One Reason to Buy Less Stuff

You forgot the marginal benefit of having less stuff in your pockets. There are times when I have carried a cell phone, an ipod, and a digital camera in my pockets. Right now, there are no phones that have the megapixel quality of a digital camera and so you can’t easily combine all 3. But having only 2 things in my pockets rather than 3 is a huge boost; especially if you are wearing jeans.

Also, marginal benefit can change depending on the situation. When I am walking around looking for a place to eat or a specific address that I can’t seem to find, having direct access to the internet is really beneficial to me. There have been multiple times when I’ve called my friends (or have been called by my friends) and asked are you near a computer. But most of the time, you are right, that stuff is not important.

So is there potential for a product to fill a niche? Sure. I could say that it is similar to an “AAA” type insurance. I may use AAA once a year. But when I do use it, I am so relieved to have it. That marginal benefit is only realized a long way out. It may not even be a benefit you thought you would ever really get from the product like quickly being able to google maps an address because you are late for a job interview or a date. But it may only take one instance for it to be worth the investment.

KyleJB

By KyleJB on Jan 13, 2008

An excellent post!

Did you know that the original iPod profit margin at time of release was nearly 50%? Prices have since come down since then…

http://www.isuppli.com/news/default.asp?id=7308

…I personally couldn’t justify the expense when a blackberry (erm ok its turned into a crackberry now) could do the same things an iPod but with much less initial cost with contract rebates, etc.

By chrischow on Jan 13, 2008

@KyleJB – Funny, your response includes how you survived before (calling your friends), and that’s something I’ve done to my brother a few times (usually when I’m lost). I think you forgot to mention the pleasure some people get in showing off their new gadgets, which can change depending who’s with you at the time.

I used to think having fewer gadgets was an advantage, I’ve been using my cell phone’s camera instead of buying a new one, however, I think the benefit is almost entirely miraged by the failure of my phone do really do what a camera can. In any low-light situation, I will not be able to get a decent picture. My phone also has GPS & Navigation, but compared to a stand-alone device it falls very short. Same with its music & video functions. Everything just sort of works.

So, I think your comparison to AAA insurance falls apart for that reason, because the addition features don’t always work. So, a better comparison would be having some kind of auto-insurance that includes road-side assistance, but its restricted by location or hours or type of emergency. Most of the time you’ll be covered but there are certainly situations where the full-blown AAA would be the only option.

This actually DECREASES the marginal utility even further, and perhaps its worse because it gives you a false sense of increase in the marginal utility. So, while it might be more expensive to buy a camera/music player/phone/gps, and difficult to carry them around with you, having a single device that tries to do all of them will surely fail for each device it tries to replace.

By RohoMech on Jan 14, 2008

@Presh – I wonder if the apple commercial hints at a huge cost of having those things constantly nearby you.

In the past, if you called someone’s home and they didn’t answer, you’d assume they were unreachable. Eventually pagers were common and that at least alerted people to someone’s call, but then if you didn’t return the page quickly that person could get upset. The same thing is happening with cellphones.

So, by the same analogy, by having a device which lets you be increasingly available, you could end up sacrificing your alone-time.

By RohoMech on Jan 14, 2008