Camels and Rubber Duckies: Joel Spolsky's excellent article on (software) pricing. Intro: >You've just released your latest photo-organizing software. Through some mechanism which will be left as an exercise to the reader, you've managed to actually let people know about it. Maybe you have a popular blog or something. Maybe Walt Mossberg wrote a rave review in the Wall Street Journal. One of the biggest questions you're going to be asking now is, "How much should I charge for my software?" When you ask the experts they don't seem to know. Pricing is a deep, dark mystery, they tell you. The biggest mistake software companies make is charging too little, so they don't get enough income, and they have to go out of business. An even bigger mistake, yes, even bigger than the biggest mistake, is charging too much, so they don't get enough customers, and they have to go out of business. Going out of business is not good because everybody loses their job, and you have to go work at Wal*Mart as a greeter, earning minimum wage and being forced to wear a polyester uniform all day long. So if you like cotton uniforms you better get this right. The answer is really complicated. I'm going to start with a little economic theory, then I'm going to tear the theory to bits, and when I'm finished, you'll know a lot more about pricing and you still won't know how much to charge for your software, but that's just the nature of pricing. If you can't be bothered to read this, just charge $0.05 for your software, unless it does bug tracking, in which case charge $30,000,000 for it. [...]<
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posted by johannes,
Tuesday, January 04, 2005
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