

Xobni Turns On Revenue - Will Outlook Users Pay Up? - brezina
http://www.xobni.com/blog/2009/07/14/announcing-xobni-plus-%E2%80%93-xobni%E2%80%99s-most-powerful-outlook-search-tool-ever/

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nailer
As a Xobni user, who runs it constantly, I must say I don't find the product's
prospects too great.

Most people I know who use Xobni get it because their Outlook is too old to
have full text search. Sure, those graphs of when people email you are nice.
So is the sometimes-working extraction of details from sigs. But they're not
what you install Xobni for. Full text search is the killer feature.

As time goes on, newer versions of Outlook will be deployed. Outlook 2007 has
been around for two years, Outlook 2010 is being released now. Large companies
can use the newer products for no additional charge. Once they get round to
doing so, Xombi's reason for being goes away.

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andymoe
I have been using it Xobni since it was in beta and most of the time I don't
even have to search because of the way it organizes email and attachments.
When I do search it is about 20 times better than outlook 2007's built in
results and much more usable than windows desktop search 4. It plays much
better with outlook than X1 or Google desktop search and frankly Microsoft has
had years to make search not suck and they have again and again failed and
have lost my trust.

So yeah, Xobni gets my 30 bucks plus much more from my clients. At the prices
they are charging I won't think twice to get licenses for entire
organizations. It won't even be a blip on most businesses IT budget and I
think that's a really good place to be price wise.

EDIT: BTW - the auto complete for email addresses is fantastic and works
really well. Have I reached fan boy status yet?

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gizmo
Why make it so absurdly cheap? It's (from what I hear) a great product, that
makes using outlook substantially less painful. So why charge only $30?

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rms
I'd be very surprised if they didn't properly survey their users to calculate
the optimal price point. So the answer is because they'll sell more than twice
as many copies at $30 as they would at $60.

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gizmo
I think that's slightly naive. The schoolbook graphs of price elasticity show
that there's a single maximum, that can be reached simply by walking the
curve. It tends not to work that way.

You also have to consider how people react on prices (if you sell the product
for $30 in the first 6 months, then start selling it for $60, the first users
won't get upset. If you do it the other way around, the loyal beta users who
upgraded will feel ripped off).

People also don't tell the truth in surveys. They believe they will buy it at
a specific price point, but in reality they don't. In survey mode people may
think about what other software products cost, and think what they consider
reasonable. When people have to actually make a purchase people have to pick
between going to the movies or buying a software license. Wildly different
results are to be expected.

I wonder what other people's experiences with surveys are, and how people go
about picking a price. It's certainly a fascinating subject.

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brezina
gizmo, you and the other guys (and girls) on here are all over the exact
studies and discussions we had internally with respect to this product - i
appreciate the discussion. Pricing and positioning this and future aspects of
our business model has been my focus for the past 8 months.

The value of Xobni is built on two pillars: search and relationship
management. This offering builds on that first pillar. Future offerings will
build on the other pillar. We actually priced this offering below what we
think was the optimal ARPU (average revenue per user). We did that for 3
reasons (1) we want a huge % of users on this paid product - upselling to
future offerings will be one-click easy (2) we believe paying users are more
evangelical (humans justify decisions they've already made) (3) as a business
in our stage we believe it is less risky to monetize a larger user group at a
lower ARPU than very few users at a higher ARPU

We are optimizing for the 2-5 year revenue scenario (not 6 month scenario) -
in the not too distant future Xobni will be launching an enterprise offering,
a blackberry application, and other premium offerings. I've been waiting a
long time for this stage of building the business.

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gizmo
Thanks for the rationale. I hope it all works out.

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prakash
Assuming there are around 2 million active users (TC mentions a figure of 2
million downloads just last year) of Xobni, assuming a conversion rate of 1%,
is 20k users that pay, which is over $500,000 in revenue. Nice change!

IMHO, outlook users would pay, considering Xobni makes their lives easier and
the fact that the number of emails are increasing rapidly.

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gizmo
2 million active users? I think the video said 2 million downloads total,
which would put the number of active users probably at 20% of that. Given that
they have accepted 15 million or so in venture funding, it really is just
change to them.

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prakash
It's been 2 years since Xobni was released, 2 million was just last year, so
the total number of downloads are higher. The percentage of active users, IMO,
would be higher than 50% initially, then tapering off to say 20%.

The revenue they get from plus is a good start.

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bbalfour
I'm surprised their licensing model is a one time fee rather than a
subscription. Missing out on a huge opportunity of recurring revenues.

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gizmo
Subscriptions aren't always better. There is absolutely no reason for this to
be a subscription, and I think it would be way too hard a sell.

