The Cost of Free Doughnuts: 70 Years of Regret • Hacker News Board

Re: The Cost of Free Doughnuts: 70 Years of Regret

#161

Post by user5994461 » Thu, May 07, 2020, 9:54 PM UTC

ooobit2 wrote: post #90

013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) 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 char…

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, prici…

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.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#162

Post by Retric » Thu, May 07, 2020, 9:56 PM UTC

jagged-chisel wrote: post #38

Retric wrote: post #18

Earlier quoted context omitted.

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…

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 Dis…

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.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#163

Post by smabie » Thu, May 07, 2020, 10:00 PM UTC

save_ferris wrote: post #23

RandallBrown wrote: post #13

Earlier quoted context omitted.

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 mad…

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.

Isn't this already the case? I order a beer or two on most flights and don't think I've ever been charged.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#164

Post by 013a » Thu, May 07, 2020, 10:01 PM UTC

0xy wrote: post #160

013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) 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 char…

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.

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.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#165

Post by dgellow » Thu, May 07, 2020, 10:06 PM UTC

monadic2 wrote: post #101

tomjakubowski wrote: post #68

Earlier quoted context omitted.

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 am quite curious why business plans themselves are not generally subject to a/b testing....

Hotel and flight companies do that, it’s a terrible user experience.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#166

Post by Retric » Thu, May 07, 2020, 10:13 PM UTC

jedberg wrote: post #120

Retric wrote: post #18

Earlier quoted context omitted.

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…

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 allo…

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.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#167

Post by TaylorAlexander » Thu, May 07, 2020, 10:17 PM UTC

boulos wrote: post #136

karaterobot wrote: post #69

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 equi…

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 bee…

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.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#168

Post by jlawer » Thu, May 07, 2020, 10:19 PM UTC

user5994461 wrote: post #161

ooobit2 wrote: post #90

Earlier quoted context omitted.

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, prici…

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 imp…

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

Re: The Cost of Free Doughnuts: 70 Years of Regret

#169

Post by jedberg » Thu, May 07, 2020, 10:21 PM UTC

Retric wrote: post #166

jedberg wrote: post #120

Earlier quoted context omitted.

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 allo…

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 gif…

> 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

Re: The Cost of Free Doughnuts: 70 Years of Regret

#170

Post by tmpz22 » Thu, May 07, 2020, 10:24 PM UTC

0xy wrote: post #160

013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) 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 char…

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.

> disgustingly grandiose

Just like GraphQL itself.