marketing

Paul Boddie paul at boddie.org.uk
Mon Dec 17 18:04:10 EST 2012


On Monday 17 December 2012 08:46:00 Christoph Pulster wrote:
> > he felt he was sabotaging Open Hardware development
> > by confirming those "race to the bottom" price expectations.
>
> My philosophy of price tags is much more simple: no customers = lower
> the price. The Nanonote is a nice-to-have gadget for Linux geeks, no
> more, no less. 99 eur is the maximum guys want to spend for this
> toy.

I imagine that if we had a survey of potential customers, there would be a few 
main groups:

People who want one, if only to support the project, but who can't afford it 
or justify the cost.

People who can afford one but who feel bad about acquiring another gadget they 
may not end up using, especially if they also want a smartphone or something 
that overlaps with what the NanoNote provides.

People who can afford one and who will buy one to support the platform and 
anything that emerges from it. Perhaps they also have an interesting project 
that the NanoNote might fit in well with.

Particularly the reasoning that sounds like "I can't justify getting one as 
well as a smartphone" is worth exploring. While thinking about this, and the 
other smartphone-related objection ("The Galaxy S3 is only $5 on a contract 
whereas the NanoNote is $149!"), it occurred to me that people are closer to 
accepting Werner's subscription-related model than they probably realise.

When one suggests a "non-market-oriented" approach like people giving money to 
an initiative that they identify with, this can attract criticism from people 
who think all solutions should be market-oriented transactions and who equate 
anything else with "communism", and so you have the rise of the pledge model 
where the people giving the money can pretend that there's still a concrete 
transaction about to happen. But the idea of providing a reliable stream of 
funding isn't unique to the community-oriented world: it's what drives the 
very model that permits operators to offer handsets/smartphones at apparently 
low prices.

Companies in various industries have become a lot more like finance sector 
companies. When a mobile operator "sells" a smartphone for $5, they're 
reeling the customer in and will guarantee themselves a revenue of, say, 
$1000 over two years. The various "plans" offer lots of things that 
are "included" but will most likely never be used, and where the customer 
exceeds their limit, they then pay as they go, but even within the limits the 
customer isn't getting a better deal: they're just paying for stuff they 
don't need "up front" and without a refund for stuff they don't use.

It's largely the same with various energy companies, although they don't seem 
to make individuals (as opposed to businesses) pay for energy they don't use, 
but they do sit on the customer's money for a while before refunding the 
difference. Ignoring the dubious sustainability of such business models (in 
many different respects, not limited to the diminishing incentive to 
safeguard limited resources or to not go bankrupt because of a bad quarter), 
such companies are validating the need for a steady income, although they're 
not exactly going to be spending that money on research and development.

So I don't think it's a bad thing to consider other funding models where the 
honestly-priced product model fails to attract customers. After all, 
for-profit businesses seem to have embraced this kind of thing but in a 
largely deceptive way.

> IMO 10.000 units should be sold without any profit. This is the only way  
> to start people developing the thing.

Are there 10000 units in existence? Statistically it might get things moving - 
there may be people who could really run with the concept who just haven't 
had the chance to get one yet - but how do we know that this wouldn't just 
repeat the HP TouchPad fiasco?

> But OpenHardware seems to love to die in poverty.

Just being able to sustain interesting projects would do a lot to improve the 
chances of continual development of open hardware. There are probably people 
with no time to do interesting stuff because they have to do a completely 
different job to pay the bills. Even a small number of such people being able 
to commit to open hardware work would make a huge difference, I think.

Paul




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