
Ask HN: Why does software demand stay consistent when there is unlimited supply? - QueensGambit
I understand essential goods like food are constrained by both demand and supply. But, why does software demand stay so consistent? For example, my addon [1] gets 40 - 50 installs per day like clockwork. When I was a newbie, I used to worry that everyone will install&#x2F;uninstall my software on the same day during launch and I will run out of users sometime soon. I learnt it doesn&#x27;t happen that way. But, I haven&#x27;t figure out why. Why is that 40 - 50 people discover my software everyday consistently, when there is no supply constraint?<p>[1] https:&#x2F;&#x2F;gsuite.google.com&#x2F;marketplace&#x2F;app&#x2F;formfacade&#x2F;743872305260
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CameronBarre
You're getting some things mixed up.

We must be careful when comparing tangible goods (like food) to intangible
goods (like a browser app).

Food has an element of genuine scarcity. This scarcity is what causes food to
have economic character. If there is more demand than supply, this state of
things triggers investment into the production of more food to satisfy the
demand some time in the future, ultimately affecting prices. Prices will rise
in the short-run, but decrease in the long-run (if the demand can be met, and
then some). If food was not scarce, it would not be an economic good, and it
would not be subject to supply and demand.

Software, on the other hand, is intangible. It can be duplicated and
distributed, essentially for free, and more or less forever. Even if you have
a paid plan this does not create scarcity. We shouldn't think of software the
same as we think of food in terms of economics.

What is the theoretical limit to how many paying customers would be so many,
that it impacts the ability of new customers to install, pay for, and use your
app? Practically, this question is insignificant, that's one of the reasons
software is interesting.

The simplest answer to why 40 - 50 people discover your software per day, is
that whatever marketing channels you have utilized (or not) up to this point
in your apps's lifetime expose you to 40 - 50 users per day who have a direct
need that they think your product may solve.

The second element to this is that there are a lot of people in the world. As
others have pointed out, they don't all have the same information. You are
capturing a fraction of the total number of people out there looking for a
solution to this specific problem, who are influenced by, or aware of, at
least one of the marketing channels that influence your app.

If the problem your app solves became a non-issue overnight (for everyone),
then you would see that number start to decline over time or go away
instantly.

What's more likely to change the situation (temporarily or permanently) is
that something changes (positive or negative) with those marketing channels,
either influenced by you, or by whatever entities or forces control those
channels.

Hope this helps.

------
adventured
Because supply constraint (or lack thereof, 'unlimited' in this case), is not
the only constraint factor acting against your situation. A constraint of
awareness is also acting on your situation with the addon. Demand is
potentially (very likely) hindered by awareness constraint. In this case, with
an addon, if you're seeing a quite consistent uptake daily, with unlimited
supply, it probably means your awareness factor is consistently acting on your
situation as well.

An older and quite predictable example of this in action, would have been
during the glory days of SEO, where based on consistent search engine
rankings, you could expect highly predictable traffic to flow in day after day
(still somewhat true today, it's just no longer as easy to game to the result
you want). That's Google acting as arbiter of the awareness constraint.

It's an incomplete picture, when you've heard people talk about supply &
demand as if they're the only constraints occurring. The context is usually
far wider and more complex than just those two constraints, there are usually
many constraints.

As a simple example, if you have an unlimited supply of eggs and you're giving
them away for free, it doesn't do you much good if you have no awareness such
that people don't know about the free eggs. The awareness factor is the
constraint rather than the supply and it is keeping demand at zero. Supply
without awareness equals zero demand.

------
CyberFonic
It really depends on your marketing. If you simply display your app on G-Suite
Marketplace, then people will discover your app by searching for specific
terms. In the absence of some specific event to cause an increase in searches
for the relevant terms you simply see a steady state. If you were to do a well
targeted marketing blitz then you might see a short-term spike in downloads.

~~~
QueensGambit
Yes. I get that. But, why is that the same number of people search for a
specific term everyday? Is the aggregate demand so predictable? Don't you find
that weird?

~~~
CyberFonic
I don't find it weird. It's basically the smoothing effect of very large
numbers which is what statistical analyses depend upon. If you wrote two new
very different apps, then you may find different "steady state numbers". The
more niche the app the smaller the numbers and the more "hair on fire" the
target need the larger the numbers. It's actually a rather well known dynamic
in marketing. That's why they use certain words to capture attention.

------
econcon
It's mostly because market doesn't always have perfect info available.

There are always people who hear about goood things from someone who is
fixated on particular software or has grown intimate and comfortable with one,
then others might follow him and get on the same bandwagon even if that
software is of last generation. It happens.

