Joel Leaving me Confused

Ok, I just read Joel’s Camels and Rubber Duckies post and I have to agree with him. In the middle he had me believing that we are going somewhere and now I am finished and that feeling is gone ;) Ok, not totally really because he talks about pricing products and that is majorly important especially if you transfer it over to services. In my case that would be a mix of service and product even but lets not get started with that.

The thing is that he talks about consumer surplus, the difference between what a consumer would be willing to pay and the lesser amount he pays. As he correctly mentions, if I could sell my product to everyone at the price they are willing to pay, provided all that is above my variable costs, then I would make the most profit, provided again that the demand curve is correct and my market research is correct in determining how many people will buy at what price. But when we think about market research and things, asking consumers questions they don’t really know the answer to, then we should all probably wait for Blink to get out.

All in all Joel’s article is a great read though and it surely gets you thinking about this kind of stuff. NPV is another nice thing and what about the option to do ROI pricing, if that is possible in some cases. That should nicely scale too, especially to bigger companies. In Joel’s case with FogBUGZ, he could be charging % of time saved. Of course, that is a little bit hard to measure. :)