Racing To the Top


I found this on Seth Godin’s Blog: A dollar more (vs. a dollar less):

But what happens if Lyft (or your project) decides to race to the top instead?

What if they say, “we’re always a dollar more than Uber”?

And then they spend that dollar, all of it, on the drivers…

Seth’s ellipsis has to be filled by you, the reader. What will happen? What do you think?

I think the users will expect drivers to be a little bit happier. Higher pay is always nice. The downside for me? I have to pay a dollar more. But at least I know that it goes where it’s needed instead of sinking into the infrastructure. What’s a dollar, anyway!

Remember that this mindset is not equally shared among all socio-economic groups. In Germany, I’d say this mindset is mostly employed by academics and students, or “alternatives.” It’s some kind of luxury: not having to turn every nickel twice before spending it. It’s counter-intuitive that students pay attention to these kinds of values since they don’t have that much money after all. Be as it may, poor people likely won’t enjoy spending more and won’t identify with the cause.

So what’ll happen? You attract a different kind of people because of your principles. Sticking to Seth’s example, the Lyft which pays its drivers the additional $1 will attract people who pay attention to company values while the “discount” service Uber attracts more of the troublemakers.

The Mac blogosphere is full of people praising paid software upgrades: “I’d gladly pay you (more)!” is a phrase I stumble upon a lot, it seems: these people rather pay for a service than get it for free only to see it being shut down later. This mindset of paying more for higher quality products may be the result of a selection bias. Mac users pay more for their computers. Paying for their beloved software doesn’t hurt as much. (Also, I still find Windows software ugly and clumsy in comparison in 2016.)

You’re a developer. You decide how to place your product.

You can create a commodity product, charging a few dollars to attract more people. The thing is that among these customers a lot will complain when their needs aren’t met. (Or so the story goes.)

Or you create a “pro app,” charging a lot more. And thus you attract those who value good software and pay more to support development. To some of them, purchasing software is an investment in a relationship.

Higher price with a good reason for the prica tag can be a message on its own. There are people who’ll listen. Chances are you want to get to know these folks and make their lives better because it’s so much nicer to cooperate.