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It's always about economics

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James Robertson

Posts: 29924
Nickname: jarober61
Registered: Jun, 2003

David Buck, Smalltalker at large
It's always about economics Posted: Oct 3, 2005 6:52 AM
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This post originated from an RSS feed registered with Agile Buzz by James Robertson.
Original Post: It's always about economics
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Here's something that everyone (including me) who's a product evangelist needs to keep in mind - the actual economics end up mattering. The link is to RealTechNews, where they examine the decision making process for hybrid cars (like the Prius):

“White first looked at trading in his Subaru for a Prius, and found that at roughly $3 per gallon for gas, he wouldn’t recover his financing costs. Joe figured that at his annual mileage, he’d save about $746 a year in fuel costs, but it would take too long to recover the premium he’d pay for the hybrid.
“Next he looked at the hypothetical situation of someone without a car looking to buy either a Honda Civic or the Prius. In this case, the fuel savings were roughly $506 per year, versus a purchase price difference of about $8,000. Without even considering cost-of-money issues, it would take nearly 16 years just to break even.” Source: Autoblog

Costs/Benefits analysis is something we all do implicitly. We don't always get the facts right (leading to seemingly odd decisions), but we still do it. In the example above, we see that hybrids aren't going to sell well until fuel gets a lot more expensive, or the premium goes down.

There's a lesson there for a lot of us.

Read: It's always about economics

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