| Jason has a point: You can maximize revenue by focusing on delivering higher value features to more lucrative customers. But, you need to be careful when following his advice. Blindly following the principals of "revenue maximizing resource allocation" makes you susceptible to disruption. If you focus too much on high-end customers you can either: 1. Make the product in-accessible to a large audience. 2. End up overserving many of your customers. That opens up the opportunity for new entrants to provide less-good products at the lower end of the market, which you would be happy to ignore (you can just write a $80 book next time, targeted at fewer folks), while the new entrant follows you up market, until you have no business left. It's not clear it applies here, as neither author has a structural advantage over the other. However, just because you can earn more profits by charging a higher fee to fewer customers, doesn't mean you should. It could kill your business in the long run. Take Windows PCs vs the iPad as a good example. |