next steps: Veoh TV
around the blogosphere : 2007-09-17

the nerd tax

Dollars Bill Maher had a great line, succinctly summing up this entire iPhone refund fiasco:

"It's not a price cut, it's a repeal on the nerd tax"

As an admitted (at times) nerd, I recognize that we often pay "taxes" for being the first out of the gate.

iPhone buyers weren't upset over the tax, they were upset that Apple didn't play by the tax rules.  If you pay the tax, you expect something in return, notably - the recognition as someone who is first, who is leading, who is light years ahead of everyone else.  Jobs didn't play by the rules - he tried to reinvent them.

The 3 Principles of The Early Adopter/Nerd Tax Dynamic
- from the eyes of a nerd -

  1. The nerd will do ridiculous things (ie paying the nerd tax) to get his or her hands on something new and possibly shiny
    • ridiculous things may include:
      1. waiting in line for hours or even days
      2. paying a pre-order fee
      3. overpaying (a direct form of nerd tax)
      4. dealing with an unfinished product - the "first gen" glitches
        • note: the nerd 2.0 does not consider leaving their mother's basement a ridiculous thing because the new nerd is the alpha in the pack, often presenting as an industry leader and successful business person.  The new nerd does not live in his mother's basement, the new nerd isn't an outcast.  The new nerd is a leader.
  2. This thing will make you feel superior, cooler and/or better because
    • you have this
    • everybody else doesn't
    • this thing is awesome (in the eyes of the nerd)
    • you are now an elite member of a select club
  3. Brands will recognize this nerd tax by giving nerds sufficient time to enjoy part 2, such that it offsets the inconveniences and inequities of part 1.

The Jobs Amendment

  • As the king of all nerds, I will not deliver on part 3.  Rather, I will refund some of your money, thereby allowing you to save face (kinda).

Why This Wasn't So Smart
Money is only a small (if at times significant) part of the overall picture.  Early adopters often adopt early because it is a personality statement: I am a leader. By marking down the price so drastically, so quickly he made the leaders look like fools.  The only way he could have restored their status would be by offering them something additional of meaning well in advance of anyone else, something that would restore their stature as leaders - and he didn't.

Sure returning the money was a smart move, but I would have expected more out of one of the greatest marketing gurus of our generation.  There should have been something else up his sleeve, something truly special that rewarded his early adopters for adopting early.