Newsletter Vol 46

Veblen Effect
When people are asked to choose between similar items A and B, people prefer whichever has the higher price. So the very idea that your price must be lower than your competitor to compete with them is wrong. It is not your job to make your price lower, your job is to make sure your product has better value. The value may not have anything to do with the product itself.

One way is to come up with a better product name. Here are some examples of name changes. You may or may not know the original names of these companies, but you likely know their current names on the right. They have changed nothing about their products, but the name change made them what they are now.

It may be time to change my company’s name.

ZimRide -> Lyft
Backrub -> Google
Software Development Labs -> Oracle
AuctionWeb -> eBay
Price Waterhouse Coopers -> Bearing Point
Oak (Software) and Green before that! -> Java
Sound Around -> Walkman
Cellular One -> Cingular
Mosaic Systems -> Netscape
Fashion 21 -> Forever 21
Radar Oven -> Microwave Oven
Michael Kors -> Capri Holdings
Priceline -> Booking Holdings
WeWork -> We Corporation
Coach -> Tapestry
WeightWatchers -> WW
Salton Cooker -> George Foreman’s Lean Mean Fat Reducing Grilling Machine
Wards -> Circuit City
Blue Ribbon Sports -> Nike
Firebird -> Firefox
Confinity -> Paypal
Jerry’s Guide to the World Wide Web -> Yahoo
Il Giornale Coffee Company -> Starbucks

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