Episode #492: The 'Third Rail' of Pricing — More on Price Discrimination

NEW SHOW FEATURE: If you want to ask Ron or Ed a question and be featured on the show, please submit a voice recording from any device at https://thesoulofenterprise.com/questions

SHOW SUMMARY: Join Ron and Ed for an enlightening episode where we draw pivotal lessons from the extraordinary planning and execution of D-Day, as detailed in the National Review article, "D-Day at 80: How the Allies Won at Normandy and Changed History." Discover how meticulous preparation, clear communication, adaptive strategies, and resilient leadership led to one of history's most significant military successes. We'll translate these historical strategies into actionable project management tips for today's knowledge workers, helping you navigate complex projects and achieve your goals with precision and determination.

Use these show notes to follow along with the audio:

Segment one

• One of our “golden oldies” shows is all about pricing. Episode number 196: Top Ten Pricing Lessons https://www.thesoulofenterprise.com/tsoe/topten

• What is first-degree price discrimination? Also known as perfect price discrimination, first-degree price discrimination involves charging consumers the maximum price that they are willing to pay for a good or service. https://corporatefinanceinstitute.com/resources/management/price-discrimination/ 

• Ed brought up this definition of price today. As George Mason University economist Alex Tabarrok succinctly puts it, “A price is a signal wrapped up in an incentive.” https://www.discoursemagazine.com/p/prices-are-not-the-problem 

• From today’s show: Prices contain three primary functions: They transmit information. They create an incentive to allocate resources to the most valuable use. They distribute income. (The last one is often forgotten)

• What is the technical definition of price discrimination? Price discrimination is different prices for different customers based on their willingness to pay. It doesn't have anything to do with costs.

Segment two

• Have you heard about Reframe 2024 yet? Hector Garcia — long time friend of the show — is at it again helping accountants with better communications skills and influencing conversations with their customers. Use coupon code TSOE for a preferred price https://www.reframe2024.com/ 

• The first full week in August will be a co-branded event with Reframe and MetaConsulting Academy. You haven’t hear of MetaConsulting Academy yet? Ed launched it TWO days ago! https://www.metaconsultingacademy.com/  

• Why is Ron upset with Uber? “I think they fail — big time — with price transparency.”

• Regarding first-degree price discrimination, one of the limiting factors is being too hyper with this. If people don't believe the price is fair they're going to seek out alternatives.

Segment three

• Ron: “So let me tell you my Uber story…” He received a quote from Uber for $116 but there was an additional booking fee of $20 on the receipt. On the return trip, he reserved a time and the booking fee was $26!!! 

• Regarding Ron’s Uber experience: “It’s all about feelings and fairness but that's price transparency. This is why we've been railing against the billable hour for 40 years because it's not transparent in terms of your price.“

• Did you know that before John Wanamaker invented the price tag, most buying in the United States was done by haggling? More here: https://www.pbs.org/wgbh/theymadeamerica/whomade/wanamaker_hi.html 

• As a construct, democracy is the worst way to make pricing decisions. The great thing about the pricing mechanism is you get to decide exactly if it's worth it to you or not. 

Segment four

• A creative idea from Ron today: “Take your specific congressman in your district, and look at the ratio between what he votes for spending divided by what he votes to increase revenue for the government spending over revenue. Take that ratio and you multiply it by your total tax on your 1040.” Genius!

• If you understand price discrimination that's how it was done by cosmetic companies. They have the same makeup sitting in Nordstrom and CVS, but they charge radically different prices for it, because those are different segments of the market.

• Ron Baker on the show today: “When I shop for flights, it's not so much timing. I shop by plane…and they charge higher prices for the Dreamliner.”

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #491: Project Management Insights from D-Day

NEW SHOW FEATURE: If you want to ask Ron or Ed a question and be featured on the show, please submit a voice recording from any device at https://thesoulofenterprise.com/questions

SHOW SUMMARY: Join Ron and Ed for an enlightening episode where we draw pivotal lessons from the extraordinary planning and execution of D-Day, as detailed in the National Review article, "D-Day at 80: How the Allies Won at Normandy and Changed History." Discover how meticulous preparation, clear communication, adaptive strategies, and resilient leadership led to one of history's most significant military successes. We'll translate these historical strategies into actionable project management tips for today's knowledge workers, helping you navigate complex projects and achieve your goals with precision and determination.

Use these show notes to follow along with the audio:

Segment one

• Today’s show was inspired by an article in National Review by Andrew Roberts. Link to the article is here https://www.nationalreview.com/magazine/2024/07/d-day-at-80-how-the-allies-won-at-normandy-and-changed-history/ @aroberts_andrew

• TIL from Andrew’s article in National Review: On D-Day the Allies flew 13,688 [sorties]. In all, some 11,500 Allied warplanes of various types took part in D-Day, of which only four were shot down https://www.nationalreview.com/magazine/2024/07/d-day-at-80-how-the-allies-won-at-normandy-and-changed-history/ 

• “Project management is not a team sport. There's got to be one person ultimately, who's responsible” —Ed Kless

Segment two

• Join Ed and Ron at REFRAME 2024, “INFLUENTIAL CONVERSATIONS FOR ACCOUNTANTS” Use the code TSOE for 25% off the preferred price https://www.reframe2024.com/

• For D-Day, Eisenhower knew it is the act of planning that is important, not the plan itself. His famous quote on this is, “Planning is essential. Plans are worthless.”

• From “Rumsfeld’s Rules: Leadership lessons in business, politics, war in life”, he wrote ”The paradox of planning is no strategy will be executed as originally conceived.”

• Also from Rumsfeld, “What you see is what you get. What you don’t see, gets you.”

• What did Ed notice about the D-Day story from today’s show? The use of humor in the face of dark times. It can be such a strong leadership skill.

Segment three

• Goals vs objectives of D-Day: Overarching goal was to establish the beachhead. It is a goal which is that to which we aspire but may or may not happen. Objectives are the more tangible items of number of troops, number of planes, and so on.

• In project management terms, what is an assumption? Assumptions are facts which you presumed to be true.

• “My notion of scope seep is stuff that we do on our own, because we think that's what the customer wants.” —Ed Kless

• In project management terms, constraints are our barriers to completion. We know about them ahead of time. 

Segment four

• “How Ike Fought Antisemitism” https://www.nationalreview.com/2024/01/how-ike-fought-antisemitism/ 

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #490: Friday Farrago

NEW SHOW FEATURE: If you want to ask Ron or Ed a question and be featured on the show, please submit a voice recording from any device at https://thesoulofenterprise.com/questions

SHOW SUMMARY: Time once again for another alliterative assembly with a dash of associated assonance as Ron and Ed pull together a patchwork of punditry. In other words, Ron spent a lot of time on planes last week and digested six issues of The Economist and has a few things to say about it.

Use these show notes to follow along with the audio:

Segment one

• So what is a farrago exactly? It is a confused mixture, from the latin meaning mixed fodder. FAR = corn

• A big thank you to Hector Garcia and the team for sponsoring The Soul of Enterprise. They have a conference coming up called REFRAME. Use discount code TSOE until the end of June https://www.reframe2024.com/

• Did everyone see the Apple ad that was brutally shredded by a subset of fans and critics in the tech space? https://www.youtube.com/watch?v=ntjkwIXWtrc  

• Here’s an update from our tech trends show from last week. The Economist has an article called, “The AI doctor will see you….eventually” https://www.economist.com/leaders/2024/03/27/the-ai-doctor-will-see-youeventually 

• A big thank you to Art Kuesel of Kueselconsulting.com for being a Patron of the show at Patreon.com/TSOE. Thank you Art! 

Segment two

• Will FTX customers be made whole? The Economist talks about how creditors have clawed back significant assets https://www.economist.com/finance-and-economics/2024/04/04/will-ftxs-customers-be-repaid 

• Hello GPT-4o, OpenAI’s new flagship model that can reason across audio, vision, and text in real time: https://openai.com/index/hello-gpt-4o/ 

• This is a great article from Gale Pooley (guest of the show) about “another monopoly undermined”. This one? Diamonds. https://galepooley.substack.com/p/another-monopoly-undermined-by-innovation 

• Last week, FEE quipped, “This doesn't make socialism look very attractive” and published a great called, “A Marxist Professor’s (Failed) Attempt to Explain How Socialism Would Deliver a PS5” https://fee.org/articles/a-marxist-professors-failed-attempt-to-explain-how-socialism-would-deliver-a-ps5/ 

Segment three

• At the beginning of segment three, let’s just say that Ed is having too much with the new ChatGPT-4o model. By the way, if you have not installed this app on your phone — for free — and had a conversation with it, give this a shot.

• Here’s a great article from Andrew Stuttaford, guest of the show, called “ESG/Stakeholder Capitalism: Letting Oil Companies be Oil Companies (or not)” https://www.nationalreview.com/2024/05/esg-stakeholder-capitalism-letting-oil-companies-be-oil-companies-or-not/ 

• Goldene is the latest 2D material to be created since graphene in 2004: https://www.livescience.com/chemistry/worlds-thinnest-gold-leaf-dubbed-goldene-is-just-1-atom-thick 

• Unilever’s new CEO has explained that “the company is underestimated how hard it's going to be to meet some of its environmental targets”. Here’s the article with background titled, “An Example for All? Unilever Gets Real With Environmental Goals” https://practicalesg.com/2024/05/an-example-for-all-unilever-gets-real-with-environmental-goals/ 

• Do you have a burning question for Ron or Ed? We have a NEW feature on the website. Any device will work. Here’s the link: https://www.thesoulofenterprise.com/questions 

Segment four

• “Free Wine at a New Italian Restaurant Is Doing the Impossible” (separating us from our phones) https://www.tfp.org/free-wine-at-a-new-italian-restaurant-is-doing-the-impossible/ 

• Productivity gurus through time: a match-up; James Clear v Arnold Bennett https://www.economist.com/business/2024/04/11/productivity-gurus-through-time-a-match-up 

• A conversation continued from the bonus episode, there is a company called P/S that is offering subscriptions for a higher end airport service (but still a commercial flight). More on their pricing is here: https://reserveps.com/pricing 

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #489: Technology Trends with Greg Tirico

In this episode, Ron and Ed welcome back Greg Tirico to delve into the 2024 Tech Trends Report from Future Today Institute, a whopping 980-page behemoth at FutureTodayInstitute.com/trends. The report unveils a groundbreaking concept: the arrival of a technology supercycle, blending AI, biotech, and connected devices to shape a transformative era. Join us as we explore key trends like the burgeoning space race, the bioengineering revolution ushering in a new era of healthcare, the accelerating impact of AI across industries, and the evolution of work environments to embrace flexibility and skill-focused tasks.

Our regular show notes editor was our guest, so, here are some abbreviated show notes:

Overview of the 2024 Tech Trends report from Future Today Institute

• Overall thesis: The economic super cycle comes for technology. The current technology supercycle is so pervasive we may not even notice it.

  • What is a super cycle again? "Super cycles are commonly defined as lengthy periods of economic expansion, often accompanied by growing GDP, strong demand for goods leading to higher prices and high levels of employment.”

• Major factors in the tech supercycle:

  • Artificial intelligence

  • Biotechnology

  • Connected devices

• In and of themselves these trends can be significant but their convergence is what the report is calling out. This is the technology supercycle to which they refer.

About the report

• In our guest’s opinion, this is the best replacement yet for Mary Meeker’s internet trends report (which appears to have ceased publication in 2019)

• 17th edition of the tech trends report

• A ridiculous 980 pages at FutureTodayInstitute.com/trends

  • We are able to talk about and use this material because of the gracious Creative Commons license applied to it by the Future Today Institute. “This material is copyrighted by Future Today Institute and licensed under the Creative Commons 4.0 International License (CC BY-NC-ND 4.0).”

• There are 20 total trends in the report. We covered four on the show: Space, Bioengineering, Artificial Intelligence, and Work Environments

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #488: Wealth’s Way — The Wisdom and Wonders of Shareholder Capitalism

Thomas Sowell has written that “Profits are perhaps the most misconceived subject in economics.” Join Ed and Ron as we explore R. David McLean’s superb new book, "The Case for Shareholder Capitalism: How the Pursuit of Profit Benefits All." Rooted in mutual benefit and prosperity, shareholder capitalism fosters an environment where individuals thrive. Shareholder capitalism upholds the belief that profit serves as a catalyst for societal progress, driving innovation and growth.

Use these show notes to follow along with the audio:

Segment one

• C. S. Lewis: “We don’t need to be taught new ideas so much as to be reminded of old truths.”

• 1/3 The difference between accounting, finance and economics: Finance is defined as the science or study of the management of funds, the circulation of money, the granting of credit the making of investments, and the provision of banking facilities

• 2/3 Accounting is the system of recording and summarizing business and financial transactions and analyzing, verifying and reporting the results

• 3/3 Economics is social science concerned with analysis of the production, distribution and consumption of goods and services.

• “If you are taking end of year discounts, you’re basing your pricing on the position of the Earth on its revolution around the sun. There's a word for that. It's called astrology.” —Ed Kless

• From today’s show: Cashflow is ultimately driven by profits over the long run. They're the same but the timing and differences can be massive. Just look at Amazon for an example.

• Thomas Sowell: “Profits are perhaps the most misconceived subject in economics.

Segment two

• On the discussion of shareholder capitalism during today’s show: Shareholders eat last. By definition. Look at the P&L. 

• From R. David McLean’s superb new book, "The Case for Shareholder Capitalism: How the Pursuit of Profit Benefits All,” he points out many young firms have negative profits, but are still worth millions or even billions of dollars. https://www.cato.org/multimedia/events/case-shareholder-capitalism-how-pursuit-profit-benefits-all 

• Rate. This. Podcast. In 15 SECONDS or less! Just use this link: RateThisPodcast.com/TSOE

• From McLean’s book, the stakeholder fallacy is defined as the popular misconception that corporations put the interests of a shareholder first and overlooks firm's other stakeholders. The fact is, they all are on an equal footing.

Segment three

• In Chapter 8 of David McLean’s book, he talks about the definition of corporations based on a business roundtable. His excerpt is attached.

• What is stakeholder capitalism? There are only two possibilities. 1) stakeholder capitalism is the same as shareholder capitalism 2) stakeholder capitalism is an oxymoron https://www.cato.org/multimedia/events/case-shareholder-capitalism-how-pursuit-profit-benefits-all 

• If you're driving short term benefits at the expense of long term profits than your stock price is going to decrease https://www.cato.org/multimedia/events/case-shareholder-capitalism-how-pursuit-profit-benefits-all 

• Market cap is proof of a future focus. If we weren't focused on the future, we wouldn't have market capitalization. So the fact that it exists at all is proof that the short term thing is a fallacy. 

Segment four

• From The Case for Shareholder Capitalism: How the Pursuit of Profit Benefits All, “Stock repurchases do not inflate or have any mechanical effect on stock prices. This is Finance 102.” https://www.cato.org/multimedia/events/case-shareholder-capitalism-how-pursuit-profit-benefits-all 

• David Deutsch, physicist: “There is no resource management strategy that can prevent disasters. But there are ideas that can cause disasters and one of them is notoriously the idea that the future can be scientifically planned.”

• What a great book from today’s show. Check out "The Case for Shareholder Capitalism: How the Pursuit of Profit Benefits All.” https://www.amazon.com/Case-Shareholder-Capitalism-Pursuit-Benefits/dp/1952223881 

Buy on Amazon

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits.