
Stop Using the Cup of Coffee vs. $0.99 App Analogy - Deinos
http://www.joshlehman.com/thoughts/stop-using-the-cup-of-coffee-vs-0-99-cent-app-analogy/
======
makecheck
If I see something that is both "free" and "in-app purchases", it already
_greatly_ reduces the chance I'll even bother to download because _so damned
many_ of these are just _terrible_ experiences. On the off chance I bother to
look one step further and preview the "top in-app purchases", I usually see
something totally unsurprising like the absurd "$9.99 gem bags" or whatever.

Please, please just start charging for apps again. I _specifically_ search for
"pay once and never again" apps now.

~~~
ineptech
> If I see something that is both "free" and "in-app purchases", it already
> greatly reduces the chance I'll even bother to download

If a free app starts out with limited functionality for trialing, with a (one-
time) in-app-purchase to unlock the full features, is that a good thing or a
bad thing?

Follow-up: if it's a good thing, how should the app developer make it clear
that it's not crapware? (asking for a friend)

~~~
patmcc
That's my personal favourite for apps, but it's impossible to tell from a
glance whether the "in-app purchases" label means you just buy it once (like
Super Mario Run) or it'll be a constant push to spend more and more (nearly
every other app).

That's a tough one, especially for small developers.

~~~
ikeboy
Look whether "top in app purchase" is "unlock full game" or "buy gameXYZ
coins" etc

~~~
squeaky-clean
Is this iOS only, or maybe I'm very bad at searching? I don't see anywhere in
the Play Store to view the top in-app purchases for an app.

------
ben1040
I prefer to apply this analogy to the situation with how users expect updates
into perpetuity in exchange for their 99 cents. Developers that try to fund
continuous updates through a small annual subscription fee (like Dark Sky on
Android, for example) get pilloried for it.

You wouldn't pay $4 for a coffee at Starbucks, then come back to the store six
months later and say "I paid $4 for this, refill it." But you expect that app
you paid a buck for in 2008 to still work in 2017 across 10+ new OS revisions
(and one or two major UI paradigm shifts), and the justification for that is
"I paid for it once."

When you went out and bought boxed software it was kind of an expectation that
it was going to work for a reasonable time period afterward. But if you want
an update or support for a later OS version that didn't exist at the time of
purchase, you're going to pay for it.

~~~
moxious
We're really torturing the metaphor with app updates as coffee refills,
buuuuuut....

Many of us are in the software business. So we know how hard the stuff can be.
But the customer doesn't, and shouldn't care. I think it's reasonable for the
customer to expect updates forever. Particularly because so often, we put out
a product that has bugs and problems in it. The customer is sometimes already
being fairly accepting being willing to pay for a product that has problems
that are yet to be fixed.

The app author also has the ability to release a new app if the features
warrant. So no one is forcing the publisher to give new features for free.

~~~
ben1040
>The app author also has the ability to release a new app if the features
warrant.

That's easier said than done. You can't really do this without losing your
customer base, links to your app in the store, sign-in tokens, etc, and you
have to have some mechanism for migrating data out of one app sandbox to the
other.

Additionally, if you want to be fair and offer an upgrade price, the app
stores don't allow this directly.

Tweetbot did something clever; they wanted to charge $10 for new users but $5
for upgrades. They put the "old" version and the "new" version in a package
deal bundle on the iOS App Store, and priced the bundle at $10. If you had the
"old" version already, you got get a discounted upgrade by buying the bundle
-- since you already owned one app in the bundle, you got a credit for that
towards the full price.

The app stores could fix this problem and allow publishers to set upgrade
pricing, but they don't.

------
whack
The article makes some pretty compelling points, but I think it's
underestimating the irrationality in human behavior. It's well known that
people's purchasing habits are deeply irrational on many levels - one of which
is the idea of anchoring. We've had the idea of $4 coffee prices anchored in
our heads, and so, don't think twice about it. Conversely, we've also had the
idea of free-apps anchored in our heads, and so, feel deeply averse to
spending $1 on it, even when a rational person would conclude that the app's
lifetime value (over free alternatives) exceeds 25% of the value provided by a
single cup of coffee.

There are certainly many rational reasons for why someone wouldn't want to pay
a buck for an app, but it's worth pointing out that a significant number of
people are irrationally averse as well.

[http://www.investopedia.com/university/behavioral_finance/be...](http://www.investopedia.com/university/behavioral_finance/behavioral4.asp)

~~~
daxfohl
Yeah, I can't tell you how many irrational hours I've gone out of my way to
avoid toll roads or paid parking, things that "should be" free, even now when
I certainly _charge_ many times the rate that any parking garage does.

------
qrbLPHiKpiux
The app world has really been grinding my gears lately. The move to
subscription services is really getting to me. Especially on iOS. I've dropped
a lot of money on writing apps - I'm looking at you, Ulysses - to move to a
subscription - and eventually lock me in, or lock me out. "At a cost of a
coffee a month," you say.

------
rsp1984
I think the article misses the point.

If we transfer the app store experience over to the real world who would pay
$4 for a cup of coffee at your shop if there were coffee stands on the
sidewalk literally every 100 meters offering excellent free coffee for you to
grab with some ads printed on the cup.

That's about the sort of competition that mobile app developers have to put up
with. Starbucks however didn't have that competition when they started out,
that's why they could become so big in the first place.

~~~
philtar
Free coffee with ads on cups? Could it work as a model?

------
ambivalents
I was expecting this to go in a different direction when I read the headline,
which is this: a decision to buy and experience an app does not have a
guaranteed ending. The app could easily command more of my attention than I
want it to, which--not to get all self-important here--is valued at way more
than $0.99. I personally don't buy apps because I feel attention-saturated by
the ones I already have. I do buy cups of coffee regularly, though, because I
know where they start and end.

~~~
ghostbrainalpha
I was expecting it to go in a different direction also. But mostly based on
the price of coffee. I don't know anyone in my professional/social circle that
drinks coffee that costs less than a dollar. I think its time to start
equivocating $5.00 purchases with a cup of coffee.

~~~
freehunter
And even then, saying "this is the cost of a cup of coffee" is basically
asking me to give up a cup of coffee to pay for their app. If you break out
the whole logic argument, it's saying "I don't want to pay for this app", at
which point the value proposition is "you know that money you were about to
spend on coffee? Spend it here instead". I know they want to say "look how
cheap it is", but what I hear as a budget-oriented person is "if you don't
want to spend the money for it, just stop buying something else". My aversion
to buying an app isn't how expensive it is, but rather how much I'm going to
use it. Stop insinuating that I'm too poor to buy your product.

And like you mentioned, coffee is actually pretty expensive. Even at $1, if
you drink a cup a day that's $30/mo which is more than the cost of GitHub
Enterprise. If it's $5 for a cup and you drink one per day, that's $150/mo
which could get me an absolutely massive Digital Ocean droplet. We pay an
assload for coffee. Bad comparison.

And not to mention coffee is addictive; many people drink it because they feel
like they have to, not because they necessarily want to.

Comparing your app to coffee is just an awful comparison all around.

------
danso
I think this essay touches on something that is obvious yet feels frequently
overlooked: time is valuable/money. And apps, unlike coffee, suck up your
time.

It's not that 99 cents is expensive. It's that if 1 hour of my time is worth
$50, and a 99 cent app wastes 1 hour of time, I'm out $50.99. The low price
tag is itself a disincentive because experience has taught me that it's very
rare to find something indisputably worth $9.99 that has been valued (by its
own creator!) for 99 cents.

And as a technical issue, if you were to pick up apps because they were free
or cheap, you'd subject yourself to cognitive overload, even if you never even
opened those apps and wasted time on them. Nothing is ever free, and even if
Starbucks/Peet's is a bit overpriced, at least I know what I'm committed to
(barring an unexpected discovery that coffee is much more harmful than
previously thought).

------
brownbat
I have fond memories of freeware and postcardware from a few decades back. In
contrast, I'm rarely impressed with either free or paid apps.

The most solid apps I use just promote or expand another primary product.
They're made as an adjunct by a company with a different revenue stream.

I don't know if it's walled gardens or the ease of payment that drives the
shift. I'm glad people can get paid for good work, but I worry we lost
something.

On the other hand, maybe it's just nostalgia taking. I wish I could find all
the old astronomy simulators and games I found on BBSs, see if any of them
actually hold up. Maybe software overall has gotten so much better I just
raised my standards.

------
praptak
My coffee spending is naturally capped at a level that is imperceptible to my
budget. That's why I feel comfortable blowing the $4 on a cup - without any
conscious decision making.

That's not the case with apps. I could easily spend a thousand bucks on them
in a single day, so I am very careful with every single $.99.

~~~
ulucs
I feel the opposite is true for me. For meals and soft drinks, my appetite
seems to be infinite so I could really bankrupt myself if I just let it run
free. However, there aren't many apps that seem useful to me and just let me
_buy them_. It's subscriptions all the way down.

I've bought Wolfram Alpha for about a buck, I've blown 30 bucks on a bachata
moves app, but god forbid if anyone offered a run tracking app without a
subscription.

------
redditmigrant
This is a survivorship bias article.

\- "People are building fantastic free apps. They are finding new and creative
ways to make money off these apps" People drop $4 on coffee at new coffee
places/restaurants all the time, so that whole I trust this experience thing
is really not valid when you think about it a little further than your morning
Starbucks.

\- "Fact: Starbucks Has No Free Alternative" \- This can be interpreted to say
that maybe more apps should be $0.99, so that users get used to paying for the
apps. I dont think anyone would question the $0.99 price for apps if thats how
it was from the beginning. \- "People are building fantastic free apps. They
are finding new and creative ways to make money off these apps". This is
because the prevalence of free apps has trained developers that people wont
pay for apps. So new/creative ways of making money is most likely a result of
there not being a way to make money by selling the app itself. Another way to
look at it is, because you cant make money just selling the app, the only
people who survive are people who can find other ways of making money. If the
expectations was for apps to be paid, maybe more people would make apps and we
would see a whole different world of apps.

I realize that its hard to change consumer habits, so free is likely to be the
dominant distribution model. But its important to distinguish that the current
reality might not be the best alternative.

~~~
Endy
They're not really correct that Starbucks has no free alternative. However,
this depends on several understandings. The first for me is a sort of A=A
mindset, that coffee=coffee regardless of all else. Assuming for the moment
ground coffee rather than whole-bean or instant, I can get over a month's
supply for about 5 bucks. It's not "free", but it's $60 a year for a pot of
coffee per day. On top of that, if I don't want to make my own coffee, a $1
coffee mug allows me to get refills at 7-11. And I can get coffee at the food
bank reliably.

While you might argue that I'm discounting the cost of the water and
electricity, I'd argue that instead we're talking about the same issue as the
cost of the phone. I have a $20 phone which works well for me. But any
purchase in the Play Store is getting judged against that $20 value; if the
phone were worth more there'd be no hope of an app significantly increasing
the value of the phone.

There's no app I really need that's not free (or OEM like phone, text, memo,
camera, ebook reader). The few that I do want or which I might need? I can get
that function working in a browser.

------
georgeecollins
This is why free to play, apps that offer premium modes, or apps that have
social conversions are good models for a digital store. When there is almost
no barrier to entry users have good reason to doubt the value of what they are
downloading. Hence they want to try it first or hear strongly from a trusted
source that it is valuable.

------
notyourday
Well, considering "Save The <$INSERT-CAUSE-OF-THE-DAY>" charities have been
peddling "For the cost of a cup of coffee a day" scams for years rather
successfully I would be shocked if it did not work. Of course it may require
TV ads.

------
tarr11
The cost of goods on a cup of Starbucks coffee is substantial (servers, beans,
equipment, rent, utilities, cup, creamer)

The cost of goods on your $1 app is close to, and perceived to be, zero.

~~~
sinatra
Why is customer acquisition cost (which can be many $s) not considered part of
the cost of the app if it's considered part of the cost of Starbucks (through
rent)? Why is Starbucks server a cost, but your app's developer isn't? Why is
Starbucks equipment a cost, but app's infrastructure isn't?

~~~
tarr11
You are comparing R&D with Cost of Goods - they are different things.

Cost of goods refers to the production cost of an individual item. COG for app
store is zero. You don't even pay for hosting your app on the app store.

Software developers are R&D, not cost of goods.

There is R&D associated with Starbucks coffee as well (researching beans,
refining the blends, etc), but nobody really factors that into its perceived
value.

~~~
sinatra
\- I don't see why customers would be so specific that they only want to look
at cost of goods and not other costs. Most products and services people buy
are based on their value for them, not based on their cost of goods.

\- If you include equipment, rent, and utilities in your cost calculations,
then you have to include software developers and servers that are powering the
app. I am not talking about apps that you build, publish and forget. Most apps
have backend and engineers maintaining and supporting them.

\- You ignored my point about the customer acquisition cost which is likely to
be the biggest cost for most apps.

------
petraeus
The best model would be to have an app that slowly unlocks more functionality
based off off TOTAL revenue, so the whales effectively unlock content for the
non-spenders.

------
gnicholas
> _Is There Hope for the Paid App?

Sure there is. Just do what Starbucks does:

• Build an app experience that’s unique and doesn’t feel “easily replicated”

• Provide something the user sees as valuable to their daily life

• Package it such that it shows off its craftsmanship Find creative ways to
profit off of a “free” version (Starbucks doesn’t do this…. yet)

• Quit complaining about money wasted on cups of coffee_

Don't forget the part about spending millions on advertising, so that people
know what your product is.

------
dionidium
People who make this comparison wildly underestimate how much I like coffee.
It's a lot more than your dumb app, I assure you. In fact, I'll go further.
There isn't an app in _existence_ that I'd trade for coffee. Not Facebook or
Instagram or anything else on my home screen. Coffee is better than _all of
them_. This comparison could only be made by somebody who doesn't drink
coffee.

~~~
Semiapies
Sure, but it's not coffee, it's _one cup_ of coffee - and you can immediately
get another cup for yourself.

That said, they still often lose out in that comparison.

------
jasode
I agree with the author. Although the author didn't mention apps being
"digital" as a reason for no sales, others have done so and I commented on
that not being a convincing roadblock:
[https://news.ycombinator.com/item?id=13634892](https://news.ycombinator.com/item?id=13634892)

------
Grustaf
I don't think it's supposed to be an analogy, the point is just to illustrate
that 1 dollar is a very small amount of money and you shouldn't hesitate to
spend it on an app.

------
jonathanjaeger
Let's also not forget that an app is a digital experience and coffee is a
physical one.

Plus even if the facts the author wrote were not true, it's just overused at
this point anyway.

------
wutbrodo
> Last week I bought a game for 99 cents and it was terrible. I played it
> once, for 15 seconds. I could be shoving $1 straight down the toilet again
> for all I know. Your app, good sir, is a total gamble. Sure, it’s only a $1
> gamble… but it’s a gamble and that fact matters more than any price you
> might place on it.

Haven't the ability to return apps been around for like, 6-7 years?

EDIT: I see downthread that this has apparently changed

------
Waterluvian
We need to introduce a system called "macropayments" where you pay once for a
complete product and they leave you alone afterward.

------
MediumD
I think there is another piece to this. Buying a cup of coffee means I get a
cup of coffee. Buying your $0.99 app means I have the right to trade my time
for whatever your app provides. The reason I don't buy apps is because I don't
have the time to spend on your app, not because I think the $1 is strictly
more valuable elsewhere.

------
whipoodle
I don't mind buying something for a dollar and with the knowledge that it
might not be that good. Gambling with a dollar is not exactly going to ruin
me.

------
em3rgent0rdr
These arguments work against paying for music too!

------
linkmotif
Okay but now how will I confirm my bias?!

------
cybernytrix
> Starbucks coffee is a trustable experience

I stopped reading after that...

------
Boothroid
I prefer Costa or Nero.

------
Markoff
bad luck for such developers, i don't drink coffee, neither drink beer

actually i can't think of thing i would buy daily which would be waste of
money and not essential

if the app is useful like launcher or calendar reminders i am willing to pay,
but i have trouble to imagine more paid apps i would be willing to pay with
great free alternatives

------
pacaro
I wish the emphasis in TFA was not on "craftmanship",

1) it's a tired metaphor with weird resonances to a male dominated guild
structure.

2) even the positive aspects don't really apply to Starbucks which is more
fits the "well oiled machine" analogy. If i think of craft coffee, I think of
a small (possibly independent) coffee shop where the baristas really know what
they are doing

3) I think that customers do care about Quality, but they dont' (en masse)
care about craft, your journey is not of typically of interest to them, just
your results.

The article relies too much on a notion of _craft_ which describes how a
product is made, I believe that the consumer cares about the _quality_ which
is the result of that journey, only a fraction of customers care about the
process.

