Monday, June 15, 2015

2015 BIZ: Ann Tre Prenyour on Kitely pricing

Ann Tre Prenyour on Kitely pricing
"That Kitely pricing plan leaves an opening for my kind of work," Ann remarked.  Ann lives in my head and comments whenever she sees an opening.  I usually just steal her ideas, but now she wants a byline. 
  • Ann: That Kitely pricing plan leaves an opening for my kind of work
  • Selby:  And you're going to tell me about it?
  • Ann:  I shouldn't have to tell you about it.  You already wrote about it in your article.
  • New Price Structure for Kitely. A really sweet spot
  • Selby: You can tell it better than I can.
  • Ann: True.  And I will.  After the break.
(More after the break)

News and Notes

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    • Ann: You did notice that the sweet spot at $20/month was only a little more than the low price.  But it bought about 4 times a much.  
    • Selby:  Yeah.  I even criticized it.  
    • Ann:  Criticized!.  My people don't stop at thinking what's wrong.  There is no market for what's wrong.  We think how to make it right.  For a profit.    
    • Ann: For $20/month, you get the equivalent of four sims.  Kitely is going to charge $15/month for one sim.  But they will sell you sims in a bulk package for $5 per sim.  
    • Selby: So I could rent a package, repackage it as 4 sims for rent, rent them out at $10 a month, and make $5. a month on each sim.  
    • Ann:  You got it.  That's 100% mark-up. The seventh rule of acquisition is: any price that's out of whack, is an invitation for arbitrage.
    • Selby: So would you recommend the plan I just described?
    • Ann: No.  The 23rd rule of acquisition is:  Never play a game where somebody else holds all the cards.  
    • Ann: Kitely makes the land, so they can sell cheaper than you ever can.  If you can get lots of people to rent at $10./month, Kitely can cut that $15./month to $6./a month.  No loss to them, if you are taking all that bottom-feeder business.  But you are out of business.
    • Selby:  (Sigh.)  So I can't make money on it after all. 
    • Ann: Not unless you are one of my people.  The 3rd rule of acquisition is if you aren't adding value you are going out of business.  And the 5th rule is: Look around, pay attention.  There is always somebody smarter than you are.  
    • Selby:  Where should I look?
    • Ann: At businesses like the one you are thinking about. Does anyone rent land in Second Life?  
    • Selby:  Well yes.  There is a big sailing community.  And malls. And lots of places rent houses or scenic places.   
    • Ann:  Do they get customers by selling cheap?
    • Selby:  No. They get customers by adding value.  They function as aggregators.
    • Virtual worlds: The rise of the aggregators
    • Ann:  The sailing community is next to a body of water.  The malls aggregate customers.  If you rent a house you provide a house and scenic surroundings.  And all of them are breaking up $300/month worth of Linden sim into smaller bits that are more affordable.  
    • See you later, aggregator
    • Ann: In the Kitely case, one of the values you add is that the bigger sim handles 40 avatars.  With a little coordination, those 4 sims can each have 40 avatars, just not all at once.
    • Selby:  Especially valuable for music venues and other event hosting.  
    • Ann:  Right.  For $15./month you can bring 10 avs.  For $10., you can bring 40.   
    • Selby:  Let's hear it from the Yes Butters!
    • Yes Butters:  Yes, but all the places have to be at the same maturity rating.  And you will have to keep the tenants from bothering each other.
    • Ann: That's part of the work you have to do to earn your keep as land manager.  13th rule of acquisition: You don't get something for nothing.  
    See you later, aggregator

    Ann's rules of acquisition

    • Any price that's out of whack, is an invitation for arbitrage
    • Never play a game where the other guy holds all the cards
    • If you aren't adding value you are going out of business.
    • Look around, pay attention.  There is always somebody smarter than you are.
    • You don't get something for nothing


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