The Pricing Team at Clipboard is the division of our product team responsible for pricing each shift in the marketplace. We adhere to the Company Values and the Product Team standards, but also emphasize certain additional team-specific values. In the Pricing Team, we:
New innovations destroy old innovations. In his theory of Creative Destruction, Joseph Schumpeter argues that when something valuable and innovative (like electricity) comes into existence something old and staple (like the lamp-lighting industry) fades away. Schumpeter was speaking from a macroeconomic perspective, but the principle holds at a smaller scale.
We believe that unless we have uprooted something and replaced it with something much, much better, it’s certain we are not innovating in a meaningful way. Building from there, we actively strive to make bigger step function improvements faster.
Where some might settle for value-creation charts that look like this:
We want our value creation to look more like this:
This isn’t just idle talk: we’re already on our way to the fourth version of pricing as a company, and the third version this year.
We are familiar with the math behind what we are doing. Without checking, any member of our team can accurately explain the math they use in a variety of ways.
We consider the last category of explanation especially important because we’ve found that it’s always possible to simply summarize a concept we truly understand; we don’t really understand how something works until we can explain it to a fifth grader.
Imagine that we want to make a four-data-point graph modeling the behavior of an object dropped from a plane. We might naively fit a line through them. If our model of the world is something as simple as “when we drop things from planes, the distance decreases proportionally with time”, we might end up with a graph showing a consistent slope, like this:
But that graph would be wrong, and if we had taken two minutes to look up basic kinematics, we’d know that at a glance. In the real world, the speed of the falling object would increase over time, and the slope of the line would gradually become steeper. If we were a bit more curious, we’d eventually learn that air resistance eventually makes falling objects reach the “max falling speed” of their own terminal velocity and stop accelerating. At that point, the slope of the line would become constant.