[Jason Stoddard]

 
In economic theory there is pricing concept called ​"charge what the market will bear”, meaning set prices based on what customers are willing to pay, not based on costs. The reason that already insane prices keep getting more inflated is very simple: Enough customers are willing to pay to make it worthwhile for the manufacturers. (The fact that many of these customers are literally dying off is a different matter and something those same vendors seemingly pay no attention to.) Solution: Say 'when' and seek out vendors that make great gear at reasonable prices. I sometimes get depressed visiting one Bentley-like room after another at various audio shows, but then I visit companies like audioengine, Schiit, and Elac (plus Zu for their awesome music) and I feel happy again.

Okay, time to get a bit snippy (not with you, but with the suit-wearing theorists who have never made a product in their life.)
 
Hell with theory, here's a fact: charge such that your products have by far the highest value, and you won't waste money on research, advertising, A/B testing, customer coddling, psychoanalysis, fancy packaging, product variants, line extensions, channel support, retail management, optimal rate of return, neural algorithms, and all the nonsense you need to support "charge what the market will bear," plus your company won't go kerploof when (not if) a competitor providing stunning value undercuts you.
 
Or, in other words, deliver value that nobody else can touch, and you'll always do fine.

 

[jfoxvol]

^^^drops mic

 

[artur9]

 

That seems a bit subliminal to me.  The biggest words say, "Spend Money To Impress People."
 
Being a hermit could help inoculate against such feelings.

 

[tonykaz]

cleared the Air and Room with that one.
 
Tony in Michigan
 
ps.  what happens when a person gets a bit greedy or a bit sloppy or starts burning the customers?

 

[XenHeadFi]

 
Okay, time to get a bit snippy (not with you, but with the suit-wearing theorists who have never made a product in their life.)
 
Hell with theory, here's a fact: charge such that your products have by far the highest value, and you won't waste money on research, advertising, A/B testing, customer coddling, psychoanalysis, fancy packaging, product variants, line extensions, channel support, retail management, optimal rate of return, neural algorithms, and all the nonsense you need to support "charge what the market will bear," plus your company won't go kerploof when (not if) a competitor providing stunning value undercuts you.
 
Or, in other words, deliver value that nobody else can touch, and you'll always do fine.

"Charge what the market will bear" always seemed like a very short-term viewpoint. Get more from your customers now at the expense of future customers. This is an issue with the "Hired Gun" mentality of so many CEOs. They are hired to make themselves and the company look good in the short-term, while destroying future value and even the life-blood of the company for that short-term boost.
 
Value seems to work in a large percentage of time, like Walmart. Value works until someone gets greedy, like Walmart.

 

[Baldr]

Value can neither be mandated nor created; it is not even tangible.  It is the quantification of perceived benefit.  It is strictly in the mind of the beholder.  Jason and myself expend much energy in the quest to provide exactly this in our products.  Now the trick here is to realize that value belongs not just to us but to our users as well.  Value cannot exist without both a provider and a user.  The key idea here is empathy with our users.
 
The higher the value, the more willingness there is to buy.  Marketing is necessary only to the extent of a lack of value.  More plainly stated, marketing is only necessary to sell products which no one wants.  At Schiit, we have no marketing department, only a brand.  This leaves us free to redeploy misguided marketing resources to further value.  
 
If a company does not believe in value, it is not that it believes in nothing.  It will just have to resort to campaigns of coercion to succeed or go out of business.

 

[thejammonster]

  Who’s going to kick you in the can? When will you do your writing, or company-building, or adventuring, or whatever you want to do?

 
This line gave me chills.  I'm late to the game but I look forward to reading every word!  Also, my Schiit arrives in the mail tomorrow and I can't wait 

 

 

[jimmers]

Originally Posted by Baldr /img/forum/go_quote.gif
 
Jason and myself expend much energy in the quest to provide exactly this in our products.  Now the trick here is to realize that value belongs not just to us but to our users as well.  Value cannot exist without both a provider and a user.  The key idea here is empathy with our users.
 

Well, you got me.
 
Your and Jason's posts on this and other Schiit threads got me on board - felt a little guilty that I had no Schiit gear  though - I thought I owed you that for the information 

After getting headphones, amp and speakers for my PC I started thinking about a DAC, I had a number of low priced ones, Sabre, BB and Wolfson, but I was looking for something in my comfort zone (<AUD1,000) that should be an improvement. 
R-2R has always appealed, something elegant in the simplicity of the idea. 
Then the Bimby was released, Bimby ordered. 

 

[Bansaku]

Fantastic chapter! In my opinion, best one yet.
 

   
But is it fun? Maybe that’s a better metric. Is it as thrilling as that first taste of exceptional sound? Is it so much fun that it eclipses everything else in your life?
 
Maybe it is. But maybe it isn’t.
 
Aaaaand…if you aren’t having fun with your gear, your gear is having fun with you.

 
It is called " Chasing The Dragon "; Once you get a taste of something good you absolutely have to find the dish that trumps that first bite.
 

 

[Torq]

For me, that "first taste of exceptional sound" was walking into my local hi-fi dealer and hearing, of all things, a NAD 5120 turntable, 3020 integrated amplifier driving what I think were NAD re-branded Mission speakers, playing "Sirius" by "The Alan Parson's Project" off the "Eye in the Sky" album.
 
It wasn't a demo or anything, it was just playing the main floor area of the store.
 
A month later I'd bought a Linn Axis, Creek 4140 and Linn Helix speakers ... more records than I could really afford, and was in heaven ... and down the rabbit hole I went ...
 
Only a few moments in my audio explorations have measured up to that first taste ... my LP12, my first Meridian CD player (500 series), doing a full reset to an aktiv Linn DS setup and in the headphone space, my first headphone amplifier (a HeadRoom Supreme ... the early one that took 4x AAs internally), and today the Yggy/Rag combination into LCD-2.2c.
 
The Bifrost/Lyr/HE500 (and later LCD-2.2c) was very satisfying for three years or so, and was immediately impressive, but not on the same level as this latest duo (the Bifrost/Lyr/HE500 setup was a "wow" moment ... the Yggy/Rag/LCD-2.2c was a "HOLY SCHIIT" experience).

 

[BeyerMonster]

 
Value seems to work in a large percentage of time, like Walmart. Value works until someone gets greedy, like Walmart.

In all fairness to Walmart, they've always done an exceptional job of providing value to their customers.
 
Any/all "greed" is in their dealings with vendors and/or their employees, but they generally pass savings all the way back to the customers that walk in the door.

 

[catspaw]

There are many ways to get a reality check:
-Getting a woman, wife or girlfriend is probably the most effective, but also the most limiting, so I can advice that one .
-Looking at your bank balance before making a purchase (this is a good one ).
-Taking extra time to think a purchase through (when you are SURE you want to buy something, wait a month. If you are sure one month later, ok, if not, you never wanted it in the first place).
-Ask an opinion of someone who you both know and trust (you most likely KNOW what they are going to say, but its still a good idea to ask regardless, becasue even if you who waht they think, they might give you reasons or ideas you did not think about).
 
 
And if all that fails.... sorry about your wallet.

 

[superjawes]

Okay, time to get a bit snippy (not with you, but with the suit-wearing theorists who have never made a product in their life.)

Hell with theory, here's a fact: charge such that your products have by far the highest value, and you won'twaste money on research, advertising, A/B testing, customer coddling, psychoanalysis, fancy packaging, product variants, line extensions, channel support, retail management, optimal rate of return, neural algorithms, and all the nonsense you need to support "charge what the market will bear," plus your company won't go kerploof when (not if) a competitor providing stunning value undercuts you.

Or, in other words, deliver value that nobody else can touch, and you'll always do fine.

Reminds me of your food/cooking/restaurant chapter/analogy. Which theory do you think McDonald's uses?

 

[Rudiger]

 
That seems a bit subliminal to me.  The biggest words say, "Spend Money To Impress People."
 
Being a hermit could help inoculate against such feelings.

The doctor : and what about this one ?
 

 

[tonykaz]

Mr.Baldr,
 
On your Value Inditement,
You present a strong case, even a powerful case.  You carefully build solutions for actual needs, without fluffiness, glamor, extravagant sales forces, 5% advertising costs and without expensive Satellite Sales Offices located in Expensive Retail Space ( my old Salon we called Esoteric Audio ) who demand 50% of sale price ( for their overhead costs ).  After 5 years of operation, the actual customer base somehow seems to discover you, trust you, buy from you and you begin to prosper.   And then you have the balls to go out and tell everyone how you did it!   Pouring Salt in wounds is an Uber-understatement. 
 
On your Higher Value Inditement,
This one is the mother of all Bunker Busters.  It's Concussions and Shards hit the Entire World of Retail Audio.  Stereophile's JA is starting to mandate his reviewers stay the hell away from you-all.  If Harry Pierson is their Anointed god, you must be their Greater Satin.  Where is their jihad against you?, I keep looking for it, waiting for it, I'm anticipating something but they seem to be offering nothing. ( our local LINN dealer even did a Headphone Meet ).  They desperately need a Donald Trump type to go out there and start trouncing Headphones and outfits like Schiit for ruination of their (god loving) Industry. Are they simply loosing by default?, or has the magnician's Curtain been pulled back so decisively that there is no way for them to recover their Monopoly?   
 
Headphone folks are only a short step away from connecting up a pair of Emotiva Active Speakers to achieve Mixing Studio level, room filling music systems. It doesn't seem to be happening much.  Perhaps folks have permanently veered away form traditional home audio music systems.
 
All the Excitement in Consumer Audio is right here, all the drama and pathos.  We're seeing the death of one form and birth of another.   
 
Apple is the Culprit, Schiit and Retail Audio are only reacting to the Greater Forces.
 
But Schiit seems to be the only ones to offer plausible explanations, I applaud you.
 
Magico & MSB type Retailers are the "Death Rattle" of all that went before them.
 
Tony in Michigan