Thread by @patio11

Idle thought: one thing I think we'll see more of in coming years is software-mediated revenue management in many more industries than it traditionally happens in.

(This is the practice of dynamically adjusting prices offered to various customers; think hotels/airlines.)

For example, many service providers have an inventory management problem. My father once memorably described it as "Like fishing: sell it or smell it."

You've got N slots. Slots renew, but a particular day's slots are perishable.

Those slots are not equally valuable and they're not statically valuable, but for operational and other reasons they're generally priced identically.

That... does not need to be a law of nature, particularly if you can quote prices dynamically during booking.

"How are slots not equally valuable?"

Consider hair cuts for working professionals. Noon and 5:30 PM are more valuable than 10:30 AM, because they don't require you to miss work to get the haircut. More people want them; they should command a premium.

(You can express exactly the same intuition in a slightly more customer-palatable fashion if you phrase it as "We have difficulty filling our 10:30 AM slot and so would happily reward you with a discount if you came in for it.")

For many service providers, if they fail to fill the 10:30 AM slot, that is simply a hit to revenue and they'll never make it back.

Revenue management dynamically targets pricing (and at more sophisticated end other strategies) to raise utilization and maximize revenue.

This happened in airlines/hotels first because big ticket items, huge capital expenses and fixed costs, relatively low marginal costs, and incredible known but not conveniently observable difference in willingness to pay between customers.

An interesting observation I heard once regarding airlines specifically: "There is no single price at which a legacy air carrier could profitably fly an airplane."