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Invisible asymptotes (eugenewei.com)
184 points by lpolovets on May 28, 2018 | hide | past | favorite | 46 comments

>Shipping fees.

>People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I'm convinced, so critical to much of how we unlocked growth at Amazon over the years.

>People don't just hate paying for shipping, they hate it to literally an irrational degree. We know this because our first attempt to address this was to show, in the shopping cart and checkout process,

"People hate shipping charges irrationally", because they perceive them as unfair additional tax that distorts price and makes it harder to compare prices. If price was including shipping/vat/taxes as single variable no one would be confused by it. Its not a magic asymptotic limit, its basic psychology: People want simple interfaces, simpler solutions, simpler interactions.

I just got back from Europe. I loved the way that the price of each object was exactly what I paid. The coffee for 2 euros? It actually cost 2 euros.

Now I am in the USA. I go to buy a large coffee for $2.79 and I end up paying $3.10. I hate this very much.

Here right now and it’s nice being able to actually use coins rather than have them be ever-accumulating nuisances as they are in the US. Not that often will you receive/need 0.01 coins and almost everything is priced in multiples of 0.10 outside of supermarkets

Curious how this affects the velocity of M0 money

Well, when you hand over 2 euros that is inclusive of VAT (which if US resident you are not required to pay/entitled to rebate from the government) so the cost of a coffee is not really what's shown.

edit: all the downvotes.. want to reply instead?

I did not downvote you, but I can imagine people are down voting you because you seem to be making an effort to miss the point. The point is taxes are included in prices in Europe, but taxes are not included in prices in the USA.

The biggest issue with taxes, and shipping fees. Is that it becomes this last minute price increase at the very end of your shopping experience. We all know it's there, but it sucks seeing a shipping fee that is half 25% the cost of the item. Give us the full cost up front, if we want it, then we'll take it. But stop wasting our time with only finding out after we've filled our carts.

The tough part about this is you can't calculate the shipping fees until you know where the customer lives. And there's no better way to make customers leave your webstore than requiring a name and physical address before you're even allowed to browse (or be shown prices).

nah zipcode is plenty sufficient. You can easily provide a little message on product pages saying, "want to know the full price?", with an input box for your code. Save it in a cookie. Or location aware?

It's the same as all the prices should be with tax

The problem is that it's hard to make it really look that simple. If you order a number of items at once, the shipping costs can probably be amortized throughout them. It's difficult to make an incentive system that makes customers want to do that without shipping costs.

"People want simple interfaces, simpler solutions, simpler interactions."

Under what circumstances?

Numerous airlines, Southwest excluded, come to mind as an anti-example--moving toward a more complicated, convoluted pricing and buying model for tickets.

What consumers want != what corporations want. If that complex scheme is more profitable, it will be used. Perhaps this interface to buying tickets allows them to segregate the market better or exploit some psychological flaw.

I agree that what consumers want!=what corporations want.

The implicit point in my post above is that consumers are voting with their wallets for the low-cost fares, that are complicated and convoluted. So in this instance of airline tickets, there is large consumer demand for cheap tickets, simplicity be damned.

Southwest is the option for those who want simple and are willing to pay for it.

Amazon gave consumers simple and cheap.

And airlines one of the most hated experiences. It's proving the point.

What about tipping culture then? I wonder if that will go away as ecommerce becomes the norm.

Possible difference: - Shipping charges are presented to the buyer in a visceral way before they commit to the transaction. - Menu prices (sans tip) are presented to a diner and then they commit to the transaction. Later on, the tip rears its ugly head. This time delay is possibly enough for people to separate the tip as "later me's problem", or at least blissfully ignore it.

Also restaurants aren't all exactly the same, so lack of tipping can't be used as a strong point of comparison against their competition.

Two TVs for the same base price, one with $49.99 shipping from Best Buy, and one with free (with prime) from Amazon? I'll go with Amazon because the product is exactly the same.

Those two Italian places down the street, except one of them doesn't do tipping? Sure I'll take that into account, but more importantly, which one has better food? And which has a better base price? Which one is quicker (or maybe which is more relaxed)? Which one gets my order right? This is all just as or more important than whether or not they a part of the tipping culture.

This is a really interesting look into Amazon's business model around Prime, market segmentation in social media, and other things.

The author seems to have a deep understanding of how businesses work. Some of it's pretty gross -- I hate reading about "creating desire", and similar dystopic capitalist memes -- but it's important to understand what's going on in these companies.

Why the distaste? I treat it as a study of phenomena. It's like a social study on rather grand scale. It doesn't different species much from the crowd dynamics, useful in better design of evacuation routes.

The application is not life-saving, but the conclusions are the same. It's like dynamite and atom splitting. You can use it for the good and for the bad.

> it's important to understand what's going on in these companies.

This is simple. They study people's behavior to drive it for their benefit. The basics of it should be taught in high school, so people better understand themselves.

The distaste is from people wanting to "drive demand", doing it, or recommending it. Driving demand is, quite literally, making possibly-happy people unhappy and then offering a paid solution. Reducing people's happiness for profit is basically evil.

And yeah, I'm reading about it because it's important to understand, anthropologically.

Why the automatic assumption that the people were happy before, and that they won't be happier after? Have you never been happier/better off after buying something that you didn't know you wanted?

Driving demand is how some people discover lifelong hobbies.

No, generally when I buy something I didn't know I wanted, I soon feel vaguely "bleagh" about it and realize I had merely lusted after it, but that it didn't actually add anything to my life.

Buddhists have this down pat: Desire is suffering.

I think people are pretty capable of finding hobbies on their own. We're connected to this global information network. It's not like people aren't being exposed to new ideas all the time. But telling them "you will be happier if you buy this" is disingenuous, and makes people question their existing happiness. That's... bad.

I'll tell you one place where it's appropriate, though -- if someone is already seeking recreation, and doesn't know which option they want, marketing a specific answer is fine. One of the reasons people love libraries is that they can go wander around and discover something they'd never heard of. But that's someone who is already looking for a book to spend time with! Compare to a banner ad saying "this book will fix your life", when someone was just trying to look up information on how to fix their mower. They don't need that. They need to fix their mower.

But it's not just studying a phenomena. "driving desire" is an intervention and usually a neutral way of describing massive exploitation of human cognitive failings for purposes of monetary gains. Money is supposed to be a proxy measure for value, but these "desire driving" strategies are optimizing for the proxy. It's the ultimate manifestation of Goodhart's Law. You can very easily stop providing real value and still make money. Mind you, I'm not a communist and I see the advantages of a free market. But its failings stem from this problem. The only way to overcome these failings is by being critical. Like articulating distate for "desire driving" loudly and clearly. Hopefully this would lead to self regulating economical players which would allow us more freedom from actual formal violently enforced state laws. I do agree that teaching these strategies, critically, to high school students is a very good idea.

> I'm almost invariably more interested in the folks who've registered negative feedback, though I sense many product teams find watching that material to be stomach-churning.

YES! I wish more people were comfortable dealing with negative feedback and not just receiving but also giving or soliciting it. IMO positive and negative feedback is complementary.

IMO, positive feedback is most useful for reinforcing patterns and trends - driving surplus by optimizing the current model. Negative feedback is most useful for generating alpha as it puts emphasis on where the real friction/desires are, what obstacles lie ahead and therefore what problem to solve instead of what is the best solution - allowing us to update our understanding, and break out of a cycle.

I feel the same way about feedback about my personal performance. It's always nice to hear "you are doing great", but at performance reviews or status meetings I really want to hear how I am screwing up and (more importantly) what I need to improve.

Having been on both sides of that conversation, it's really hard to deliver it, and takes humility to receive. But it's far more valuable.

I'm not saying you're wrong, but there is a difference between constructive feedback and merely negative feedback. Most of what I've seen is feedback with little understanding of the situation or empathy, and I think that is why people have become negative about receiving any sort of criticism. I had a boss that was great at that, and I always got constructive feedback, but those managers are far and few between. Most of the time I get things like, "The project is late." without any understanding as to how or why this happened.

> there is a difference between constructive feedback and merely negative feedback

That's totally fair, and a great distinction. I will say that learning to ask for clarification on negative feedback is a good skill to have. Not easy when you depend on a job for income, for sure.

I know this reveals I'm a rube, but what is the "alpha" from "generating alpha"?


> Sometimes, the product-market fit with early adopters is only that. The product won't go mainstream because other people don't want or need that product.

This is something that SV has a problem with. Every product or company is assumed to be targeted at the whole world. There's no room for niche products. Either you take over the world or you end up shut down.

(Twitter is also notoriously bad at handling negative feedback)

Too true. If Vine wasn't popular enough to be kept alive, how the hell many users did it need?

This was a great read. I think the other unsaid takeaway here - touched on briefly when mentioning Twitter's glacial rate of product development - is that invisible asymptotes become insurmountable if your company has lost the ability to adapt and execute quickly by time you encounter them.

I wonder if this shipping fees asymptote is the reason Amazon never shows me shipping rates until the last possible moment in the checkout process. That drives me crazy. They don't even show me if the item ships to my country until I try to pay for it... Arghhh

> Seduction is a gift, and most people in technology vastly overestimate how much of customer happiness is solvable by data-driven algorithms while underestimating the ROI of seduction.

This is a bit unfair, but keen.

I really identified with what he said about Twitter. It's a service that appeals to me, with my love of the firehose of information. Most people just don't want that - and that's fine.

I know this is an Amazon PR piece but I need to point to their more recent aggressive behavior of growing revenue at the expense of user experience. My grips on their non refundable charges is a great example. Amazon will secretly renew your services without even emailing you and when you go to ask for a refund on a non agreed upon renewal, they will refuse to issue a refund.

I guess that's one way of overcoming these invisible asymptotes if all they plan to do is come up with creative ways to charge you.

>> Amazon will secretly renew your services without even emailing you and when you go to ask for a refund on a non agreed upon renewal, they will refuse to issue a refund.

I got charged by audible over 7 months, told them I wasn't ever interested, they send me 105$ back.

How is this an Amazon PR piece? The author hasn't worked for Amazon in many years and towards the end there is exploration of future barriers to Amazon.

FYI: For those of you who enjoy articles like these, https://stratechery.com/ might be worth your while ;)

Some good stuff in here that risks being glossed over because of the length. Could use a tl;dr or a 75% reduction in words.

I thought the same. There's an invisble asymptote of the number of people who will read such a long text.

There were some definitely interesting bits at the start, but I agree. I couldn't make it through. It could use some editing as there are some superfluous statements in there.

Wasn't there a website out there that could generate good summaries?

Great article, very long, so I scanned it.

It's interesting when it comes to Twitter, the argument seems to be that everyone who is gonna use it has come across it, its features are well-known, and there's not much to be done other than accept that.

Which got me to thinking about cryptocurrencies. This has now been in the news across the whole planet, everyone has read about it, maybe not everyone really gets the technical details, but probably the value prop of decentralized currency has reached a huge number of people now.

Or is it? What do you think?

The ideas are there, but the interface to get on board with cryptocurrencies are 10x as difficult than e.g. twitter - you have hundreds of currencies (or half a dozen mainstream ones), hundreds of exchanges for which you need to provide photo ID, various clients, loads of articles about security, etc.

Whereas Twitter is basically sign up and type a text message.

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