
How To Price Software Without Just Rolling The Dice - dshah
http://onstartups.com/tabid/3339/bid/11097/How-To-Price-Software-Without-Just-Rolling-The-Dice.aspx
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tptacek
You probably get 80% of the value of all these posts with just two bits of
pricing advice:

* Don't charge cost-based prices; what you pay to build something has nothing whatsoever _at all_ to do with your price. All arguments of the form "that's just a (wiki|blog|bug tracker|reddit clone) with a * attached" are themselves a subtle form of cost-based pricing.

* Charge more.

I liked the book though.

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access_denied
Additionally, if you do b2b:

* Charge more.

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tptacek
Also, at rev 2.0:

* Charge more.

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pchristensen
In a recent Stack Overflow podcast (73?) Joel said that he would helped the
world a lot better if he made a robot that you could ask about software
pricing, and it spat out the answer "Raise your price by $200"

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pkaler
It was the This Week In Startups podcast with Matt Mullenweg as a guest.

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pchristensen
That's it - too many podcasts to keep straight. Thanks!

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mixmax
I think there's a better way if you're doing webapps. Since you can change the
price for each customer in the backend code you can actually start doing
statistics and find out at which pricepoint you maximise your profit.

More info here: [http://www.maximise.dk/blog/2009/01/getting-product-
pricing-...](http://www.maximise.dk/blog/2009/01/getting-product-pricing-
right.html)

(Full disclosure: it's my own rarely updated blog)

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sheena
It might be a better way in theory, but do you know of anyone who's actually
employed the technique without severely alienating customers? You mention
Amazon as a general A/B tester, but Amazon's price testing is the most
prominent example I can think of and it ended with a public apology. Price
discrimination (even if it's only a testing phase) only seems to fly if it's
not obvious, and it'd be obvious for most webapps.

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pierrefar
As I understand it, airlines can get down to a per-seat pricing structure.
Look how much we love them for it.

There is a reason why Farecast did so well...

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sheena
True. I didn't mean that some markets don't support price discrimination, just
that customers' perception of it -- if they know it's going on -- is terrible.
With airline tickets, people see prices fluctuating over time: lots of bumps
but also some apparent connection between the time/effort involved with buying
early and a generally better price. Customers seem to be more infuriated if
they can easily tell that someone else is getting a better price on the same
exact seat at the same exact time. Given the fluctuations and the
_expectation_ of fluctuations in airline pricing, there's not much direct
comparison going on among airline ticket consumers.

