4 ms·

Isn't that way of thinking exactly what led to the dotcom bubble?

vonklaus 11y ago
It isn't clear what the above comment actually means by"customers". If they are talking about perceived value to a customer who is the advertiser, and they are selling them your value, I sort of follow the point. In whatever case, you are correct if you are insinuating that the perceived v. Actual value delta is dubious in that it usually doesn't taper off. Once things get way out of whack the correction can be over night
- mikekchar 11y ago
  I haven't really had the chance to go back and look at this thread. I found the responses really interesting because of exactly what you said here. Each person seems to have a definition of "customer" and "value" and it's different :-) What I originally meant by customer was the person who paid for the service/good being developed. I don't personally consider investors to be customers. They are partners in my eyes. Also, interestingly, I don't necessarily consider users to be customers. For example Facebook users are not customers since they don't pay anything for the service. The customers are the people buying ads. The most interesting thing is that Facebook probably does not provide much value at all. If people would have to pay $15 a month for it, I suspect it would fail quickly. But the gathering of all those faces is worth something to the advertisers. So Facebook (and Google, etc) are caught in a fairly tight squeeze of diminishing returns on adding value to the users. They need to spend enough to bring enough faces to get advertising, but more money/facility is not useful. In almost every job I've worked in, my users are not my customers. In a few jobs I've had no customers -- just speculating investors. It becomes a race to the bottom where we try to make the lease expensive thing that will attract faces (or in the case of speculating investors, create a disruption). Can you imagine having a business plan where you go to an investor and say, "I want to make something that is worth $1000 a year to a user"? If I can find 1000 users, that's a million dollars a year -- enough to fund a decent development team. I know. It's ludicrous. Why would we try to make something that someone values as much as their daily cappuccino? I don't expect my short rant to change anyone's mind. But maybe after people discover that the "fractions of a penny per face with billions of faces" market is not so large as they thought, we'll have more CEOs trying to think about how to make a product that users want to pay for.

It isn't clear what the above comment actually means by"customers". If they are talking about perceived value to a customer who is the advertiser, and they are selling them your value, I sort of follow the point. In whatever case, you are correct if you are insinuating that the perceived v. Actual value delta is dubious in that it usually doesn't taper off. Once things get way out of whack the correction can be over night

mikekchar 11y ago
I haven't really had the chance to go back and look at this thread. I found the responses really interesting because of exactly what you said here. Each person seems to have a definition of "customer" and "value" and it's different :-) What I originally meant by customer was the person who paid for the service/good being developed. I don't personally consider investors to be customers. They are partners in my eyes. Also, interestingly, I don't necessarily consider users to be customers. For example Facebook users are not customers since they don't pay anything for the service. The customers are the people buying ads. The most interesting thing is that Facebook probably does not provide much value at all. If people would have to pay $15 a month for it, I suspect it would fail quickly. But the gathering of all those faces is worth something to the advertisers. So Facebook (and Google, etc) are caught in a fairly tight squeeze of diminishing returns on adding value to the users. They need to spend enough to bring enough faces to get advertising, but more money/facility is not useful. In almost every job I've worked in, my users are not my customers. In a few jobs I've had no customers -- just speculating investors. It becomes a race to the bottom where we try to make the lease expensive thing that will attract faces (or in the case of speculating investors, create a disruption). Can you imagine having a business plan where you go to an investor and say, "I want to make something that is worth $1000 a year to a user"? If I can find 1000 users, that's a million dollars a year -- enough to fund a decent development team. I know. It's ludicrous. Why would we try to make something that someone values as much as their daily cappuccino? I don't expect my short rant to change anyone's mind. But maybe after people discover that the "fractions of a penny per face with billions of faces" market is not so large as they thought, we'll have more CEOs trying to think about how to make a product that users want to pay for.