

Fatboy In A Lean World - gordonguthrie
http://www.oreillygmt.eu/interview/fatboy-in-a-lean-world/

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gordonguthrie
I wondered what the effect of posting a single long article would be.

I would appear that it tends to suppress comments. 18 points and tweeted 20
times in 2 hours - but no comments :(

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cullenking
There's too much information across too many trains of thoughts...I can't
formulate a response or an opinion before it jumps to another train of
thought. This is sad, because it's a bunch of great information with some
strong discussion possibilities.

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gordonguthrie
I know, but I am getting bored of the reverse - reading bitesized bits of
stuff that leaves you disatisfied, so I thought I would 'go large'...

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cullenking
Maybe release it all on the same day, so the information is available but it's
more compartmentalized. It would encourage blog comments at least.

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fraserharris
Gordon, fantastic post. You've covered a lot of ground, with some great
anecdotes - I love the if.com stories. Your (i assume) diagram linking the
'emerging startup business stack' is useful for explain lean to non-believers.
I've made this required reading for my whole team.

Could you expand on the demand curve you've included?

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gordonguthrie
Sure. The demand curve shows the number of people who will purchase an object
as a function of price.

Typically the number of purchasers is high at low prices and decreases as the
price goes up.

The value of the market is the area under the curve - so the exact shape of
the curve matters a lot.

The shape of a demand curve can be odd. If you look at the graph the third
demand curve has a 'hump' in it. This is characteristic of products like
'jeans' where a lot of people buy cheap jeans, but a significant number will
only buy 'designer' and won't purchase at lower prices.

Basically all demand curves are very similar at the low-price end. People will
take home stuff from hotels that they would never purchase, pens, notepads,
rubbish wee shampoo bottles...

If you are doing a startup it is important to look up the demand curve and try
and figure out what someone will actually pay for.

In addition you have to shape the demand curve. The demand curve for designer
jeans doesn't have some sort of 'geographical' hump in it - the people who
make designer jeans made that hump by a variety of cultural and other means.
In order to start shaping the demand curve (and shaping your product to
possible demand curves) you need to be trying (and failing) to sell up the
demand curve in the interesting bit...

There is a big confusion about prices out there. People say 'oh, Twitter is
free' when what they mean is 'the users are the product, Twitter's customers
are other companies who want to buy data...' People also talk about Freemium
as a price when in fact it is a marketing cost (if I give free stuff worth $10
to 9 people, the 10th will buy for $100 leaving me $10 clear).

The takeaway is: go and ask an outrageous amount for your half-baked, crappy
prototype. The reasons people will give you for not purchasing are all vital
info.

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fraserharris
The jeans analogy is great - thanks.

