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I genuinely don't understand the "pay me 10 million to save half on 20 million of costs" negotiation tactic... if they wanted to save money, why wouldn't they j

I genuinely don't understand the "pay me 10 million to save half on 20 million of costs" negotiation tactic... if they wanted to save money, why wouldn't they just shut down the API access?

csjh 3y ago
They say somewhere that the 20m is from opportunity cost, so 10m for an app that's "costing" them 20m a year would be a deal.
- az226 3y ago
  Exactly. They’re not doing the deal because the $20M is complete BS.
robryan 3y ago
The whole thing was just to illustrate the point that he thinks the Apollo API access is worth nowhere near $20 million a year in opportunity cost.
Aeolun 3y ago
20 million/year is how much the Apollo users would bring in when served ads (the opportunity costs). Reddit pays Apollo 10M, starts serving their ads in the app, and now rakes in 20M/year without any extra effort. Conversely, now they need to convince all the angry users of Apollo to come back to use their shitty website/app, something that will never happen. A lot of people that aren’t even using Apollo are going to be angry at the mistreatment and leave the site altogether. On the whole it’s quite likely that Reddit’s losses will amount to more than the 10M they’d have to pay once to get a ton of money in the future.
- karmelapple 3y ago
  That sounds like a reasonable benefit to bargain over, but only if you have a great negotiator to make it happen.
  - az226 3y ago
    Wouldn’t happen. $20M number is completely BS.
    - Aeolun 3y ago
      That’s on Reddit. The exact number doesn’t really matter for purposes of this explanation, and I suspect it doesn’t really matter to the Apollo creator either. It could be 2M or 500K, the equations remain the same.
wvenable 3y ago
It's not a negotiation tactic. It is a joke because the numbers they are talking about are a joke. He's saying that if they think Apollo is can make Reddit 20 million a year then just pay him 10 million and they can keep the change. The truth is both sides know these numbers are b*llsh*t.
onion2k 3y ago
if they wanted to save money, why wouldn't they just shut down the API access They are. They're just pretending they aren't. No one is going to pay the amount they're charging.

I genuinely don't understand the "pay me 10 million to save half on 20 million of costs" negotiation tactic... if they wanted to save money, why wouldn't they just shut down the API access?

csjh 3y ago

They say somewhere that the 20m is from opportunity cost, so 10m for an app that's "costing" them 20m a year would be a deal.

az226 3y ago
Exactly. They’re not doing the deal because the $20M is complete BS.

robryan 3y ago

The whole thing was just to illustrate the point that he thinks the Apollo API access is worth nowhere near $20 million a year in opportunity cost.

Aeolun 3y ago

20 million/year is how much the Apollo users would bring in when served ads (the opportunity costs). Reddit pays Apollo 10M, starts serving their ads in the app, and now rakes in 20M/year without any extra effort. Conversely, now they need to convince all the angry users of Apollo to come back to use their shitty website/app, something that will never happen. A lot of people that aren’t even using Apollo are going to be angry at the mistreatment and leave the site altogether. On the whole it’s quite likely that Reddit’s losses will amount to more than the 10M they’d have to pay once to get a ton of money in the future.

karmelapple 3y ago
That sounds like a reasonable benefit to bargain over, but only if you have a great negotiator to make it happen.
- az226 3y ago
  Wouldn’t happen. $20M number is completely BS.
  - Aeolun 3y ago
    That’s on Reddit. The exact number doesn’t really matter for purposes of this explanation, and I suspect it doesn’t really matter to the Apollo creator either. It could be 2M or 500K, the equations remain the same.

wvenable 3y ago

It's not a negotiation tactic. It is a joke because the numbers they are talking about are a joke. He's saying that if they think Apollo is can make Reddit 20 million a year then just pay him 10 million and they can keep the change. The truth is both sides know these numbers are b*llsh*t.

onion2k 3y ago

if they wanted to save money, why wouldn't they just shut down the API access They are. They're just pretending they aren't. No one is going to pay the amount they're charging.