Category Archives: Capitalism!

Priceless: The Myth of Fair Value – Book Review

I just recently finished reading a book, so I better write up a review so I can collect my free Pizza Hut Personal Pan Pizza! I read about Priceless: The Myth of Fair Value on Aaron Swartz’s 2010 Book Review (I’m trying to read as much as that dude does). Pricing has always been pretty interesting to me, so I figured a book about pricing would be a good, quick non-fiction read. Ironically, I opted to pay zero price for the book, borrowing it from the library instead of buying it.

Previously, I read Cheap: The High Cost of Discount Culture, which also concerned pricing, but mostly in the super cheap range. Priceless takes more of a psychological stab at human behavior. There are a few experiments that both books alluded to, like the Hershey’s kiss experiment. Having read these two books (and the Freakonomics ones), I kind of think I should’ve been an economist.

Priceless starts out a bit slow by giving you a crash course in human psychology. Homo Economicus is described as a human who makes only rational decisions, and only the most rational. As a model, HomoEco is probably only useful in lab situations. As the book describes, human behavior is not only often irrational, but also very easy to manipulate. Priming and Anchoring are ways to change a person’s opinion on something before they’ve even seen it.

The book gives this example. Research subjects were asked which percentage of the UN is comprised of African nations. Before that question, they were asked to give an over/under on a percentage. The percentage given was either really low (10%) or somewhat average (60%). The difference in that first question, is the percentage of African nations in the UN above or below (10/60%) affected their guess of what it actually was. The scary thing is that this works with many things, including pricing. Another experiment involved real estate and a differing list prices. Subjects (both normal people and real estate agents) were given list prices of a home and were asked to give a reasonable bid. Even the real estate professionals were susceptible to the anchoring effect of the suggested prices, though to a lesser degree.

After giving a solid scientific basis for human irrationality (specifically regarding pricing), the book goes through many short examples where the these effects were either exploited or tested in slightly different contexts. It’s all pretty interesting stuff, especially to someone who feels they are above Jedi price tricks like me though I am probably not).

There are also a few methods described to try to ward against anchoring and priming. One is to immediately set up an argument. If someone says “do you think this book is worth 26.99?” and you say “yes,” then immediately think of reasons why it might be worth less than that. This is also why you should always take a friend with you to the car dealership to argue with.

Overall I thought the book was really interesting. If you can get past all of the cognitive science at the beginning (I might’ve found it boring because I had heard about most of it before), the second half of the book is a really quick and interesting read.

Super Customer Service at the Apple Store

About two weeks ago, my GF got a refurbished iPod Touch from the Apple online store. The refurb was pretty cool, but it seemed to have a really low battery life. I made an appointment with the Apple Store App for the Genius Bar and the guy who helped us was really cool.

We explained that she just bought the refurb and it was pooping out after like 3-4 hours of use. The guy showed us some battery saving techniques (like lowering the screen brightness and turning off location services, etc). At this point I was like, “come on guy, I already know that!” Then he just gave us some paperwork to sign and a new iPod! YESSS.

The awesomeness here is that he didn’t question us like we were total idiots and assumed we were right. He didn’t make us do any stupid diagnostic tests to prove we were telling him the truth. This is what set the experience apart from others, like when I call the cable company and they make me turn my modem off and on, etc. Thanks, Apple! The only thing I would’ve changed is that I scheduled the appointment for like 7:30 and they didn’t get to me until around 8.

The new iPod is working a lot better, so I’m glad we went in to do the switch. In other news, I am thinking of getting an iPad, because (gasp) I was wrong. In the future I should probably forego the knee-jerk assumptions for new products before I actually try them out. I can probably just say I did it for the lulz again and go on to become the next John C Dvorak. The iPad is actually quite neat. Understanding the iPad HIG goes a long way toward appreciating it. I also wrote an iPad version of my other app, so I’d like to actually try it on a real device at some point.

Rework: Book Review

Rework, a book by 37signals (the guys who made Ruby on Rails), is a pretty simple book. It’s appropriately simple, because the book is almost entirely about simplifying things, and the positive effects of doing so.

I started reading the book in a protected PDF from the Microsoft library a while back. Unfortunately the license expired before I read the whole thing, so I grabbed a copy from the Ann Arbor library and finished it up. The book is incredibly easy to read and also incredibly short. It clocks in at a deceptive 273 pages. In reality, there is probably more illustration and whitespace than actual text. It feels like 37signals took general ideas from their blog and distilled them into super short nuggets of information.

I think that the ADD-like feel of the book both helps and hinders. It drives home the point that you don’t need a lot of words to explain something. You can just be simple, and it’ll work. Personally, I feel it’s too easy to blaze through the book and really forget most of what was read since it’s so fast paced. Good thing I basically read through it twice.

For the most part, I agree with most of the sentiments in Rework. The general message is that you don’t have to act like every other company out there. You don’t need to be obsessed with getting big, stalking the competition, hiring billions of people, etc, because being small is actually pretty nice. You can build something that just works, and from there, improve on it. The alternative is taking forever to build a monolithic beast and then finding out you didn’t need all those features.

One interesting thing that I read about in the book was in a section about having “less mass.” The book explains that:

From here on out, you’ll start accumulating more mass. And the more massive an object, the more energy required to change its direction. It’s as true in the business world as it is in the physical world.

What’s interesting is that my former manager who had something like 20-30 years of experience in the industry had used this analogy to explain why my former company was moving so damn slow. He’s a manager that I truly respected and it’s just kind of funny seeing how common a theme mass and inertia is.

Within the context of my most recent work experience, Rework actually points out a lot of what was wrong in the culture. I could go on about it, but that’s for another post. I would encourage you to read the sections: “Meetings Are Toxic,” “Strangers at a Cocktail Party,” “Illusions of Agreement,” and “Send People Home at Five.” As for what went right, Rework did touch on some of that, too (“Focus on What Won’t Change,” and “Say No by Default”).

More recently, I’ve been trying to take the ideas in Rework and apply them to whatever I’m currently doing. I released an iPhone app just a while ago that was barebones. I got a lot of good feedback and learned a bunch about how the App Store process works. A few days ago I submitted an iPad version of that app. It’s also pretty bare, but I know I have room to improve and possibly even start making money with it.

I think that Rework is especially relevant if you are a “starter” type of person, or would like to have that kind of culture at work but aren’t sure how to go about it. I would suggest this book to anyone who works, though. If nothing else, it’s a good way to keep an open mind on alternative perspectives regarding business and business culture.

Delivering Happiness: Book Review

I received an advance copy of Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh, the CEO of Zappos. I am posting the book review today because it’s also the official release date of the book! It’s also the day before my birthday, but that doesn’t really have anything to do with this review.

I saw Tony speak at a keynote for the SXSW conference in 2009. The key components of that talk have stuck with me ever since. He basically argued that companies should act more like people. Since they’re made of people, they need to act more holistically while considering more than just revenues. His company, Zappos, has the goal of delivering WOW experiences through service. Basically it’s to make people happy through unbeatable customer service.

I was glad to see that Tony decided to distill that talk (and much more) into book form a little more than a year after his SXSW talk.

The book is mostly a narrative about Tony’s path to becoming an entrepreneur, angel investor, and eventually CEO of Zappos and getting bought by Amazon.com. I say this book is mostly narrative because about halfway through it starts becoming something else. The narrative is funny and quirky, something I’d expect from a guy whose company has a core value of “Create Fun and a Little Weirdness.” He talks about buying worms for a worm farm, then starting a mail order button empire as a kid, which led to selling pizza in college and then creating LinkExchange (which I totally remember using) while working for Oracle.

I feel that Tony and I share a lot in common. I also had many schemes for making money before I had a real job, like selling rocks and doing yardwork, selling Dell coupons on eBay and signing up for random online offers so I could get gift certificates to sites like CDNow (I think Amazon.com bought them). Tony writes about quitting Oracle when he felt his LinkExchange was too good of an opportunity to not devote his full time to, and quitting Microsoft when his company was sold, not waiting for his stock to vest (and losing lots of money in the process):

I didn’t know what I was going to do, but I knew what I wasn’t going to do. I wasn’t going to sit around letting my life and the world pass me by. People thought I was crazy for giving up all that money… I had decided to stop chasing the money, and start chasing the passion.

Having recently resigned at my own (fairly high-paying) job at Microsoft, I feel the same way. Reading this book was a lot like reading about my own life, at least until the part where he figures out what he does after qutting (I’m still figuring that out, myself).

The narrative section goes up to about the point where Zappos finally ends up getting an important loan and relocates to Las Vegas. After that, the book takes a turn and starts feeling more like a business book. Tony starts including lots of email memos to show what was communicated to the employees at certain points, like when the company had to lay off some employees or when they were sold to Amazon.

Different Zappos employees start writing entire sections like “Vendor Relations by Fred.” This makes the book feel much more fragmented and difficult to follow. The book becomes less about Tony and more about a shared experience. The problem is that it’s riddled with asides, lists, email memos and more. There’s really no organization towards the end of the book and it feels very much thrown together. While the lessons at the end of the book might be useful, I feel as though there could have been two separate books. One from Tony’s perspective that stays as a full narrative, and another book for business people on how to make sure their company’s culture doesn’t poison its employees.

Delivering Happiness is a good book. I believe in its author and in the principles contained within. While I feel it could have been organized better, I still think everyone should read it. It’s an extremely quick read and very entertaining most of the way through. I hope that Tony Hsieh’s message of the importance of company culture reaches more people, and that people have better work experiences as a result.

Disclosure: I received a free review copy of this book. My review is an honest opinion of the book.

Contest rules!
I’m also holding a contest because I got an additional free copy of the book to give away. If you want to win it, retweet this tweet and follow me @hungtruong (so I can DM you). I’ll randomly pick someone to send the book to once I get enough entries (after a day or so). I can only ship to the US; sorry about that!

Proof That Apple is Obsessed With The Customer Experience

I was at the mall today just wasting my time (and looking at options for getting my eye prescription checked), and I stopped by the Apple Store. As I approached, I noticed an army of people in blue shirts, just waiting to help anyone who walked in. I soon realized that they were just cardboard cutouts.

Neat. I walked in and looked around at the unibody Macbooks (the white ones that are now more curvy) and checked the battery life on them. They apparently get something like 5 hours (when I unplugged them and the computer actually calculated) versus my MacBook Pro that gets like 2 if I’m lucky.

Then I walked around and noticed something:

Apple printed the backs of the cardboard cutouts! They’re in the same poses in the back as they are on the front! If the backs had been blank, I probably wouldn’t have even noticed. But Apple pays so much attention to detail that they decided that peoples asses must be printed.

It is likely due to this level of detail that Apple is succeeding where other companies fail hard. I don’t care what anyone says about Apple, they care more about the user/customer experience than probably anyone else out there.