When selling virtual products abroad, don’t put prices on autopilot — Joey Conway and Catherine Tucker

MIT Sloan Assoc. Prof. Catherine Tucker

MIT Sloan Assoc. Prof. Catherine Tucker

From TechCrunch

If you have a physical product that you want to sell in more than one country, determining the price in different markets can be challenging. You might have to open an office in each country, or at least hire a consultant to assess local demand and analyze the competition.

But if you have a virtual product — say an app for a mobile phone — setting the price for it in different countries is easy. Using the individual exchange rate, the app store instantly will convert the price from your home country to any of the world’s many currencies.

This is, very likely, how prices are set for most smartphone applications sold in different countries. As developers prefer to spend time solving technical challenges, it is all too convenient to leave the responsibility of currency calculations and pricing to Apple or Google or some other virtual marketplace.

But is this the best approach when sellinginternationally? Is there a more profitable way to price virtual products sold in different currencies?

We explored these questions in an experiment that was both a real-world business trial and an academic exercise. We wanted to see whether we could boost revenue for a virtualproduct, Root Checker Pro, an app that helps Android users customize their phones. The app is sold through Google Play — the app store for Android devices — in more than 130 countries.

For our experiment, we selected six different currencies — Australian dollar, Canadian dollar, British pound, Mexican peso, Malaysian ringgit and Saudi riyal. Over six months, we charged various prices for the app in each of the currencies to see how sales and revenue would respond.

Read the full post at TechCrunch.

Joey Conway is creator and owner of Android app Root Checker Pro. He received his MBA from the Sloan School of Management in May 2015.

Catherine Tucker is a Professor of Marketing at MIT Sloan.  She is also Chair of the MIT Sloan PhD Program.

How a technology-push process led to the reboot of Google Glass — Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Wired

Google Glass exploded into the tech scene in 2012 with the pomp and circumstance of an Apple product unveiling.  It put “wearable technology” into the lexicon of the masses.  Accolades poured in from both the technology world and the fashion world.  Celebrities, politicians, runway models, even Prince Charles wore them in public.  And yet, as of January 2015, Google Glass as we knew it was no more.

There are many great articles that explored what went wrong. I will not repeat the many excellent points made.  Instead, I would like to explore how Google approaches new technology development, and how that approach, together with the initial public relations hype and the lack of a killer app, ultimately led Google Glass down the path of a reboot.


First of all, Google is fundamentally a technology company, run by technocrats. They even make product manager candidates do whiteboard coding during job interviews.  Google does not define and develop products like Proctor and Gamble: through market pull and problem identification.  Instead, Google consistently pursues products as technology pushes.  This approach often results in solutions that are either in search of a problem, or solves a problem in a less-than-effective manner. Think about Google+,Google Wave, Google Health, or other former Google projects which were subsequently shelved.

A technology push process is not necessarily an invalid strategy for Google.  With an R&D spend of $2.18B in Q4 2014 alone, Google can afford to take large-scale risks.  So, they try many things – and some fail.  Project Glass’s first incarnation happened to be one of them.

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Google and the right to be forgotten — Catherine Tucker

MIT Sloan Assoc. Prof. Catherine Tucker

From Nikkei Business

The European Court of Justice’s ruling that Google must honor individuals’ requests to be removed from search results—the right to be forgotten, as it has come to be known—is a misguided attempt to address one of the more unfortunate aspects of the digital age.

Although digital technology has brought many wondrous advances, it also has spawned problems. Among the most serious is what I call digital persistence or the tendency of information in digital format to last for a very long time—regardless of its accuracy.

In the analog era, if a telephone directory listed a number incorrectly, the result would be missed calls and wrong numbers until a new directory was published a year later. But in the digital world, wrong information gets repeated again and again, often showing up long after the original mistake was made.

While digital technology can perpetuate the mistakes others make about us, it also has the same effect on the mistakes we make ourselves. For example, young people by nature do silly things. Sometimes they take digital photos of themselves doing these silly things. The pictures can resurface years or decades later, when the actions no longer seem so amusing.

An approach that addresses these problems by targeting Google is flawed in several respects. First, while Google may be a handy scapegoat, especially in Europe, the American search giant is far from the only source of digital data that threatens the right to be forgotten. Information persists also in government records, online newspapers, and social media, as well as other search engines. To rein in Google while leaving other major information sources unimpeded will have little effect on the overall problem.

Second, the European Court of Justice’s actions ignore the nature of search engines. They work so well because they are automated. The combination of sophisticated algorithms, high-speed networks, and the Internet’s vast stores of data is what produces Google’s instantaneous and usually on target results. Introduce humans into this formula via requests to be forgotten and Google’s performance will slow to a crawl.

A third problem with the ECJ’s approach is that the process of approving requests to be forgotten can have precisely the opposite effect of what the architects of the policy intended. When someone asks to be removed from search results—say, a politician concerned about rumors of an illicit affair—the request itself sparks interest. In the case of the politician combating damaging rumors, reports of a request to be forgotten prompt new speculation and more rumors, even if the politician isn’t mentioned by name.

Digital persistence unfortunately is a problem that will be with us for some time. There are no quick or easy answers. Aiming at one very big target may be a popular move, but it will not bring us any closer to resolution.

Catherine Tucker is the Mark Hyman Jr. Career Development Professor and Associate Professor of Management Science at the MIT Sloan School of Management.

Why the battle of computer services companies is good news for businesses — Charles Kane

MIT Sloan Senior Lecturer Charles Kane

MIT Sloan Senior Lecturer Charles Kane

In the early days of computers, companies used a fee-for-shared-service model for technology. It was common to pay a company like IBM rent for use of its mainframe machines. As computers became smaller and less expensive, businesses began to purchase their own equipment and the computer rental model went the way of the dinosaur. Interestingly, we’re now seeing a return to that old model, but instead of computers, businesses are renting web and cloud infrastructure services for apps and storage.

This is great news for small- and medium-size companies, as building the data centers to run those services is exorbitantly expensive. By only purchasing the infrastructure cloud services that they need from large companies like Microsoft, Google and Amazon, they eliminate the risk of that huge financial investment.

Even better, we’ve seen recent price wars among those service providers. Some of them slashed their prices by as much as 85 percent this spring in an effort to attract and retain customers.

I sit on the board of several companies that are dependent on web services and have seen this decision to rent play out several times. A good example is Carbonite, which is launching its computer backup services across Europe and recently joined the ranks of Amazon customers for web services. The decision for Carbonite was simple: If it were to build its own data center, not only would it cost excessive funds, it would have to maintain it and then (all too soon) upgrade it. It would be akin to building its own telephone or cable company instead of simply renting what it needs from a provider like Verizon or Comcast.

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Behind Facebook and Google’s random acquisitions — Catherine Tucker

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

From Fortune

A lot of attention has been paid lately to big tech companies buying up smaller firms in billion-dollar deals: In January, Google acquired Nest for $3.2 billionFacebook purchased mobile message service, WhatsApp, the following month for $19 billion; last week, it acquired virtual reality gaming company, Oculus VR, for $2 billion. There is a lot of discussion about the motives behind these large deals. Some say they are attempts to block competition, while others maintain they are efforts to stay relevant.

I see these deals as a reflection of the uncertainty companies face as they try to identify the next big thing. This is especially true for successful companies like Facebook (FB) and Google (GOOG), which are known for doing what they do tremendously well. They’ve seen similarly successful companies like Kodak struggle as technology moves on, rendering its product obsolete. As a result, companies today are eternally motivated to look outside their current business.

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