We live in a chaotic, interconnected world. Each business has partners, direct competitors, frenemies, and everything in between. When we re-launched Next Big Sound in the summer of 2009 there was one company called Band Metrics that was around. Another one soon launched called Rock Dex. Billboard soon launched a competitor called Billboard Pro. And in the UK there was Buzz Deck and Musicmetric. After 5 years only NBS and Musicmetric remained.
I believe that we were the first company in our peer set to price our product. There was nothing comparable on the market so we decide to introduce a $79 per artist per month price point and experiment from there. Thinking there was some internal logic to the number, one of our competitors also set their price point at the exact same amount when they released their paid-for version.
Two stories, one from chess and one from the cold war, remind me of this principle.
Gary Kasparov was playing chess against the IBM super computer Deep Blue. This computer was capable of calculating millions of chess moves and long sequences of moves and probabilities. During one of the games, the computer made a mistake. Kasparov could not figure out why the computer would make this random move (neither could the IBM technicians). Kasparov “knew” that a computer wouldn’t just make a random move and there must be some underlying logic that he, the greatest chess grandmaster of the era, was missing. It literally started to drive him to insanity.
Similarly, in the TV show The Americans on FX, the FBI captures a low-ranking KGB officer entirely by accident during a botched operation. The KGB thought there must be some inherent reason for the move and tore their staff up and down trying to figure out what this person knew and why the Americans would want to capture him.
Sometimes, when you don’t know what to do, just do something. With pricing. In a chess game. Or in espionage. The best move might be to make a random move with confidence, and let your competition destroy themselves psychologically.