Comment by majormajor | Hacker News Reader

Comment by majormajor | Hacker News Reader

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My favorite example of why advertising/marketing is important but not overwhelming/unstoppable is in the hit-based industries: If the industry had a "make a superstar" button or a "make a blockbuster movie" button they could just keep mashing, they'd be mashing it constantly. You wouldn't see franchises go from top-of-the-world to decline like Marvel or Fast and Furious. You wouldn't see expensive new bombs or failure-to-launch reboots. There is countless chatter out there about industry plants, organic vs PR-shilling word of mount campaigns, etc. But... if that's all it took, it would be wayyyyy more constant. A lot of words spilled recently about a band, Geese, and how their buzz wasn't as organic as it seemed... for a band that's still, at the end of the day, quite niche and small-in-audience...

It's very hard to get a huge hit without marketing - even great word of mouth benefits from amplification - but it's also near-impossible to force a hit into an audience that isn't vibing with it. The highest-grossing movies, or highest-listened pop music, is a combo of marketing + accurately hitting extremely-common/trendy tastes. See also iPhone marketing vs Windows Phone marketing. I thought Windows Phone was better; none of my friends or coworkers was convinced even after I showed them my phones. The mass media consumer may not have thought much about their tastes or tried very hard to be more adventurous, but that doesn't mean they don't like the stuff they're eating.

I think this is still in many ways bad - at the very least, it's incredibly inefficient to have a billion-dollar zero-sum "pick this one over that one" industry. But I don't think it's a deadly threat. (See also any number of "tons of money and star-power behind them" failed political candidates too...)

Meanwhile, here in Japan I've been in touch with several companies, some small, some quite large (e.g. some building companies) which have a policy of no advertising. No marketing. None. They don't do it. They mostly do have web sites, but that's all. They say they rely on word of mouth, and from what I can tell it works, they're all busy. They say that instead of using money for advertising they want to use everything for the products.

I think marketing is one factor for success, quality is another, but an under-appreciated third one is just getting more shots on goal until one finally succeeds.

I think this is one of the most under-appreciated explanations of why American-style capitalism succeeded where soviet-style communism failed. In theory, communism is more economically efficient, as you don't have multiple companies duplicating work and re-inventing variations on the same idea. In practice, it's much harder to judge an idea than a finished product, so the best way to make a good product is to do it by evolution, not up-front design. If the whole country is oriented around making X happen, X must happen, whether it is a good idea or not.

In general, markets are a really elegant solution to the allocation of goods. It’s really difficult to plan out how steel should be allocated or how many pairs of shoes we should make this year.

Even worse, many Soviet factories were incentivized to lie about the quantity of goods produced or sacrifice quality to meet quotas. So as a first order, approximation, markets are really nice solution to this.

Of course there are many known market failures, which can disrupt such a fragile system if not addressed. For example, monopolies and information asymmetries.

Some people also believe that part of the failures of the planned economy was a limitation of the technology at the time. Without computers, it wasn’t that easy to track the outputs of factories to enforce quality. Those people argue that a modern day planned economy might look a little bit more like Amazon does internally. Maybe still not a great place to live though.

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