Carlos Matallín

Elasticity, putting web development and business together

I’m in a train going through fields and fields in the middle of nowhere (some people call it La Mancha) returning to Valencia from a quick trip to Madrid and I’d like to take this opportunity in order to update the blog, because even it’s a bit shaming the number of drafts has exceeded the number of published posts and I have to do something about that now.

Furthermore in the last days some people have warned me that I should not give up posting and write more frequently. It’s a bit difficult because right now I’m so immersed in my Industrial Engineering exams and all the work I do as a freelance web designer that I simply can’t spend my time writing. Anyway, once I read “there’s always time for the things you really like”, so I think I don’t really have an excuse.

Talking about university, one of the subjects I had this year was Industrial Economy; I have become more and more interested in this field for some time now. This interest mostly comes in terms of my field – if I really have a field where I grow and develop – from the preoccupation of not only provide users with tools so they can kick ass, but also make it in the most efficient way; i.e. do great shit.

Anyway, it usually doesn’t work like that. And this conflict is what Economy is all about.

If we come back some posts ago I wrote that there’s always somebody who will explain whatever you are dealing with much better and in a more intelligible way than you. Then I was talking about Punset and now I confirm this with a book I have recently read, Freakonomics. It doesn’t have a real line of thinking but recount how the World is controlled by the everyday details and the fact that we usually don’t notice this relationship due to their relative minor importance; all this studied from the point of view of an economist.

In due time reading Freakonomics I could find a plausible answer to my Openness concern, which is based in the fact that when there’s a lack of openness, or as they properly name it Information Asymmetry, somebody expects to make a profit somehow or other. This phenomenon happens in Economy as in the Real World™; in fact if how we would like the Real World™ was belongs to moral, Economy explains how really is.

Returning to my Economy classes something we studied was price elasticity of demand, which is the reaction (more or less marked) of the consumers to an increase or decrease of some product price. This involves a pile of factors that are involved in the behaviour of every consumer such as its income or the prices of the rest of the products, which finally determine the elasticity or inelasticity.

So, why not extrapolate the elasticity to web development? Not that elasticity. What I am saying is that we could explain the users reaction to a redesign, to the inclusion or removal of functionalities, etc, through the elasticity associated to every website or web service. They definitely don’t feature the same characteristics and not every user will respond in the same way, because of their inherent factors that we can devise somehow through agile methodologies and iterations; release early, release often. Moreover if all this work is supported by measurement and proper analysis of metrics we can be ahead and anticipate what users demand and the coolest thing: put all the efforts in those modifications that in the end will reinvest in the own web service by a positive reaction from users.

And this is my favorite part, where somebody has already rambled on this topic, and explains it much better than I. Now I have to find it and learn as much as I could.

Reference:
http://en.wikipedia.org/wiki/Information_asymmetry
http://en.wikipedia.org/wiki/Elasticity_(economics)
http://en.wikipedia.org/wiki/Price_elasticity_of_demand