It's rather hyperbolic to say it's "the worst kind of manipulation", and that it will ensure "customers never trust you." (Disclaimer: I'm not on facebook/zynga in part because of these concerns...)
I also guess that tactics like these will erode user trust over time.
But most users are neither savvy nor concerned with things like this, in my experience. They may be annoyed with it, but the majority of people simply don't apply any meta-analysis to the sites they use, as we so often do here on HN.
I'd guess that they use these techniques because they are successful. So that's an interesting dilemma -- how can a (public) company decide which ethical path to take? If they don't use these techniques, they are doing their bottom line a disservice. If they do use them, they are crossing into a grey area of ethics.
What are companies (startups, especially) supposed to decide, between a slightly grey area success or an ethical failure?
PS - I know that's a bit of a false dichotomy, but making it a black-and-white issue simplifies it for discussion.
This is roughly why I said it would be illegal someday. The price mechanism is really bad at giving acceptable answers to ethics. Whenever all the current enterprises agree to be ethical, there inevitably comes some whippersnapper who has no such qualms and undercuts them all. And while they can form a cartel to fight back, the only real recourse is stepping outside the market system for a final arbitrator: the law.
Sorry for the delay in responding. I really like what you said up here and upvoted you for it.
In the hope you see this, I have another question for you: in the startup world, what recourse is there against unethical competition? Some companies like Uber (esp. in Boston, NYC), are able to fight the good fight. Others, like Padmapper, are trying to do so.
But for the majority of companies, legal recourse (especially looking for legislative redress rather than establishing case law) is not an option. What should an ethical startup do when faced with acting unethically (yet similar to established competiton) or not existing?
Again, thank you for putting the price->ethics perspective so elegantly.
I think the best weapon you have is mudslinging. Start a blog and explain how and why this works and why it's wrong. Try to get it read by the unethical practitioner's customers: they're your targets. Hopefully, you can have an effect and force-feed ethics into the price mechanism... but honestly, I don't think you'll get very far or see much of an ROI.
That's my best guess, and I'm not terribly happy with it.
I agree with this. The "price shock" reaction that causes consumers to recoil and not listen to your value prop is significantly less likely in a corporate situation. They're spending the company's money, not theirs; your price will not offend them (like it would if it were their money).
No easy answers, but if it's a big enough deal ($100k US or higher...) it may be worth finding someone who can negotiate for you. Or sell for you.
If you focus on the value delivered, know your market (what people are paying your competition), and you can justify your higher-than-competition cost, you should be OK. Then double that, in your mind, because you're probably underselling yourself, and underestimating the cost of an employees time to even research these options [ie even the worst product delivers more value to the corp. than a continued search for a product.]
I can't offer any absolutes, but I would recommend that you continue a conversation with them before quoting a price.
Try to determine (estimate) their budget. You'd be surprised at how easily corporate employees will reveal budget.
Then charge a percentage of that budget.
Alternatively, try to figure out their internal cost estimates/budget for your component. Then double that.
You have a ton of negotiating room, but always do it as a percentage of what they were expecting to spend on the project/your component.
In my (light) experience, I've always at least doubled the amount of money coming in. Working with a corporation is a different beast than directly estimating value delivered / standard consumer stuff.
Good ideas. I was thinking of charging per success rate. My application increases exposure over several social channels. If my application is successful in providing them what they're looking for I am sure they'll be willing to pay for that value. I am not sure that on first glance they'll trust my app enough to pay a straight on high sum. What is your take on this?
In my experience, a corporate employee needs to be able to relate a fixed cost (or fixed cost estimate) to their superior. This mostly holds when the project is a line item, and they need a signature on a purchase form (instead of a comparatively expensive exec buy-in).
If your app is unique (or offers them a unique and important-to-them value prop), they have to trust you. If your product isn't unique, it must have some unique value props. Emphasize those! Strut your stuff, so to speak.
The attitude of many F500 purchasers is this: does it meet my criteria? Does it meet my budget? Then purchase. (Often, it's not the end-user [e.g. engineer, product manager, etc.] who makes the decision, but the purchasing agent.)
My only caveat is that corporate sales are tough. You may get a "yes, yes yes" all the way along from your POC, but they may not be the decision maker. It's easy to spend months purchasing a sale that you never had a chance at, but didn't know that. You have to judge by the conversation tone these things.
I wouldn't worry too much about the "do they trust my product" process. They trust you enough to ask for a price -- that means they're sizing you up for their budget. It's tough to think like a corporate buyer if you've never been one... but they have different incentives than consumer purchasers (who, after all, have to live with their purchases...)
Honest question -- why do we assume our actions deserve privacy on the internet, when we access someone else's site? We don't have the same expectation for e.g., when I walk into a shop (eg I may desire, but do not receive, privacy from being tracked if I were to walk into a sex toy shop).
When you visit a website, that website gets a lot more information about you than when you walk into a shop. All I want is that websites are limited to the same information as a simple shop. I published the following blog post last year which covers my thoughts on it: https://grepular.com/2011_EU_Cookie_Legislation_Opinion_of_a...
Shops don't know the last shop you visited, but websites do know the last website you visited (referrers). Shops don't assign you a unique ID the moment you walk through the door which they use to identify you on subsequent visits, websites do (cookies).
I see what you're saying. But excepting the cross-site tracking, aren't all of those privacy leaks just data that my browser is sending? Seems to me that's more my responsibility than the site owners. (FTR, I do use a bunch of the privacy controls and find trackers like the FB bug a bit creepy.)
My energy provider (SDGE in Southern California, USA) takes a fairly straightforward tiered approach to energy cost. First, they take your house arrangement (sqft, year built, etc.) and compare to similar homes. This establishes a baseline energy usage for your house profile.
Using 0-100% of your "allocation" is one price. It's about 2x the cost to use 101-149%. 150-199% is an even higher rate. Etc.
Doesn't solve peak usage or distribution issues, but it's a (relatively) easy concept to understand. The detailed statements pretty clearly explain how much each "allocated unit" of energy costs.
All the time. I installed a Chrome extension that triggers the "i'm feeling lucky" result when using the Omnibar.
I look up baseball player stats all the time, and the search on those site stinks. So I can just use the Felling Lucky on a query like "fangraphs jose bautista" and it will take me immediately to the page on the site I want. Saves me a click, since I'm usually pretty confident I know what the first result is.