It's So Unfair!
Sorry I haven't written in a while. I just didn't have that much to say…
Can you come up with a way to make someone very unhappy just by giving them $100?
And I don't mean something like "giving them the money while also punching them in the face". No, I'm talking about simply handing someone $100 for free, and doing nothing else to them. Any ideas?
Here's how to do it.
Round up 20 people in a room and give one of them $100, but then give everybody else $200.
Irrationality
Now the rational reaction for that one person would be joy at getting an unexpected free $100. But we can all imagine how we'd actually feel in that situation: we'd feel singled out and cheated, and probably a lot more miserable than if we had never even received the money in the first place. It just wouldn't seem fair.
We experience almost everything in life in relative terms. Room-temperature water can feel warm if you drink it after eating ice cream, and receiving $100 can feel horrible if everybody else is getting more.
The concept of fairness is just our way of extending this to social interactions. Since we don't have absolute milestones to evaluate things like happiness or success, we look around and compare ourselves to others.
A Real-World Example
I recently witnesed yet another example of this principle in the form of an unhappy Discover Meteor customer.
The reason why that customer was unhappy is that after paying for the book (in English), he discovered that a community-translated Portuguese (his native language) version was also available for free (we decided to make all translations freely because they're translated by volunteers who wouldn't make any money off them either).
To quote him, realizing that a free version existed made him “feel like [he] threw [his] money in the trash.”
Judging Value
Now that customer had been perfectly happy with his purchase until he realized that he could've potentially not paid for the book (leaving aside the fact that the Portuguese translation isn't even finished yet).
What's crazy is that if you're a Portuguese speaker learning Meteor, having more people in the Portuguese-speaking Meteor community is a net plus for you. So I would argue that the existence of free translated versions makes the book more valuable, not less.
But of course, that's not how people think. And on the whole that's probably a good thing. After all, if it appears like somebody else is getting a better deal, why wouldn't you fight to get it too?
Pricing & Fairness
So it's just something to keep in mind when dealing with sensitive issues like pricing.
For example, we've recently been thinking about dropping our prices for Discover Meteor. We've made a lot of money on the book already (probably an order of magnitude more than the average tech book), and we're ready to take the risk of lowering our prices in order to reach a broader audience.
We could just go ahead and announce our new pricing, and maybe that's what we'll do. But if we do this, we know we'll get complaints from people who just bought the book at the previous, higher price point and now feel cheated.
Changing Perception
To avoid that, one possible solution is to come up with extra content that older customers will have access to, but newer ones won't. But that's a lot more work than simply updating a pricing table.
In any case, no matter which solution we end up picking, at least we'll do so fully conscious of the potential backlash.
What about you? Have you ever ran into a situation where your actions were perceived as unfair? And was that perception itself perhaps… unfair?
Sacha
Sorry I haven't written in a while. I just didn't have that much to say…
Can you come up with a way to make someone very unhappy just by giving them $100?
And I don't mean something like "giving them the money while also punching them in the face". No, I'm talking about simply handing someone $100 for free, and doing nothing else to them. Any ideas?
Here's how to do it.
Round up 20 people in a room and give one of them $100, but then give everybody else $200.
Irrationality
Now the rational reaction for that one person would be joy at getting an unexpected free $100. But we can all imagine how we'd actually feel in that situation: we'd feel singled out and cheated, and probably a lot more miserable than if we had never even received the money in the first place. It just wouldn't seem fair.
We experience almost everything in life in relative terms. Room-temperature water can feel warm if you drink it after eating ice cream, and receiving $100 can feel horrible if everybody else is getting more.
The concept of fairness is just our way of extending this to social interactions. Since we don't have absolute milestones to evaluate things like happiness or success, we look around and compare ourselves to others.
A Real-World Example
I recently witnesed yet another example of this principle in the form of an unhappy Discover Meteor customer.
The reason why that customer was unhappy is that after paying for the book (in English), he discovered that a community-translated Portuguese (his native language) version was also available for free (we decided to make all translations freely because they're translated by volunteers who wouldn't make any money off them either).
To quote him, realizing that a free version existed made him “feel like [he] threw [his] money in the trash.”
Judging Value
Now that customer had been perfectly happy with his purchase until he realized that he could've potentially not paid for the book (leaving aside the fact that the Portuguese translation isn't even finished yet).
What's crazy is that if you're a Portuguese speaker learning Meteor, having more people in the Portuguese-speaking Meteor community is a net plus for you. So I would argue that the existence of free translated versions makes the book more valuable, not less.
But of course, that's not how people think. And on the whole that's probably a good thing. After all, if it appears like somebody else is getting a better deal, why wouldn't you fight to get it too?
Pricing & Fairness
So it's just something to keep in mind when dealing with sensitive issues like pricing.
For example, we've recently been thinking about dropping our prices for Discover Meteor. We've made a lot of money on the book already (probably an order of magnitude more than the average tech book), and we're ready to take the risk of lowering our prices in order to reach a broader audience.
We could just go ahead and announce our new pricing, and maybe that's what we'll do. But if we do this, we know we'll get complaints from people who just bought the book at the previous, higher price point and now feel cheated.
Changing Perception
To avoid that, one possible solution is to come up with extra content that older customers will have access to, but newer ones won't. But that's a lot more work than simply updating a pricing table.
In any case, no matter which solution we end up picking, at least we'll do so fully conscious of the potential backlash.
What about you? Have you ever ran into a situation where your actions were perceived as unfair? And was that perception itself perhaps… unfair?
Sacha