" questions: https://caseysoftware.com/blog/the-problem-with-would
But without going through that pain and suffering it first hand, it's hard to predict when/if it will occur. There are lots of other packaging & pricing strategies to address this intersection of economics & psychology.
- The audience coming out of the waterpark at the end of the day are different than the people entering the overall park at the beginning of the day. If nothing else, the larger group will include people who have no interest in going to the waterpark and therefore find no value in it at all. The smaller audience is more highly qualified.
- The proximity comes down to when you received/perceived value. Polling people immediately after they had a fun filled day is terrible timing. Think of the last time you went to a movie you LOVED. On the way out, if someone had asked "want to see it again" you would have said "yes!" but a week later, much less so. Now a year later would you buy the same movie on streaming?
- And finally, people are terrible about predicting their own behavior, especially if it requires work or not-immediately visible value. That's why most New Year's resolutions are dead by February. After hitting this lots of times, I stay away from "would" questions: https://caseysoftware.com/blog/the-problem-with-would
But without going through that pain and suffering it first hand, it's hard to predict when/if it will occur. There are lots of other packaging & pricing strategies to address this intersection of economics & psychology.
There's a big difference between spending hypothetical dollars and real dollars, no matter how much you ask people to please try really really hard to pretend they're spending real dollars.
It's a recurring element in the recurring "I Tried To Start A SaaS Business And It Crashed And Burned Taking My Will To Live With It" posts on HN... "I asked some people if they'd be willing to buy it and they said yes, were very encouraging, until I asked them to actually buy it."
It's a recurring element in the recurring "I Tried To Start A SaaS Business And It Crashed And Burned Taking My Will To Live With It" posts on HN... "I asked some people if they'd be willing to buy it and they said yes, were very encouraging, until I asked them to actually buy it."
"Would you pay extra for the water park" at the end of a fun day is a proxy for "did you appreciate/receive value from this thing you just finished enjoying?"
Whereas, on a random Tuesday, announcing: "Want to come to the water park? PAY US MORE MONEY." Is a proxy for "we're taking something away from your admission ticket and trying to backdoor a new charge".
Whereas, on a random Tuesday, announcing: "Want to come to the water park? PAY US MORE MONEY." Is a proxy for "we're taking something away from your admission ticket and trying to backdoor a new charge".
Or people who answer surveys have more money
Past elections have told us exit polling is a load of horseshit. These are useless metrics.
If you are referring to 2016, the national results were pretty accurate. Clinton did win the popular vote. The Electoral College gives slightly more power to small states than they would get under a popular vote, and occasionally that extra power makes a difference.
It's true - charging for something that was once free can be risky, but it isn't always bad as some might believe. I have great respect for businesses that charge for a service that provides real value - even if it was once free. Often times (especially in the startup world), companies start out offering a free product (operating at a loss) to gain market share. It's not often the best strategy, but in some markets it's one of the few ways to break in and gain traction. Obviously, you can't sustain operating a business that way forever, so you eventually have to make up for it somehow.
Unfortunately, a lot of tech companies have (perhaps unintentionally) conditioned consumers to expect software to be free. The terrible consequence is that in response to that pressure, many companies choose ethically-questionable ways to make money when they need to, rather than simply charging a fair and honest price for their product (this includes selling users' data, overwhelming the user experience with ads, in-app purchase shenanigans, etc). Paying fair prices for things we use isn't the most appealing idea in the world, but (in my opinion) we probably need more of it, not less.
Unfortunately, a lot of tech companies have (perhaps unintentionally) conditioned consumers to expect software to be free. The terrible consequence is that in response to that pressure, many companies choose ethically-questionable ways to make money when they need to, rather than simply charging a fair and honest price for their product (this includes selling users' data, overwhelming the user experience with ads, in-app purchase shenanigans, etc). Paying fair prices for things we use isn't the most appealing idea in the world, but (in my opinion) we probably need more of it, not less.
There's a common theme on HN that it's all the fault of consumers for wanting free stuff. The truth is, budgets are limited, and if you start charging for stuff you will soon find out how much consumers actually value it - with respect with other stuff they can buy. I'm not talking about the average HN user making six figures in a cushy software job - of course you'd pay for a product like Gmail. But think about most people who don't care that much about technology, to whom it's just a tool and not an art, a craft or a hobby. Do you really think your product is that valuable? Do you really think people are willing to buy your content - enough that you can stay afloat?
It's not that consumers want free stuff, it's just that most people do not have extra money laying around.
I'll also add that "charging a fair price" has never deterred companies from engaging in unethical and privacy-violating practices in addition to taking your money. See: Microsoft, Amazon, etc.
It's not that consumers want free stuff, it's just that most people do not have extra money laying around.
I'll also add that "charging a fair price" has never deterred companies from engaging in unethical and privacy-violating practices in addition to taking your money. See: Microsoft, Amazon, etc.
I'm not faulting consumers for wanting free stuff. If anything, it's a symptom of companies (and investors) putting too much value in vanity metrics and expecting that it will be easy to transition to revenue.
I've seen it first-hand: startups intentionally forgoing revenue so they can be measured by the stick of imaginary future profits correlated with their free product's success. Then when investors finally do start asking to see real returns, it's a scramble to find something that doesn't involve charging their current user base (because of course no one wants to pay for something that has been free previously). That's when the "creative" money-making ideas start getting real consideration.
In effect, those actions end up communicating to the public that software is free when it really isn't. It gives the impression that there isn't a cost associated with developing and maintaining software, when really it might just be funded temporarily by investors with deep pockets and high expectations, or supported by other revenue sources that the end user would not agree to in full transparency.
I've seen it first-hand: startups intentionally forgoing revenue so they can be measured by the stick of imaginary future profits correlated with their free product's success. Then when investors finally do start asking to see real returns, it's a scramble to find something that doesn't involve charging their current user base (because of course no one wants to pay for something that has been free previously). That's when the "creative" money-making ideas start getting real consideration.
In effect, those actions end up communicating to the public that software is free when it really isn't. It gives the impression that there isn't a cost associated with developing and maintaining software, when really it might just be funded temporarily by investors with deep pockets and high expectations, or supported by other revenue sources that the end user would not agree to in full transparency.
My understanding is that VCs actively encourage the behavior of “grow then figure out the business model.” Of course, if you are a free product at scale, the most simple solution is to start selling data, since it avoids the challenge of trying to get consumers to pay for something they “believe” is free. This obviously leads to free products that are less and less in the interest of the user, but it’s very very difficult to convince someone who got a thing for free that it can’t continue forever that way, even if there are obvious costs that must be converted to supply the free good. This is especially true if the competitors are offering free based on selling data. There’s definitely an interesting and challenging future in finding ways to scale in spaces that are currently dominated by “free” in exchange for data and privacy.
I imagine people probably would pay for gmail if they didn't get a free account through their ISP. it wasn't too long ago that email was either a paid service or bundled with an internet connection.
I don't get the vibe that HN thinks the current state of affairs is completely the fault of the customers. it's a two way street. companies offer free services either at a loss or supported by ads or data mining. once people have a free option, it takes a lot of value add to get them to actually pay for a competing solution.
I don't get the vibe that HN thinks the current state of affairs is completely the fault of the customers. it's a two way street. companies offer free services either at a loss or supported by ads or data mining. once people have a free option, it takes a lot of value add to get them to actually pay for a competing solution.
I'm sure that's much of it. But some people just really like free stuff. I used to volunteer at a conference series with a $5k price tag. Many of the attendees were wealthy. But when we put out free stuff on the giveaway table, even stuff they could easily buy, a lot of those rich people were very grabby.
A similar thing happens in the podcasting space.
It's a pity it's still quite inconvenient to make micropayments. If I could make a single click to pay a penny for access to a single article, I imagine I'd do so frequently.
It's a pity it's still quite inconvenient to make micropayments. If I could make a single click to pay a penny for access to a single article, I imagine I'd do so frequently.
You would need to pay quite a bit more to make this viable for most publications. The ballpark formula is the issue price divided by the number of articles the average reader wants to read enough to pay anything. For example, a WSJ is $4, so if readers wanted to read ten articles, they should charge 40-50 cents for them.
A more realistic price might be $1-2/article since the median reader won’t be that interested. Pricing schemes that increase the total reading cost on a log curve can be imagined.
Of course we dream of a micropayments system fluid enough that people start consuming 10-100x the content so the price per piece can go down accordingly, but that is unlikely since there isn’t that much free time. A first mover might accumulate a lot of new readers, but that would eventually even out.
A more realistic price might be $1-2/article since the median reader won’t be that interested. Pricing schemes that increase the total reading cost on a log curve can be imagined.
Of course we dream of a micropayments system fluid enough that people start consuming 10-100x the content so the price per piece can go down accordingly, but that is unlikely since there isn’t that much free time. A first mover might accumulate a lot of new readers, but that would eventually even out.
The price needs to be at or below $0.09 for people to just unlock the news and read on, no thinking.
An online newspapers might make $3 per thousand views, plastering ads everywhere and maybe videos. That means they survive with way less than 1 penny per view. They have no excuse to try to charge orders of magnitude more.
An online newspapers might make $3 per thousand views, plastering ads everywhere and maybe videos. That means they survive with way less than 1 penny per view. They have no excuse to try to charge orders of magnitude more.
Not all online news sites are the same. The New York Times does real journalism, which takes real resources. I'm not convinced that they can be sustained on advertising dollars.
> They have no excuse to try to charge orders of magnitude more.
But that's just what you proposed. $0.09 is over an order of magnitude greater than $0.003. That pricepoint would still be fine - far less than the price of a coffee.
> They have no excuse to try to charge orders of magnitude more.
But that's just what you proposed. $0.09 is over an order of magnitude greater than $0.003. That pricepoint would still be fine - far less than the price of a coffee.
I'm thinking of what happens when HackerNews links to a New York Times article. People hit the paywall, so someone posts a workaround. NYT get $0.
If there were an extremely convenient way to pay a few pennies for access (a price low enough that I wouldn't think twice), they'd be making something, at least. I'm not about to go through the hassle and cost of subscribing for a month, to access a single article, and neither is anyone else here.
I understand that this 'one shot' model isn't necessarily representative of how their website is generally used, of course.
> a WSJ is $4, so if readers wanted to read ten articles, they should charge 40-50 cents for them.
For a physical copy.
Disregarding current promotional prices, The Guardian charge £12/month for a digital subscription. New York Times is £8 for 4 weeks. Not sure how many articles the typical reader gets through though, or how that should inform our thinking here.
If there were an extremely convenient way to pay a few pennies for access (a price low enough that I wouldn't think twice), they'd be making something, at least. I'm not about to go through the hassle and cost of subscribing for a month, to access a single article, and neither is anyone else here.
I understand that this 'one shot' model isn't necessarily representative of how their website is generally used, of course.
> a WSJ is $4, so if readers wanted to read ten articles, they should charge 40-50 cents for them.
For a physical copy.
Disregarding current promotional prices, The Guardian charge £12/month for a digital subscription. New York Times is £8 for 4 weeks. Not sure how many articles the typical reader gets through though, or how that should inform our thinking here.
This is what the Brave browser is attempting to do, with mixed success
There's also scroll.com, which is more netflix-y: you pay a fixed amount per month and it gets paid out to particpating sites you visit.
Too few partners. Doesn't include the Wall Street Journal or the New York Times, for instance.
I favour the nickel-and-dime approach. I'm sure I'd only need to pay pennies per day to outpay advertisers. (I'm assuming that would be enough to keep these outlets afloat, which might not be the case.)
I favour the nickel-and-dime approach. I'm sure I'd only need to pay pennies per day to outpay advertisers. (I'm assuming that would be enough to keep these outlets afloat, which might not be the case.)
I would like to see more partners too, but for me it was enough to get started. I'm not particularly worried about the NYT or the WSJ having enough money. It's the smaller sites that I'm aiming to support by using Scroll.
Do they have a plugin for Firefox? No way that strategy works without plugins for other browsers. —- I hope they succeed.
I'm pretty sure this is what Blendle[0] is doing - pay per article. I've been using it for a year and ended up subscribing to a few of the publications.
0. https://blendle.com
0. https://blendle.com
Google Contributor is one attempt to pay creators and it's not terrible. The big downside is that even though ads are blocked, Google is still tracking you.
It would be nice if there was somebody other than Google running the program.
It would be nice if there was somebody other than Google running the program.
> Unfortunately, a lot of tech companies have (perhaps unintentionally) conditioned consumers to expect software to be free
I think Apple started this movement with the App Store and the .99 cent app. I think it coincided with the shift from on-prem software to cloud, but that really shifted what people can charge for software. We've seen a bit of a shift back the last ~5 years maybe? But I still think it the App store started the current epoch.
I think Apple started this movement with the App Store and the .99 cent app. I think it coincided with the shift from on-prem software to cloud, but that really shifted what people can charge for software. We've seen a bit of a shift back the last ~5 years maybe? But I still think it the App store started the current epoch.
It was the internet that made software free, starting with the browser, and continuing with the adoption of Linux with its free tools.
Yes, it's been a long term trend. Prices tend to decline towards their marginal cost. In the case of software this is close to zero.
Hence companies like MicroSoft are shifting towards services.
Hence companies like MicroSoft are shifting towards services.
I also don't think many tech companies would be mistaken for "something like Mom". There's a fundamental thing about creature-comforts like food and coffee that would make this situation more emotional.
See also: monkey grape experiment
https://www.npr.org/sections/13.7/2014/02/27/283348422/that-...
I heard a related story (I'll add source if I find it) where monkeys received 2 grapes every day. This was increased to 3 grapes per day for one week. When they returned to the normal 2 grapes per day, the monkeys threw poo at the experimenters.
https://www.npr.org/sections/13.7/2014/02/27/283348422/that-...
I heard a related story (I'll add source if I find it) where monkeys received 2 grapes every day. This was increased to 3 grapes per day for one week. When they returned to the normal 2 grapes per day, the monkeys threw poo at the experimenters.
Grapes ARE rich in fiber
This is a good cautionary tale and one I've seen played out in the tech industry with food. Even in the 80's it wasn't uncommon for a tech company to have a "beer bust" on Friday's where drinks and snacks were served as a social gathering for employees at the end of the work week. It was a turning point in employee relations when the VP of HR at Sun cancelled the weekly beer bust. Similarly at Google when they decided to scale back the legendary "mini-kitchens" full of snacks, "healthy alternatives" that were slowly pared down.
One sociologist I read wrote, and I'm paraphrasing, "Sharing food with another is an action of great significance. Evolutionary, the sharing of food by hunter gatherers was more significant than sex in establishing a mutually bonding relationship." They went on to discuss the importance that meals played in our history and why we "throw a feast" to welcome heroes, and the Jesus' "big reveal" happened at a meal.
The main point was that when you share food with someone you trigger a very ancient and well established mechanism. Conversely, when you stop sharing food with someone, you signal their ancient brain "I don't trust you any more, we aren't friends."
Now whether or not that thought/emotion comes to the surface, it's very clear that the for many people the change from "sharing food with you" to "not sharing food with you" changes how they see their relationship with you. What is perhaps worse is that the damage is instant and irreversible. Even if you start sharing again, the people you stopped sharing with, even temporarily[1], will no longer feel the same trust that they felt before.
At tech companies those people leave and eventually you have all employees who only remember the current system and so you're at a new "normal."
Bottom line, taking away "free" food is waaaay more impactful on company morale/relationships than you would ever imagine unless you had researched it. Thus, it happens over and over again. And even though I know a company is just trying to make me like it by giving me free food, I can't keep myself from being positively effected by it. That response is buried somewhere deep inside my head that doesn't allow for excision.
[1] Yes, there are ways to temporarily stop and not disconnect but that involves messaging before one stops sharing to both provide the external reason for the change and the conditions on which the change would revert back to sharing.
One sociologist I read wrote, and I'm paraphrasing, "Sharing food with another is an action of great significance. Evolutionary, the sharing of food by hunter gatherers was more significant than sex in establishing a mutually bonding relationship." They went on to discuss the importance that meals played in our history and why we "throw a feast" to welcome heroes, and the Jesus' "big reveal" happened at a meal.
The main point was that when you share food with someone you trigger a very ancient and well established mechanism. Conversely, when you stop sharing food with someone, you signal their ancient brain "I don't trust you any more, we aren't friends."
Now whether or not that thought/emotion comes to the surface, it's very clear that the for many people the change from "sharing food with you" to "not sharing food with you" changes how they see their relationship with you. What is perhaps worse is that the damage is instant and irreversible. Even if you start sharing again, the people you stopped sharing with, even temporarily[1], will no longer feel the same trust that they felt before.
At tech companies those people leave and eventually you have all employees who only remember the current system and so you're at a new "normal."
Bottom line, taking away "free" food is waaaay more impactful on company morale/relationships than you would ever imagine unless you had researched it. Thus, it happens over and over again. And even though I know a company is just trying to make me like it by giving me free food, I can't keep myself from being positively effected by it. That response is buried somewhere deep inside my head that doesn't allow for excision.
[1] Yes, there are ways to temporarily stop and not disconnect but that involves messaging before one stops sharing to both provide the external reason for the change and the conditions on which the change would revert back to sharing.
I immediately thought of company perks as another good example of this.
I can remember when my company was trying to spend less, so they took away an employee perk. Now this employee perk was kind of ridiculous (no other company paid for it) and it wasn't that popular (a few people used it).
However, when they took it away? Holy crap were people pissed.
This is one of the big lessons for me early in my career. Before you do something, ask yourself if you're prepared to do it forever. Sometimes it doesn't matter, but sometimes it does and you'll be better off if you never do it in the first place versus doing it and then taking it away.
I can remember when my company was trying to spend less, so they took away an employee perk. Now this employee perk was kind of ridiculous (no other company paid for it) and it wasn't that popular (a few people used it).
However, when they took it away? Holy crap were people pissed.
This is one of the big lessons for me early in my career. Before you do something, ask yourself if you're prepared to do it forever. Sometimes it doesn't matter, but sometimes it does and you'll be better off if you never do it in the first place versus doing it and then taking it away.
We went through this. When 2008 hit the company stopped providing free sodas and bottled water for our office of only about 30 people. I was damn close to just buying them myself but it was crazy how upset a few people making moderately insane amounts of money would get over not getting a $1/day benefit.
I completely relate to both of these.
My experience is that you get a mix of people saying "just give me the money, I'll decide if I want to spend it on snacks" and people who say "I really like that snacks are available, please keep them."
From a financial perspective its pretty hard "move the needle" on an engineers salary with free snacks and drinks. Median engineering salary in the Bay Area is more than $100K. So assuming the engineer was consuming $20 of snacks per day, 5 days a week 50 days a year, that is $5,000 per year per engineer. Not surprisingly there was lots of data on this at Google which I got a chance to review when I made a big stink about the switch in juice vendors. Not something I could share but it looked exactly like I expected it to look, sort of a power log curve where most people were way under the average and a much much smaller number were way over. That they couldn't manage the people who filled up their back packs with food and drinks for their family before they went home each night was telling on a number of levels.
Of course the IRS and New York Times are all about how this "under the table benefit is robbing us of income tax" is pretty predictable as well.
[1] https://www.indeed.com/career/engineer/salaries/San-Francisc...
My experience is that you get a mix of people saying "just give me the money, I'll decide if I want to spend it on snacks" and people who say "I really like that snacks are available, please keep them."
From a financial perspective its pretty hard "move the needle" on an engineers salary with free snacks and drinks. Median engineering salary in the Bay Area is more than $100K. So assuming the engineer was consuming $20 of snacks per day, 5 days a week 50 days a year, that is $5,000 per year per engineer. Not surprisingly there was lots of data on this at Google which I got a chance to review when I made a big stink about the switch in juice vendors. Not something I could share but it looked exactly like I expected it to look, sort of a power log curve where most people were way under the average and a much much smaller number were way over. That they couldn't manage the people who filled up their back packs with food and drinks for their family before they went home each night was telling on a number of levels.
Of course the IRS and New York Times are all about how this "under the table benefit is robbing us of income tax" is pretty predictable as well.
[1] https://www.indeed.com/career/engineer/salaries/San-Francisc...
> That they couldn't manage the people who filled up their back packs with food and drinks for their family before they went home each night was telling on a number of levels.
Oh that one is easy. The management all want to take home stuff too. My last company had some IT items that you could get from vending machines. The moment I said I was leaving a manager asked if I could use my badge to grab something for her, saying she'd already maxed out for the month. I realized I'd become a source of untracked purchasing, and assumed she probably wanted to take an item home.
Oh that one is easy. The management all want to take home stuff too. My last company had some IT items that you could get from vending machines. The moment I said I was leaving a manager asked if I could use my badge to grab something for her, saying she'd already maxed out for the month. I realized I'd become a source of untracked purchasing, and assumed she probably wanted to take an item home.
>>> $20 of snacks per day
It's more than 50 cans of soda a day. Thank god they were taken away before the poor engineer would drink them all and liquefy.
https://www.walmart.com/ip/Coca-Cola-Soda-12-Fl-Oz-24-Count/...
It's more than 50 cans of soda a day. Thank god they were taken away before the poor engineer would drink them all and liquefy.
https://www.walmart.com/ip/Coca-Cola-Soda-12-Fl-Oz-24-Count/...
Your comment about the hidden impact of cancelling snacks reminds me of this article: https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
Yup, and to Steve's point "The sodas were just the wake-up call.", it was more than a wake up call. As the paper explained, to stop sharing food with someone forces them to re-evaluate their relationship to you. They can't help it, it's thousands of years of behavioral training that kicks in and says, "This person no longer likes/trusts me, what should I do now?"
Keep in mind that, according to your post, it was the VP of HR, not Finance, that shut it down. Sun didn't end the outings for financial reasons -- the HR dept decided, unfortunately, that it was legally prudent to stop serving alcohol and to end the encouragement of socializing between employees.
Yup, the unfortunately named Crawford Beverage.
It’s important to remember that companies are staffed by primates.
It is interesting to me how much free givaways people get in America.
In Austria (and maybe some other parts of Europe, not sure), not only that free refills are unheard of, you even get charged for ketchup sauce at McDonalds. (The minimal allowed food quality is higher, though, so there might be economic reasons on top of, I believe, primarily societal reasons.)
It is charged somewhere around 40 to 50 Eurocent per 25ml.
In Austria (and maybe some other parts of Europe, not sure), not only that free refills are unheard of, you even get charged for ketchup sauce at McDonalds. (The minimal allowed food quality is higher, though, so there might be economic reasons on top of, I believe, primarily societal reasons.)
It is charged somewhere around 40 to 50 Eurocent per 25ml.
I don't think it's an exaggeration to say that if fast food places charged for condiments or soda refills in America, customers would become violent with employees.
A customer shot employees at a McDonald's because the customer wasn't allowed to dine in the restaurant: https://www.latimes.com/world-nation/story/2020-05-07/police...
A customer shot employees at a McDonald's because the customer wasn't allowed to dine in the restaurant: https://www.latimes.com/world-nation/story/2020-05-07/police...
When I worked at McDonalds during college, we implemented a surcharge for people wanting extra sauce for McNuggets. It was like $.25 each. If you bought a 6 pack you got 2 things of sauce. A 9 pack came with 3, and a 20 pack came with 5. So really, you got a lot of sauce included.
But people were pissed. It was only a small portion of customers who even asked for more than the include packages, but they were hot about it.
When I first started, we didn't even give free refills of soda or coffee. And I remember, we had this group of senior citizens who came in every morning as a group to just drink coffee and BS. Well, the tax rate in CA changed one day, bumping the price of a cup of joe up a penny. You'd think we had stolen their Social Security checks. They were outraged. Trust me, you do not want a pissed off senior citizen yelling at you when you're 16.
But people were pissed. It was only a small portion of customers who even asked for more than the include packages, but they were hot about it.
When I first started, we didn't even give free refills of soda or coffee. And I remember, we had this group of senior citizens who came in every morning as a group to just drink coffee and BS. Well, the tax rate in CA changed one day, bumping the price of a cup of joe up a penny. You'd think we had stolen their Social Security checks. They were outraged. Trust me, you do not want a pissed off senior citizen yelling at you when you're 16.
Even public restrooms are free in the States - not sure how that hasn’t caught on more
Free condiments etc are free in the suburbs but urban/urbifying places will typically restrict you to X packets per Y possibly as a cost cutting measure. I would guess that the packets cost $0.10 or more each. 10 ketchup packets might cost the restaurant as much as the profit margin on a medium fries.
Soda refills are almost free, the cup costs more than the soda, so besides avoiding an obesity epidemic, the customer satisfaction of giving free refills is probably worth it. Also it probably costs more to pay someone $15/hr to just fill sodas, when you can get the customers to self-service for free.
Soda refills are almost free, the cup costs more than the soda, so besides avoiding an obesity epidemic, the customer satisfaction of giving free refills is probably worth it. Also it probably costs more to pay someone $15/hr to just fill sodas, when you can get the customers to self-service for free.
Once you lower the price of a product, you can never raise it again.
I heard that on/around HN at some point and I haven't seen it proven wrong yet. There's a reason why chip bags get smaller, why new versions that seem identical to the old come out, why Tommy Hilfiger will never be a prestige brand again. And it's because customers don't tolerate raising prices.
I heard that on/around HN at some point and I haven't seen it proven wrong yet. There's a reason why chip bags get smaller, why new versions that seem identical to the old come out, why Tommy Hilfiger will never be a prestige brand again. And it's because customers don't tolerate raising prices.
Cars are a major counter example. Over time the Honda Accord, Honda Civic, and Honda Fit all started at about the same size but the current Accord and Civic have grown significantly larger and thus more expensive. The idea is to let brands grow up with people, so someone who bought a civic at 30 can likely afford a slightly nicer civic at 35, and also needs an incentive to upgrade.
A few well received wine brands for example have had very rapid price increases. However, it’s more common to increase prices a little faster than inflation which quickly adds up, see Disneyland for example. What brands can’t do is lower cost and quality then try and quickly add it back.
PS: In 1964 Disneyland charged 25c/day for parking per day or about 2.08$ in today’s money. Except they currently charge 25$/day for parking.
A few well received wine brands for example have had very rapid price increases. However, it’s more common to increase prices a little faster than inflation which quickly adds up, see Disneyland for example. What brands can’t do is lower cost and quality then try and quickly add it back.
PS: In 1964 Disneyland charged 25c/day for parking per day or about 2.08$ in today’s money. Except they currently charge 25$/day for parking.
I don't think your car example holds up. Sure, Honda has brands they call "Accord" and "Civic", but a 2019 Accord is different from a 2014 Accord. I don't think anyone would tolerate a rise in prices on a 2014 Accord manufactured year after year: if Honda never changed the car and continued calling it "2014 Honda Accord", I don't think they could raise its price.
I'm a little closer to accepting your premise with Disney. However, it's not "parking" you're paying for; it's "parking at Disney" and Disney continually makes changes to its product offering. Further, neither "parking at Disney" nor "tickets for Disney" are a regular, periodic purchase.
I'm a little closer to accepting your premise with Disney. However, it's not "parking" you're paying for; it's "parking at Disney" and Disney continually makes changes to its product offering. Further, neither "parking at Disney" nor "tickets for Disney" are a regular, periodic purchase.
We are talking about brands:
> Tommy Hilfiger will never be a prestige brand again.
They don’t sell the same shirts every year either. But, they can’t simply make a better product next year and expect to charge premium prices because people associate brands with relative costs. Bud light at 30% more a case is not going to sell well even if they suddenly increased the quality. Thus Honda created the Acura brand when they wanted to sell up market, and even BMW swaps to Rolls-Royce when they want to go really up market.
> Tommy Hilfiger will never be a prestige brand again.
They don’t sell the same shirts every year either. But, they can’t simply make a better product next year and expect to charge premium prices because people associate brands with relative costs. Bud light at 30% more a case is not going to sell well even if they suddenly increased the quality. Thus Honda created the Acura brand when they wanted to sell up market, and even BMW swaps to Rolls-Royce when they want to go really up market.
Disneyland isn't a great example to use for pricing, because it is a fixed resource. Demand goes up simply because population is increasing and so is their reach. They don't really need to improve the quality of the park at all.
In fact, I'd say they are still undercharging. The park will still fill up on peak days. They have been trying to fix this by increasing the prices of passes and decreasing the days they allow you in. But it's not working (current situation not withstanding).
Disneyland is a fixed resource, so it doesn't really apply to pricing discussions of resources that can be variable, like SaaS products.
In fact, I'd say they are still undercharging. The park will still fill up on peak days. They have been trying to fix this by increasing the prices of passes and decreasing the days they allow you in. But it's not working (current situation not withstanding).
Disneyland is a fixed resource, so it doesn't really apply to pricing discussions of resources that can be variable, like SaaS products.
I think you’re underestimating their strategy.
Disney does a lot to segment visitors with both after hours events and even ultra premium packages. However, they are also making money from food, merchandise, and hotel’s so they want attendance to be near maximum capacity year round and adjust prices weekly to get people in the doors. Further they want long lines at major attractions to get people to spend money at gift shops rather than do free rides all day.
Disney does a lot to segment visitors with both after hours events and even ultra premium packages. However, they are also making money from food, merchandise, and hotel’s so they want attendance to be near maximum capacity year round and adjust prices weekly to get people in the doors. Further they want long lines at major attractions to get people to spend money at gift shops rather than do free rides all day.
> and adjust prices weekly to get people in the doors.
They don't adjust prices very often at all. They way they regulate attendance in real time is by allowing lower tier passholders to come in on days they predict low traffic.
The page isn't interesting now, but they have a website that shows when employee passes are good and for which park[0].
That's a great way to figure out when Disneyland will be crowded. If employees are allowed to bring guests to both parks, it'll be a light day.
[0] https://blockoutdates.disney.com/en/home
They don't adjust prices very often at all. They way they regulate attendance in real time is by allowing lower tier passholders to come in on days they predict low traffic.
The page isn't interesting now, but they have a website that shows when employee passes are good and for which park[0].
That's a great way to figure out when Disneyland will be crowded. If employees are allowed to bring guests to both parks, it'll be a light day.
[0] https://blockoutdates.disney.com/en/home
First park tickets are just part of the story they are also adjusting hotel room costs and occasionally offering ‘free’ meal plans. Those prices go up and down not just for the specific day, but also how far out your doing the booking. On top of that they do various partnerships and large group discounts to try and keep the parks filled.
Most of these are either seasonal events or have prices that shift in response to time of year or just demand. https://disneyworld.disney.go.com/events-tours/
Most of these are either seasonal events or have prices that shift in response to time of year or just demand. https://disneyworld.disney.go.com/events-tours/
That's DisneyWorld, not DisneyLand. They have an entirely different pricing structure because they have so much more space there, they can just build more park to meet demand. So they are built to the peak and then need to incentivize people to come off peak.
DisneyLand can't build any more park, so they could charge even more than they do now and keep the park full.
DisneyLand can't build any more park, so they could charge even more than they do now and keep the park full.
Ahh ok, I see where you’re coming from though Disneyland has a similar list https://disneyland.disney.go.com/events-tours/ and pricing structures. That park is apparently more dependent on locals.
You don't generally buy cars frequently enough to know the price offhand.
The price also gets bundled in with all sorts of options, 50 different configurations, different financing rates and terms, etc.
The price also gets bundled in with all sorts of options, 50 different configurations, different financing rates and terms, etc.
Coincidentally, I was thinking of Kia as a great counter example. Admittedly I don't know much, but haven't they started offering much nicer cars over time, as the brand as grown?
The size wasn't because of marketing or anything, it's because of the higher crash standards.
This made me think of living in New York, during the $1-pizza-slice boom during the 2008 recession, and I was curious how those places were doing in more recent years. Looks like 2 Bros. Pizza (as of 2018) was still sticking to a dollar, but other places may not have:
https://www.vice.com/en_us/article/evk75k/the-slow-death-of-...
> It’s a beautiful system, but it’s quickly vanishing from the city’s food landscape right from under our noses. The spots that used to churn out this style of pizza, many of which still have the awnings over them marking them as $1 slice establishments, are giving way to outside forces and silently raising prices to $1.25, $1.50, and even two dollars per slice.
https://www.vice.com/en_us/article/evk75k/the-slow-death-of-...
> It’s a beautiful system, but it’s quickly vanishing from the city’s food landscape right from under our noses. The spots that used to churn out this style of pizza, many of which still have the awnings over them marking them as $1 slice establishments, are giving way to outside forces and silently raising prices to $1.25, $1.50, and even two dollars per slice.
A slice in NYC tends to match the cost of a subway ride.
https://en.wikipedia.org/wiki/Pizza_Principle
https://en.wikipedia.org/wiki/Pizza_Principle
Why not the dollar van slice then? (Jitney slice doesn’t have the same ring to it)
Sure you can. Prices fluctuate all the time.
Your customers don't like being swindled. And oftentimes, when a price jumps, they feel swindled. I think the consumer's swindle perception factor is more dependent on the second derivative of the price history than the first.
Your customers don't like being swindled. And oftentimes, when a price jumps, they feel swindled. I think the consumer's swindle perception factor is more dependent on the second derivative of the price history than the first.
That's not true. In the past, we raised the price of our physical products. It never put a dent in our sales. The question is what are you selling, and who are you selling it to. Also, there is a difference between selling a service or selling a product.
But no, we raise the price of our products, and never saw any issue from it.
But no, we raise the price of our products, and never saw any issue from it.
But did you lower the price then raise it? That's the key differentiator in the customer/retailer relationship that I believe the parent comment made.
My father said when he was a boy there was the "nickel bar" of chocolate. The size of the bar went up and down with chocolate prices, but the bar was always a nickel.
> There's a reason why .. Tommy Hilfiger will never be a prestige brand again. And it's because customers don't tolerate raising prices.
Tommy Hilfiger used to sell high end ($1000+) foul weather gear stuff for offshore (ocean) yacht racing in the 1980s. Briefly in the 1990s they were the preppy kid's branding of choice. Everyone bought at least five branded tshirts at JC Pennys or whatever at the mall each year along with Gap and Mossimo and Nautica. They are now the premium brand at Ross dress for less.
Tommy Hilfiger used to sell high end ($1000+) foul weather gear stuff for offshore (ocean) yacht racing in the 1980s. Briefly in the 1990s they were the preppy kid's branding of choice. Everyone bought at least five branded tshirts at JC Pennys or whatever at the mall each year along with Gap and Mossimo and Nautica. They are now the premium brand at Ross dress for less.
Reduce the quality/quantity of the existing product to keep the same price over time. Release another similar 'product', possibly under a different product name and/or brand with the original quality/quantity but at a higher price.
The crucial part a lot of businesses miss is have some breadcrumbs for your most loyal customers to follow so you don’t lose them with the quality drop.
Don’t advertise it, just put it on your website where someone might be able to find it on Google.
Don’t advertise it, just put it on your website where someone might be able to find it on Google.
Ice cream containers always go down in size. Then they go up again advertising 30% more.
Well i dont know about Tommy H but in general a lot of designer brands raised their prices in recent years.
Interestingly enough I used to work at a company where the one any only benefit was occasional doughnuts on Friday (we did not get health insurance/dental/vision/retirement). And honestly we would all be pissed on the days when Doughnut Friday was cancelled.
Reminds me of this story I read a long time ago on HN and which is on topic for this thread.
https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
edit: I see it has already been posted.
https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
edit: I see it has already been posted.
Ask any tech worker in an office about the free snack selection. My coworkers get genuinely outraged when we trade out one brand of prepackaged nuts for another, or when their preferred soda goes out of rotation. Never mind they all make six figures and could easily purchase whatever snacks they wanted. The cost of the employee time spent complaining every time something changes here easily outweighs the cost of the entire snack program.
My company did this once a month on new hire day.
It was cancelled and people were very angry.
This was a few years before i started. 10 years later people are still angry, and some never had that benefit!
It's like the monkey banana thing.
The US is such a weird place.
As an aside, I am really, really surprised and happy to see a plain-text website available, if you decline cookies. That's a neat approach.
NPR has a full text-only version of their site. Here's this article there:
https://text.npr.org/s.php?sId=156737801
The "sId" parameter on text.npr.com matches the penultimate part of the www.npr.com URL.
https://text.npr.org/s.php?sId=156737801
The "sId" parameter on text.npr.com matches the penultimate part of the www.npr.com URL.
As someone who has turned nearly all cookies off, I appreciate (and use) the plaintext site as well, but there's really no actual reason why they couldn't serve the regular site without cookies all the same.
> there's really no actual reason why they couldn't serve the regular site without cookies all the same.
Well, handling it may be difficult on the frontend, depending on implementation. May very well be easier to just serve it as plaintext.
Well, handling it may be difficult on the frontend, depending on implementation. May very well be easier to just serve it as plaintext.
I don't think it's GDPR compliant, but I'll take it over some other obnoxious "solutions" out there.
Oh, and why is that?
Is there anybody alive that holds this grudge? Even with the article from 2012, I don't know
Was this grudge instilled in children?
Was this grudge instilled in children?
Grandpa is 97 this year. He still refuses to support the red cross, because they charged for coffee and donuts in WW2 Guam.
He still talks about it like it was a personal attack. I grew up thinking the Red Cross was a for-profit war-profiteering leach of an organization.
He still talks about it like it was a personal attack. I grew up thinking the Red Cross was a for-profit war-profiteering leach of an organization.
> He still talks about it like it was a personal attack
Not surprising, otherwise he wouldn't hold the grudge for so long.
Many climate change deniers feel like even implying they're a (tiny) part of the (systemic) problem is a personal attack, hence their shitty attitude about science.
Not surprising, otherwise he wouldn't hold the grudge for so long.
Many climate change deniers feel like even implying they're a (tiny) part of the (systemic) problem is a personal attack, hence their shitty attitude about science.
I know a guy who died recently who didn't eat rice and exclusively bought Chinese and Korean electronics as a result of his involuntary relocation to a certain pacific island from 1942-45. He wasn't personally the target by any of the orders that the people he was wronged by were following yet I think most people would consider the grudge reasonable since he was personally affected even though it wasn't personally targeted at him. I consider OP's grandfather's grudge to be along those same lines albeit over a much more minor wrong.
> He wasn't personally the target by any of the orders that the people he was wronged by
I study WW2, especially the Pacific.
Trust me, that war was taken very personally, especially by infantry.
(The next time you watch a documentary on Saipan or Tarawa, note the American rifles are pointed at the ground, since the enemy was coming up through cave networks behind lines. Talk about close quarters fighting!)
I study WW2, especially the Pacific.
Trust me, that war was taken very personally, especially by infantry.
(The next time you watch a documentary on Saipan or Tarawa, note the American rifles are pointed at the ground, since the enemy was coming up through cave networks behind lines. Talk about close quarters fighting!)
Until reading the backstory a few years back, I had this grudge. I picked it up from my late father, who was a Lieutenant in the Marines in the late 50's. He'd picked it up, with the admonition that "the Marines never forget" from one of his grizzled old Sergeants, who had been charged for coffee by the Red Cross after the war and never forgave them.
When I was in the Army, everyone hated the Red Cross, although the reasons shifted depending on who you ask. I've never heard about the doughnuts before. Most commonly, other soldiers claimed that they sold donated blood, although how true that is, I don't know.
Yes, The Red Cross and almost all blood donor clinics sell their blood for hundreds of percent in markup. NPR also had a good series on that too:
https://www.npr.org/2011/06/10/136931615/blood-bones-and-org...
It's not just blood. If you donate your organs, those are also sold. And the cost of the donated blood or organ is passed on to the recipient (or their insurance at least), probably with additional markup.
There is much, much more recent reporting on this matter. Blood and blood plasma make up something between 1.5% and 2.5% of the United States' exports. Which is weird.
https://www.npr.org/transcripts/582509923?storyId=582509923?...
https://www.newsweek.com/two-percent-us-export-income-blood-...
https://www.npr.org/transcripts/582509923?storyId=582509923?...
https://www.newsweek.com/two-percent-us-export-income-blood-...
> Was this grudge instilled in children?
Oddly enough, probably yes. The military is a family business, something like 80% of servicemembers have a family member who served. So grandpa bitches about that time back in 1944 when he had to pay for donuts, and you make sure all your buddies know about it.
Oddly enough, probably yes. The military is a family business, something like 80% of servicemembers have a family member who served. So grandpa bitches about that time back in 1944 when he had to pay for donuts, and you make sure all your buddies know about it.
Institutional memory is a powerful thing, and forms a part of the identity of any members of an organisation with a strong culture.
It's not about "used to be free." The Red Cross regularly shows up wherever there are people in need and charges them for things of negligible value. Years ago I was in a natural disaster where the power was out. The Salvation Army was handing out free blankets and hot meals but the Red Cross was charging for cups of coffee.
They are still like that to this day. No deep historical knowledge required.
They are still like that to this day. No deep historical knowledge required.
Sounds particularly relevant given the recent Wink pivot that's being called 'ransomware'.
> "Imagine, for Thanksgiving, you go to your parents' for dinner and after a nice dinner they say, 'That's going to be $10 per person,' " Simonsohn says. "You would be upset."
LOL, my first ex-wife's mother would charge $40/person for hosting the mandatory Thanksgiving dinner, after people also contributed in the way of co-ordinated sides, fixings, beverages.
By the way, $40/person in the 90's.
And no she was not poor, and nobody in the family was flush with cash.
LOL, my first ex-wife's mother would charge $40/person for hosting the mandatory Thanksgiving dinner, after people also contributed in the way of co-ordinated sides, fixings, beverages.
By the way, $40/person in the 90's.
And no she was not poor, and nobody in the family was flush with cash.
> my first ex-wife
Now you have me wondering how many ex-wives you got! Sorry but couldn't resist.
Now you have me wondering how many ex-wives you got! Sorry but couldn't resist.
Both of my grandfathers retired SMSgts and I have two veteran flag cases above the monitor where this was typed.
According to my late paternal grandparents, who went through WWII, Korea, and Vietnam on active duty (and arguably the wives did as well), the American Red Cross had not-so-nice aspects to it that didn't get much press.
Perhaps national governments should support apolitical, non-religious volunteer nonprofits more, but I can also understand the need for nonprofits to survive (which may often entail charging small fees). Charging people for doughnuts who don't make much money to begin with, are first-responders, active-duty military, or individuals who just went through a disaster seems kind of uncool where I come from.
It's difficult to say how good they are today without first-hand and multiple accounts of experience. The available data shows they presently spend 3.5% ($104m) on admin and 6% ($177m) on fundraising. https://www.charitynavigator.org/index.cfm?bay=search.summar...
As an example, Feeding America, although they pay their CEO 16% more ($100k+), is a mostly better charity on paper.
According to my late paternal grandparents, who went through WWII, Korea, and Vietnam on active duty (and arguably the wives did as well), the American Red Cross had not-so-nice aspects to it that didn't get much press.
Perhaps national governments should support apolitical, non-religious volunteer nonprofits more, but I can also understand the need for nonprofits to survive (which may often entail charging small fees). Charging people for doughnuts who don't make much money to begin with, are first-responders, active-duty military, or individuals who just went through a disaster seems kind of uncool where I come from.
It's difficult to say how good they are today without first-hand and multiple accounts of experience. The available data shows they presently spend 3.5% ($104m) on admin and 6% ($177m) on fundraising. https://www.charitynavigator.org/index.cfm?bay=search.summar...
As an example, Feeding America, although they pay their CEO 16% more ($100k+), is a mostly better charity on paper.
I tend to make all my stuff open-source and free. I have no intentions of ever charging for it.
I do this for a couple of reasons:
1) "Brand-building." I'm developing a "personal brand," and I do it for a similar reason as companies give away free T-shirts with their logo.
2) Lead by Example. I have a beef with the quality of most software, these days. I have decided not to whine about it.
Instead, I just write my own software the way that I think it should be written, and leave it out there. Since quality isn't really a coefficient in most developers' minds, these days, it doesn't get much attention; which is fine by me.
So...sort of "virtue signaling," but in an even more passive-aggressive way.
I also have a personal policy of making all my work public, because I am used to it, and I think that it helps me to write better software. You always vacuum before the in-laws visit.
I would never charge for my open source (MIT-Licensed) work, but I also put the source up there for the stuff I do charge for (a tiny pittance). It isn't licensed for reuse, but it's out there.
If someone hires me to write proprietary software, then I won't put it out there (unless that's what the customer wants). I did a great deal of "behind the firewall" work that is likely to never see the light of day (indeed, much of it was in products that were never even officially released).
Otherwise, I'm likely to keep putting my work out there for free; whether or not anyone else cares.
I care.
I do this for a couple of reasons:
1) "Brand-building." I'm developing a "personal brand," and I do it for a similar reason as companies give away free T-shirts with their logo.
2) Lead by Example. I have a beef with the quality of most software, these days. I have decided not to whine about it.
Instead, I just write my own software the way that I think it should be written, and leave it out there. Since quality isn't really a coefficient in most developers' minds, these days, it doesn't get much attention; which is fine by me.
So...sort of "virtue signaling," but in an even more passive-aggressive way.
I also have a personal policy of making all my work public, because I am used to it, and I think that it helps me to write better software. You always vacuum before the in-laws visit.
I would never charge for my open source (MIT-Licensed) work, but I also put the source up there for the stuff I do charge for (a tiny pittance). It isn't licensed for reuse, but it's out there.
If someone hires me to write proprietary software, then I won't put it out there (unless that's what the customer wants). I did a great deal of "behind the firewall" work that is likely to never see the light of day (indeed, much of it was in products that were never even officially released).
Otherwise, I'm likely to keep putting my work out there for free; whether or not anyone else cares.
I care.
Free and open source licenses are really useful. Works licensed like that are worth significantly more to me that works that aren't licensed like that. Of course, charge whatever you want for your code, but I don't think you should avoid charging for code that has an MIT license. Quite the contrary!
Fair 'nuff, but I'm not in this for the money.
I know that makes me a bit of an "outlier" in the tech industry, but I guess I'm a bit of a "throwback."
I enjoy sharing, and I enjoy shipping apps. It's my dream to code for free; and I'm just about there.
Writing the code I want to write, without having people deliberately spike the development process, is kind of fun.
I mention my outlook here: https://medium.com/chrismarshallny/thats-not-what-ships-are-...
BTW: I've enjoyed reading a lot of your comments. You like to write.
I know that makes me a bit of an "outlier" in the tech industry, but I guess I'm a bit of a "throwback."
I enjoy sharing, and I enjoy shipping apps. It's my dream to code for free; and I'm just about there.
Writing the code I want to write, without having people deliberately spike the development process, is kind of fun.
I mention my outlook here: https://medium.com/chrismarshallny/thats-not-what-ships-are-...
BTW: I've enjoyed reading a lot of your comments. You like to write.
Thank you. I do like to write. I'm also really happy when people read what I write. It looks like we have a lot in common based on what you've written there. If you'd ever feel like trying out pair programming (remotely), give me a shout!
Same is with Free Software. On one hand it is nice that you are receiving so much value for free, on the other all business models revolving around it contradict basic sales principles and are wildly unsuccessful.
So for example, I use horrible debuggers like GDB in 2020, because there is no company that is willing to put that much effort and take that much of a risk into developing a better tool debugger, since there are no profit incentives around it. You cannot really expect developers to pay for their tools in 2020 and that is both good and bad.
So for example, I use horrible debuggers like GDB in 2020, because there is no company that is willing to put that much effort and take that much of a risk into developing a better tool debugger, since there are no profit incentives around it. You cannot really expect developers to pay for their tools in 2020 and that is both good and bad.
If you have a service where the free deal was too good to be true, then it works. I am not salty at the New York Times. I pay for the subscription and it is well worth it.
Also, now I want a coffee and a doughnut, goddamn it. Is Dunkin still open in quarantine?
Also, now I want a coffee and a doughnut, goddamn it. Is Dunkin still open in quarantine?
They’re open and oddly enough they’re currently doing a “Free Donut Friday” promotion...
I didn't listen to the audio version of the posted link, but it's 5 minutes long and seems to be an excerpt of this 20 minute episode of Planet Money:
https://www.npr.org/2020/01/08/794592539/episode-386-the-cos...
Transcript: https://www.npr.org/transcripts/794592539
https://www.npr.org/2020/01/08/794592539/episode-386-the-cos...
Transcript: https://www.npr.org/transcripts/794592539
NPR’s headline is misleading—the problem was not free doughnuts, it was charging (briefly) for doughnuts. In any case, fascinating; thanks for posting.
It's not misleading. Free doughnuts were part of the problem. The British soldiers were upset that they had to pay for their snacks while the American soldiers were receiving theirs for free, and it caused tensions. The free doughnuts helped to cause that imbalance and tension, which led to charging for the snacks.
One wonders what the alternative-history narrative would be
if the US had offered to pay the Brits for their soldiers’ snacks? Perhaps the common UK complaint about US soldiers
in WWII would have been: overpaid, oversexed, overweight, and over here. :-)
With lend-lease, I can imagine at least some of it was already subsided
In that case, the British charging for donuts was part of the problem too.
Maybe British soldiers being upset was only half of the situation: Maybe American soldiers in turn felt better to have such a benefit over British soldiers?
I volunteered for the Red Cross for about 3 years in the 1990s and probably heard this two dozen times from from random people when they saw the logo.
Reminds me of the Google situation with Reader.
Anyone remembers the drama that happened when JetBrains announced they're switching to subscription model with their IDEs? That's also a categorical change: from a product, to a service.
After a deserved backlash, they fortunately backtracked and allowed people to buy perpetual licenses. But it left a bad taste.
After a deserved backlash, they fortunately backtracked and allowed people to buy perpetual licenses. But it left a bad taste.
It may be irrational, but I have a visceral hatred for people who make something free online and then take it down after they find a way to charge for it, especially if the community they were posting it on collaborated with editing, feedback, and suggestions.
One of the most demotivating experiences I had as an employee was when my employer put me on a commission scheme then did everything they could to wriggle out of paying the commission. They would have been better off not offering it in the first place.
One nit-pick.
Per Wikipedia, "member stations derived 6% of their revenue from federal, state and local government funding, 10% of their revenue from CPB grants, and 14% of their revenue from universities"
NPR is most certainly not 'free'.
Per Wikipedia, "member stations derived 6% of their revenue from federal, state and local government funding, 10% of their revenue from CPB grants, and 14% of their revenue from universities"
NPR is most certainly not 'free'.
I am amazed at how good the no-cookie experience is. You get a readable, basic-HTML formatted article, and nothing else. And that is - go guess? - exactly what you wanted for reading an article. +1
[deleted]
I think this is the first time I thought TSNM; Too Short, Need More
Here's the solution. And it applies to Red Cross and other related enterprise changing from free to paid.
1. Stop giving away doughnuts 2. Start selling funnel cakes
1. Stop giving away doughnuts 2. Start selling funnel cakes
"veterans don't like the Red Cross ... he always got the same answer: the doughnuts."
For my dad it was the apples. "Shriveled and all dried out."
For my dad it was the apples. "Shriveled and all dried out."
I thought the regret would be diabetes and heart disease.
[deleted]
So npr.org won't let me read unless I agree to be tracked. Which is illegal under GDPR, I think.
But in any case, I've realized something. In the URL, just replace "https://www.npr.org/sections/money/2012/07/13/" with "https://www.wbur.org/npr/" and the damn page just loads.
So I picked another npr.org article recently posted to HN: https://www.npr.org/2020/05/06/849996451/what-hamburgs-misst...
And yes, this URL loads without challenge: https://www.wbur.org/npr/849996451/what-hamburgs-missteps-in...
So hey :)
But in any case, I've realized something. In the URL, just replace "https://www.npr.org/sections/money/2012/07/13/" with "https://www.wbur.org/npr/" and the damn page just loads.
So I picked another npr.org article recently posted to HN: https://www.npr.org/2020/05/06/849996451/what-hamburgs-misst...
And yes, this URL loads without challenge: https://www.wbur.org/npr/849996451/what-hamburgs-missteps-in...
So hey :)
Troops and cops are the most aggrieved people in the world.
Meetup folks can learn a lesion or two from this.
(2012)
This is something I have thought a whole lot about. I blog and I want that information freely available, but I also need an income. I don't have a problem with the fact that people on HN actively find ways around paywalls which I think people on HN tend to find surprising because I spend so much time criticizing the idea that "You people want good writing and you want it all for free, so you basically expect writers to be slave labor for you."
What I'm saying is that this is not an easy problem to solve because in any business, some of the things you provide will be provided for free. For example, businesses that serve food have bathrooms available for free.
In busy downtown areas or areas with a lot of homelessness, you will see local establishments with signs saying the bathroom is for customers only and some even have security codes so you can't just walk in off the street and head to the bathroom. But they don't charge for use of the bathroom.
If you are a small shop, figuring out what to do for free and what to do for pay is a thorny issue because time is money and it's easy to end up in a situation where you are de facto slave labor.
For some businesses on the internet, your members who are there because it is free can be part of the value you are bringing to the table and if you try to charge and you drive those people away, you may kill the business because now your paying customers have no reason to pay you. The membership base was part of your value position and you've just thrown the baby out with the bath water.
So before you go acting like businesses who give stuff away for free are somehow nefarious actors, stop and realize that successful businesses have to pursue models that are viable and those models have real world factors. This is not just something decision makers at companies can arbitrarily decide willy nilly. You need to be taking the landscape of your marketplace into account when trying to figure out what piece of your product is the piece you charge for or monetize and what piece is something you give away for free.
Historically, TV was free to viewers. You just needed to own a TV, but subscription channels came later. It got monetized with advertising and having a large audience helped you monetize it. That large audience was valuable to your advertisers, so giving it away for free to viewers was part of how you made your money.
So this model wasn't born with the internet. It existed before the internet. And there are valid arguments to be made concerning things like "If you aren't paying for it, you are the product, not the customer" and lots of different angles to look at such questions.
But at the end of the day, there is no free lunch. You somehow need to pay the bills. And sometimes the method that actually works effectively isn't as straight forward as "Well, just charge people for using the darn thing." Sometimes that doesn't work at all and in other cases it may work, but will limit your growth. Sometimes giving part of it away for free is how you grow to the point of being able to make serious money.
What I'm saying is that this is not an easy problem to solve because in any business, some of the things you provide will be provided for free. For example, businesses that serve food have bathrooms available for free.
In busy downtown areas or areas with a lot of homelessness, you will see local establishments with signs saying the bathroom is for customers only and some even have security codes so you can't just walk in off the street and head to the bathroom. But they don't charge for use of the bathroom.
If you are a small shop, figuring out what to do for free and what to do for pay is a thorny issue because time is money and it's easy to end up in a situation where you are de facto slave labor.
For some businesses on the internet, your members who are there because it is free can be part of the value you are bringing to the table and if you try to charge and you drive those people away, you may kill the business because now your paying customers have no reason to pay you. The membership base was part of your value position and you've just thrown the baby out with the bath water.
So before you go acting like businesses who give stuff away for free are somehow nefarious actors, stop and realize that successful businesses have to pursue models that are viable and those models have real world factors. This is not just something decision makers at companies can arbitrarily decide willy nilly. You need to be taking the landscape of your marketplace into account when trying to figure out what piece of your product is the piece you charge for or monetize and what piece is something you give away for free.
Historically, TV was free to viewers. You just needed to own a TV, but subscription channels came later. It got monetized with advertising and having a large audience helped you monetize it. That large audience was valuable to your advertisers, so giving it away for free to viewers was part of how you made your money.
So this model wasn't born with the internet. It existed before the internet. And there are valid arguments to be made concerning things like "If you aren't paying for it, you are the product, not the customer" and lots of different angles to look at such questions.
But at the end of the day, there is no free lunch. You somehow need to pay the bills. And sometimes the method that actually works effectively isn't as straight forward as "Well, just charge people for using the darn thing." Sometimes that doesn't work at all and in other cases it may work, but will limit your growth. Sometimes giving part of it away for free is how you grow to the point of being able to make serious money.
My head says people should pay for things, my heart says soldiers ought to get free coffee and doughnuts.
>The problem isn't the price
Price was absolutely the problem. Soldiers were paid about $600 year. Not much for a job where you risk your life and dont have much of personal freedom or comfort.
Free food was part of benefits. Charging soldiers for it seems ludicrous, they can not just leave, and go to nearest cafe.
Price was absolutely the problem. Soldiers were paid about $600 year. Not much for a job where you risk your life and dont have much of personal freedom or comfort.
Free food was part of benefits. Charging soldiers for it seems ludicrous, they can not just leave, and go to nearest cafe.
> "Free food was part of benefits"
The Red Cross is a civilian organization that is not part of the army and was not, as far as I know, obligated to provide free donuts or coffee.
The Red Cross is a civilian organization that is not part of the army and was not, as far as I know, obligated to provide free donuts or coffee.
Army asked for it, anyway politics are irrelevant to feelings.
Pay was $50 a month, doughnut was 2 cents, that is like 1% paycut.
Pay was $50 a month, doughnut was 2 cents, that is like 1% paycut.
Think of a random cafe offering complementary free donuts to veterans, and then deciding (or being told) to start charging for them. The Red Cross was not a perk provided and paid for by the army. It's really not that outrageous.
The US Army leadership asked the Red Cross to start charging. The problem was the Red Cross was only giving free donuts to US soldiers, and this was causing the other nations' soliders fighting on the Allied side to be upset. Apparently their civilian population wasn't as generous as the US supports of the Red Cross. So getting rid of the free donuts was to avoid "dissension in the ranks".
Why couldn't the Red Cross just give free Doughnuts to everyone? I'm not sure; maybe because they collected the money for "support our troops", and supporting the Brits might have been considered a violation of the terms for which the monies were donated.
Why couldn't the Red Cross just give free Doughnuts to everyone? I'm not sure; maybe because they collected the money for "support our troops", and supporting the Brits might have been considered a violation of the terms for which the monies were donated.
I think you're misunderstanding. The Red Cross isn't the catering organisation of the Army. It's just a private organisation.
There was a time when they charged for data points/performance traces ingested into the system. At our scale, we were paying around $100/month. We were prepared to scale that to their, I think it was, $550/month plan when our usage got that high.
They relatively recently changed their structure to charge per registered user. This would have raised our bill to around $1500/month at our current scale, to get all of of the stakeholders in there.
This is a cost incongruent with the value we were getting out of it. Even a ~$500/month price tag does not correlate with the value received, at our scale. It would one day (its a great product), but not today. So, today, we have two employees who have access to that, keeping our spend the same.
Here's the key component of this pricing change though: They will, no longer, be able to grow revenue with us. A pricing change forced us to make organizational changes. Those organizational changes mean that fewer people are seeing any value the product could deliver. When fewer people see the value, then the product has fewer advocates within the organization; its fungible utility will eventually be rolled into a competing product we already pay for, like Datadog, even if the experience is worse, because when we discuss Engine its always prefaced with "Oh, I think Dave in ops uses that, no one else does".