Guy Kawasaki: Will anyone pay for anything? | Hacker News Reader

Guy Kawasaki: Will anyone pay for anything?

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38 pointscwan22 comments

Panel discussion with high school and college kids reveals shocking truth - young people tend to be broke.

...and all these sites are pure luxeries.

...and all the content is generated by the kids themselves.

I am remarkably non-broke for a graduate student that went to grad school straight out of undergraduate. I was still amazed when my advisor whipped out his credit card to pay for Pandora One practically on a whim. On the other hand, I have learned the value of going out to eat instead of cooking.

Tangible goods have value. Pain avoidance has value. Intangible entertainment that is consumed at home has so many free substitutes that we're only paying for the marginal entertainment. I don't think this is news -- we didn't just grow up with Napster, but also DVD libraries, romsets, and hackable consumer electronics. I wonder what proportion of young people are aware of someone with substantial romsets for the NES or SNES?

Finally, my social network exists outside of its computer representation, and transcribing the personal data from Facebook to the next system is embarassingly parallel. Of COURSE there's no reason for loyalty.

Agreed. I normally don't talk to people on facebook unless I already know them offline, so it really just becomes an alternative to email. If Facebook starts charging, I'll just switch to some other form of communication, because thats what I use it for - to communicate. And guess what? Theres many many alternatives for that.

Younger people (high school students especially) also tend to not have a CC# to put in to pay for things online. They tend to have to ask their parents for their card, and justify to them why they should be allowed to charge something to their account (even if they already have the actual liquidity necessary to pay them back.) This becomes especially problematic with micropayments, because it's very hard to justify "giving my information away to a strange website" for a $0.99 charge. It's actually much easier to convince a parent to get off their ass for a $200 charge, as long as you could justify/pay back the actual 200 dollars.

Very true and now that I have a credit card I totally forgot about those days. At one point I had a prepaid debit card that could be used, if only GameStop or Best Buy had them available co branded with a micropayment service.

From my own experience it's a "Time and Effort" vs "Money" thing. When I was young I was willing to put up with broken torrent connections, annoying ads, and other inconveniences in order to get stuff for free. Because I had more time than money and was willing to put in the effort.

As an adult I'd just assume pay the $1.99 or buy the $36 (a year) Pandora One membership so as to not have to put up with that stuff. Because now I have the money but there is much more of a demand on my time.

In that way I think these young kids aren't going to spend money they don't have now. But once they have enough money for media costs to be inconsequential they'll start paying for stuff.

Please forgive the extremely rude nitpicking: assume -> as soon

If you don't nitpick how will I learn? :)

Seriously though I do that on occasion and it always amazes me. It's like the motor part of my brain is completely separate from the creative part and so on occasion I'll type the completely wrong word because my fingers are somehow blindly transcribing what my inner monologue is saying. It's weird.

The economics of young people is dead simple. If they can get something for free, they'll do it. No point in trying to convince them otherwise.

Nice little lessons for anyone who wants to sell to 'young' people.

I'll call out this point, however: "they never buy anything because of the advertising."

I've heard this before in market research groups, and even from business owners, but let me tell you - if you're buying some product, anything with a brand, chances are that advertising played some role.

See also this recent HN discussion - http://news.ycombinator.com/item?id=690758

Advertising serves two related but distinct purposes:

1) Trying to get immediate sales, as part of selling a good;

2) More important is marketing - building longer term awareness of brands, quality, and availability of goods.

When people downplay the effectiveness of advertising they are almost always thinking of its effectiveness at selling, where its major benefit to a company is through marketing.

Could hardly agree with you more Bill. I actually go as far as giving different names to the two purposes, and putting them into completely different areas of the business.

1) is 'Marketing' is Operations, it's about revenue today, and sits with Sales, product delivery etc.

2) is 'Positioning' (from the work by Jack Trout) is equity management, is about future revenue and sits with things like vision, culture, new product research etc.

No, students won't pay for anything -- because they can't. They might spin this, but they aren't riding a half broken down 94 Chevy Lumina because they hate BMWs. Most college students are earning well into negative territory, taking loans to pay basic expenses.

At some point you make money at a rate that you can pay your bills and some is left over. Suddenly it's not economical for you to spend 14 hours a week roaming around trying to score free wifi. When you are older, time is the most limited resource, not money. Suddenly there aren't enough hours in the day to do what you want to do, and you will pay for things that let you do things you want to do.

Can it be that email is the killer app of social media?

This should not surprise anyone. It would seem to me that few people would miss the irony involved when you get a message telling you that you have a message.

Businesses will. Older more affluent customers will.

Too many startup founders aim for their own age group. I feel like the term "target market" never caught on in Silicon Valley. Not many companies start out chasing the 14-21 demographic unless you want to lock in a brand preference for later (i.e. Abercrombie). 21-49 is a lot better, affluent is a lot better, enterprise or b2b is a lot better, yet for some reason the competition is at the bottom because that is what founders know. Find the problems elsewhere and you will be much safer.

I think this makes broad strokes using a finite subset of people. Of course they won't pay for facebook if they had to, imagine asking your parents for your $39 yearly membership to facebook...

I do enjoy what I get for free, but if push comes to shove I don't see myself leaving gmail no matter what the final yearly cost is.

I always say "if i has the money I'll buy even if I don't need". That time i don't have even a paypal with null balance; now I have the money and even a CC, I still don't buy anything, unless it will convert to more money!

That kind of sounds like "It's better to improve than invent"?

And Gmail stands out as the one web-app that the kids love. Woot, they love the one innovative web-app that really improved something? Unbelievable.

Everyone I know uses gmail for the same reasons I use gmail: it has a nice itnerface, is easy to use, has plenty of useful additional features, rarely goes down, provides loads of space so I don't need to worry about deleting stuff that I might want later, its spam filter works well and ... its free. Being free is the main thing though, because google could drop one or more of their other features and I'd still use it, but force me to pay and I'd look elsewhere. Why? Because I can.

Not that I'm not willing to pay for a good service - I am (and do), but I need a lot of additional value over what I can get for free. Gmail gives me a lot of value, but I have yet to be convinced that its enough to pay for.

Value is the right word. I wouldn't pay for gmail (even though I LOVE it), because it's one small part of my larger internet existence.

In a vacuum, I might pay for gmail. The problem is tied up in the fact that I also use 10-15 other services (twitter, facebook, etc...) that I might also have to pay for. If I could consolidate all of those into one place and pay just one bill, well then I might be tempted to pay.

The fragmented nature of the web itself makes monetization difficult.

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