May 29, 2009

Random Thoughts

Many of you know that Wired magazine's Editor-in-Chief, Chris Anderson, is a huge MINDSTORMS fan. He's the guy who put an NXT inside a remote control airplane and used a HiTechnic sensor to boot. He's also the author of "The Long Tail" which I blogged about in an earlier post.

Chris has a new book coming out in July titled "Free: The Future of a Radical Price" that builds on an excellent article he wrote for Wired a while back. While I'm looking forward to the book, I went back and re-read the article. I'd like to open up a wild discussion here and welcome your thoughts... so here it is:

One of the article's (and book's) basic ideas is that businesses might find growth opportunity by giving away certain products and selling others. Imagine if LEGO gave away a single NXT Brick to every science teacher who requested one - they couldn't do much with it without the software, motors, sensors, and other stuff, right? But imagine if they threw in two motors, two rubber wheels/hubs, a caster, two wires, and the software? Crazy to consider, but still, all you can do with it at this point is build a tribot of some sort with no sensors and very little functionality.

Could LEGO recover the costs of all those free NXTs (and parts) through the profits received by selling sensors, add-ons, etc? Would having the basic components of a programmable tribot open the eyes of those teachers unfamiliar with the NXT and encourage them to request the purchase of additional parts, lesson plans, and activities for the classroom? (Keep in mind that it can be argued that Apple had some success years ago by giving away an Apple computer to every school in the USA - the philosophy, I think, is to get them hooked on the Apple computer and they'll purchase an Apple later in life.)

Do I think this is realistic? Of course not... but anything's possible. MINDSTORMS has a well established community and teachers (at least here in the USA) seem to at least be familiar with it through events such as FLL, RoboCup Jr, and LEGO Education sales reps. LEGO is in business to make a profit through sales of their products, but it does make me wonder if giving away some of their key products such as the NXT brick might stimulate sales in other areas. (Imagine if every Technic kit they sold came with optional instructions for integrating an NXT brick into the design - not hard to do, in my opinion.)

2 comments:

Noel said...

There is a problem with this model and I'm not sure how it could be dealt with. If LEGO were to give away free NXTs then undoubtedly the price of the extras would be significantly higher than than they already are. This would then be a deterrant to those of us who bought the full set and want to add a few bits.

This model is already well established with computer printers. Printers now are insanely cheap but the replacement ink cartridges are outrageously expensive to the point that it is almost cheaper to buy a new printer instead of replacing the ink cartridges. While this may be good for business it leaves the customer feeling trapped.

Edmands said...

While I love to see the NXT community grow, I do not agree giving out free NXTs would have the desired effect, especially given its current list price. Free items will attract a lot of takers, but that does not guarantee that a customer relationship will be established.
I like to read Seth Godin's blog on marketing topics and he noted in one of his articles;
1. if it costs money, many people value it more highly.
2. if it costs money, many more of the 'buyers' pay an increased amount of attention.
3. if it costs money, you get a better shot at future interactions, because the stakes are higher
The goal should be to establish a relationship with valued customers who are familiar with and value your product. Therefor I would recommend lowering the NXT price (I do not own 2 NXTs yet) to grow the community or spend more time demonstrating its value to the group which Lego sees as its core base.
--Todd

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