Thursday, June 29, 2006

How the distribution of money affects consumer decisions

I'll just give two examples here:

Speed-dating agencies in the UK charge about £20 per person per evening, where an evening might be attended by around 30 people. To put on an evening of this kind, they need probably less than a handful of their own staff, plus an arrangement with the venue (which is probably easily arranged, since the customers will be buying drinks - the venue is typically a reasonably fashionable bar).

Takings of £600 for an evening clearly outstrip the costs by a wide margin, I imagine in the region of 50-200% margin depending on the exact circumstances. Why are we willing to pay that much? Would you want to attend a meeting whose stated purpose is finding a social and sexual partner knowing they had paid less than 20 quid?

Example number 2. People often pay a premium of up to 100% on the top food brand as opposed to the store brand or an unmarketed "brand". Why? Because the industry leader is rich enough to take measures that ensure the quality of the product and avoid a lawsuit brought by customer. An attempt to build an alternate brand if the first one is tarnished would be unlikely to succeed. A brand that has not spent money on advertising can more easily recover.

I'm sure there are more business opportunities that could be built around these general principles.

Friday, June 09, 2006

Scratchy no sell

To my mind, the craze to personalise items is a scam by hardware vendors to prevent resale of products. One might wonder whether Apple's scratchy iPod screens fall into the same category.

Speeding up Firefox

Things to try:

Fasterfox extension - for all platforms
Firefox builds optimised for various Mac platforms - e.g. Firefox builds
Swiftfox - Linux builds for specific AMD and Intel processors

Friday, June 02, 2006

PC upgrades: why little makes a difference

People may reasonably marvel why they should pay much extra for having an 60GB rather than a 40GB hard drive, or a 2GHz processor rather than 1.8GHz. On the face of it, the price may seem designed for people who want the best, and the abstaining consumer may be proud to be a member of the less easily fooled. However, do consider that your operating system may consume some 10GB of hard disk space, so now you get 50GB rather than 30GB. Sounds better already? The same goes for RAM (memory); it is anticipated that the next Windows version may consume as much as 512MB of memory just to run. So if you bought 2GB total memory rather than 1GB (as a hypothetical future example, these configurations would currently be thought unusually performant *cough*), you'd have 1.5GB free vs. 512MB. Quite a difference, non? You've suddenly gone from factor 2 to factor 3.

Thinking about CPU speed is slightly more complex, because the benefit depends whether your system usage scales with the clockspeed or not. If you have lots of CPU intensive services running at regular intervals (such as a web server, not unheard of!), you will benefit from having those extra 200MHz extra, although whether you realise this, and are actually more efficient because of it, is up to you to assess. However, personally, choosing between a 1.83GHz and a 2.16GHz CPU, I would always go for the lower end. For many years, chip manufacturers like Intel have worked hard to make us believe that your computer's performance depends crucially on the clockspeed. Experts know that RAM is more important, and stuff their machines full of it. (This is partly the fault of PC sellers, who will invariably package the smallest amount of RAM that will keep the machine going. Currently, this would be 512MB. Even 768MB will give you markedly better performance, and may cost you less than a 100 GBP to upgrade!)