Fair is Fair (Red Gate and CRTC)

I've been reading a book called "Your Brain At Work" by David Rock lately. It is really about how your brain works (or doesn't) during the day both at work and at home. The concept is that if you understand, you can use the knowledge to your benefit by controlling how you think and react to the world. This is one of the best books I have read for its impact on my own thinking.

In the book the author states that we are wired to know what is fair and what is not. In fact survival often depended on people's ability to detect other people who did not behave fairly and avoid them (or punish them) in the future. The brain treats unfairness similar to any other threat, real or perceived. Therefore, it is a very powerful driver of emotion and people will remember unfairness (and seek revenge) for a long time (some will take it to the grave).

As an aside, one of the things the brain does is avoid uncertainty (i.e. hard tasks where the outcome is not certain) and is easily distracted.

So I was following twitter more than I normally do and picked up two main threads:

  1. Red Gate, the makers of .NET Reflector, and
  2. CRTC, the makers of decisions regarding communications and televisions here in Canada.

Both of these organizations made decisions recently that triggered a very strong unfairness reaction.

Red Gate

Apparently, Red Gate promised the developer community that they would keep .NET Reflector free. After several years they realized that supporting software that you give away for free costs a lot of money; money they were no longer prepared to throw away. (I could have told them that for free.) They are going to charge developers $35 for version 7. The wrinkle, the current "free" version is time-bombed to ensure developers always stay current (so they don't have to support old versions. Essentially, developers are being forced to upgrade to the paid version or stop using it.

Red Gate is perceived as making lots of money on their other products.

Now the developers that are screaming the loudest are highly paid consultants and forking over $35 is trivial.

Except the "this is not fair" part of the brain has perceived this to be a significant threat. And once the brain perceives a threat (even a fairness one), it will not rest until the matter is resolved or you consciously let it go (which is harder than you think).

CRTC and Usage Based Billing

The ISPs in Canada requested that CRTC approve usage based billing for Canadian Internet users. Canada already has some of the highest Internet usage fees in the western world. Most ISPs put a cap on bandwidth usage on a monthly basis and wanted a clear ruling that they could charge for excessive usage. With the proliferation of services like NETFlix bandwidth usage is skyrocketing so the caps that are in place would kick in a lot more often… this could be big bucks.. especially considering the extra usage fees are out of line with incremental costs ($2 per GB on many plans) to the ISPs.

The problem is that most of the major Canadian ISPs are also in the phone, wireless, satellite and wired television business. Services like NETFlix get to use the infrastructure for free to distribute competing services. Infrastructure in a country spread out like Canada is likely expensive. The incumbents would like to restrict the competitors or get compensated. This is just business.

The Internet is largely perceived as being about buying a pipe and then using that pipe as much as you want (unlike wireless data plans).

The major ISPs are also large businesses. So even if you can see their point of view, there is not a lot of sympathy built in; especially when Canadians are told other countries get Internet with unlimited downloads for much less.

The fairness alarms are being sounded. Again, by people who really could afford to pay a little more for heavy usage. So again it is not really about the money.

It is the perception of unfairness.

And people are not going to take it anymore!

Conclusion

As a business owner, you need to really understand how people work. If you don't, you will make mistakes that could be fatal.

The people at Red Gate were being logical and appealing to developers based on logic. (Who would have thought) It backfired, because the fairness rule was violated and logic does not apply.

The CRTC was seen as siding with big business even though the decision probably made logical sense when presented by the big ISPs.

So something like trying to get lots of subscribers based on free services with the intention of charging later just might backfire.

So be clear in your intent and stated communications, free now but pay later or free now and always. It is hard to change later.

Remember, fair is fair.

(Red Gate can possibly fix things by releasing one more free version that is not time-bombed or open sourcing the current version; then start charging. The other one, well it is in the hands of politicians now.)

By | 2017-04-03T11:47:55+00:00 February 3rd, 2011|Categories: Doug's Blog, Leadership, Mindset and Motivation, Software Development|

About the Author:

Doug Wagner is an entrepreneur, President and Co-founder of Sunwapta Solutions. Sunwapta's mission is to help businesses transform from surviving to thriving, sustainable growth. From strategy to implementation, this means marketing, sales, managing your brand and delivering consistent value. Get more clients and keep them.