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The cup-of-coffee pricing fallacy

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Re: The cup-of-coffee pricing fallacy

#41

Post by buzzerbetrayed »

mercer wrote: post #28
notyourday wrote: post #7

Earlier quoted context omitted.

You are unlikely to be a customer of a paid-for commenting service as the alternative is free. PS. I don't get the downvotes. Someone who says they won't spend $5 on a coffee because they are poor would be willing to pay for commenting feature on their website?! Something that they could get for free ?

> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.

- from the hacker news guidelines, for those like me who didn’t immediately realize this

Re: The cup-of-coffee pricing fallacy

#42

Post by pembrook »

NikkiA wrote: post #2

I've always hated it because it makes the assumption that everyone is at the same position in the class hierarchy - I'm poor, the last time I drank a coffee shop coffee was something like 8 years ago and even then it was bought for me by my psychologist, your 'cup of coffee a day' price just sounds extravagant to me.

But if you’re poor...you’re probably also not in the market for a $100/m B2B Saas product.

Re: The cup-of-coffee pricing fallacy

#43

Post by richk449 »

Article misses the fallacy of the comparison. If I buy a cup of coffee, I get my end of the bargain immediately* and no further commitment on my part is needed. For most saas offerings though, I’m basically committing to a regular payment in perpetuity. Usually if I stop paying, I not only lose the immediate benefits, but also whatever I have put into the app in the time I used it. Even if it is just storage, if I cancel it, I have to find a way to replace the storage and the access to the storage from my devices.

Committing to a monthly payment is usually not the same as buying X coffees for a month.

*or close to immediately if it is one of those annoying poor over places

Re: The cup-of-coffee pricing fallacy

#44

Post by derriz »

kaoD wrote: post #37
WalterBright wrote: post #35

I drink a pot of coffee a day, which works out to around $.03 per cup. Pretty cheap for that vice. I know that Starbucks tastes better than my drip machine, but I don't really care. Coffee is coffee to me, java junkie that I am.

Just get an espresso machine (the real ones, no capsules) and a bean grinder. Coffee from freshly-ground beans tastes way better than Starbucks, is still $.03 per cup and takes only a few seconds to make with an electric grinder. Moka pots work too and are cheaper (though espresso machines are real cheap at least here in Europe) but the coffee isn't as creamy and it takes a few minutes to boil (even though it needs n…

"A few seconds to make" is a slight exaggeration no? I had such a grinder/Gaggia set-up and it took time and effort. Producing good espresso at home without very expensive automated machines, is a commitment.

There's a lot of fiddly cleaning involved - the grinder has to be cleaned meticulously after use as do the various bits of the espresso machine. The finely ground coffee is very sensitive to static so tends to jump/attach itself to white t-shirts and plastic kitchenware - more cleaning. All this cleaning is required even if you just want to make one espresso - otherwise later uses will have a nasty taint.

There's a lot of experimentation required to produce a decent espresso with crema from such a set-up. Depending on the beans, their age, the weather, etc., the fineness for grinding and how tightly you packed the portafilter would vary. On good days I was getting 3 out of 4 but that still meant 1 in 4 (or more) were dreck.

Re: The cup-of-coffee pricing fallacy

#45

Post by 8bitsrule »

kaoD wrote: post #37
WalterBright wrote: post #35

I drink a pot of coffee a day, which works out to around $.03 per cup. Pretty cheap for that vice. I know that Starbucks tastes better than my drip machine, but I don't really care. Coffee is coffee to me, java junkie that I am.

Just get an espresso machine (the real ones, no capsules) and a bean grinder. Coffee from freshly-ground beans tastes way better than Starbucks, is still $.03 per cup and takes only a few seconds to make with an electric grinder. Moka pots work too and are cheaper (though espresso machines are real cheap at least here in Europe) but the coffee isn't as creamy and it takes a few minutes to boil (even though it needs n…

Honestly, I drip-brew a pot a day for the caffeine ... and coffee flavor. Fresh grind is better, and the Espresso/French press/etc stuff often tastes better. But day after day, year after year? too much fuss. When you need a transfusion, ASAP is the best way.

Re: The cup-of-coffee pricing fallacy

#46

Post by gnicholas »

This article frames the cup-of-coffee pricing comparison as: "$100/mo is less than a cup of coffee every day". But I most frequently see the comparison as: "$5/mo means giving up just a cup of coffee once a month".

In this formulation, I think it's a pretty reasonable comparison, since a prospective user doesn't have to sacrifice much (just a semi-luxury item, one day a month) in order to use your service. The author's criticisms don't seem to hold as much purchase (no pun intended) in this context.

I'd be curious to know if others think of cup-of-coffee pricing as $5/mo or $5/day. The only context where I can remember hearing per-day pricing is life insurance or supporting a child in a developing country.

Re: The cup-of-coffee pricing fallacy

#47

Post by OJFord »

nunez wrote: post #29

I hated this assumption too, but for different reasons. First, the price for a plain old cup of coffee at Starbucks differs from region to region, but it usually normalizes at around $1.80 (taxes included). Refills are $0.52. While, yes, Starbucks’s coffee-based offerings (like lattes) are more expensive, coffee from Starbucks is quite cheap and VERY consistent (and cheaper than at a mom and pop coffee shop). Second,…

> First, the price for a plain old cup of coffee at Starbucks differs from region to region, but it usually normalizes at around $1.80 (taxes included). Refills are $0.52.

That sounds really cheap, or what's a 'plain old cup of coffee' - does Starbucks sell filter coffee over there?

Re: The cup-of-coffee pricing fallacy

#48

Post by hsitz »

richk449 wrote: post #43

Article misses the fallacy of the comparison. If I buy a cup of coffee, I get my end of the bargain immediately* and no further commitment on my part is needed. For most saas offerings though, I’m basically committing to a regular payment in perpetuity. Usually if I stop paying, I not only lose the immediate benefits, but also whatever I have put into the app in the time I used it. Even if it is just storage, if I ca…

I think the article did discuss your point, "But [with a cup of coffee] nowhere am I asked to 'subscribe' to anything. I buy it, enjoy it, and that’s it. I’m not committed to buy another cup ever again."

Maybe you wanted him to emphasize that particular aspect more.

Re: The cup-of-coffee pricing fallacy

#49

Post by war1025 »

notyourday wrote: post #6

I'm the person who has been quoted. The person whom I addressed that was going to run a business selling access to a commenting feature . https://news.ycombinator.com/item?id=22209411 The competition for that feature is free comments via Facebook so anyone who does not want to spend money has that ability. The other set of "competitors" is accessed for free via open source software that one can install. As soon as th…

> People who go out in those cities 4-10 times a month are the same people who have a daily Starbucks/La Colombe/Joe's Coffee/Pete's Coffee habit

I have a daily coffee habit precisely because it's significantly cheaper than having an eating out habit, while providing me with the same or better satisfaction.

Re: The cup-of-coffee pricing fallacy

#50

Post by naniwaduni »

richk449 wrote: post #43

Article misses the fallacy of the comparison. If I buy a cup of coffee, I get my end of the bargain immediately* and no further commitment on my part is needed. For most saas offerings though, I’m basically committing to a regular payment in perpetuity. Usually if I stop paying, I not only lose the immediate benefits, but also whatever I have put into the app in the time I used it. Even if it is just storage, if I ca…

Coffee, as a somewhat addictive substance, makes a better than usual metaphor for SaaS.
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