Some corollaries to the charging problem

June 4, 2008

Here's a couple of corollaries and effects of the charging problem that are worth mentioning (or at least that occurred to me).

The obvious corollary is how much more sensible the problem makes the 'give away the service to build interest' approach often used by Internet startups. If people can't do anything with you before they spend money, your window to get them interested enough to do so is very limited (probably more or less one web page, at best). Giving them free access gives you a much more extended chance to catch their attention so that they're going to find you attractive enough to give you money.

Next, one effect that's struck me is how the charging problem changes what you need to succeed. Getting great value is essentially an internal technical problem, where you just need to squeeze your costs and your profit margins and so on, and you can work on it in isolation. But making people interested in you is an external social problem (and a hard one), where you must be willing to immediately change your plans in reaction to what happens around you (and thus must be willing to rapidly throw away things that you thought were great ideas and may be quite invested in).

Or to put it another way, you can't just make something that's good and cheap, you have to make something that people care about. Technical people are good at the first, because it is mostly amenable to their skills, but traditionally not all that good at the second.

(And this is one reason why the world is full of technical people plaintively going 'but I have a better mousetrap, and it's cheap too!')

Written on 04 June 2008.
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Last modified: Wed Jun 4 23:48:03 2008
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