I lived in constant fear of forgetting a WHERE clause.
Much like people complaining about the price of a gorgeous $2.99 iOS app while ordering a $6 coffee.
That $3 iOS app or $6 web service may or may not be entirely useless to you; it's quite difficult to know.
I mean, it's easy to make sarcastic quips about the mentality. But there are good, clear reasons why it exists. And if you understand them, maybe you can do something about it - make it very clear exactly what your app does, include informative screenshots, offer a demo version, make payment easy, etc.
The same is actually true with app purchase, unfortunately much of it negative (people charging real money for buggy crapware and fart apps, apps being poorly designed or full of distracting advertising, the list goes on.)
What chance do you have to bring to bear that same firehose of positive experience as the coffee shop to request $6 from your customer?
Step #2: Deliver a technology product into that market.
Step #3: Charge money for the product.
You can skip Step #1 (like 37signals did), but why cause yourself undue stress? All the customer money is outside the echo chamber.
Web/app pricing usually doesn't take into consideration the 3rd world (plus, the lack of availability of international credit cards or other easy purchase options, coupled with the attractiveness of piracy and low wages, makes selling stuff here a tricky proposition).
My father bought a Samsung Galaxy last week, and it's carrier subsidized so he pays 20 dollars/month for a year.
My own Nokia N86 was also carrier subsidized at U$ 30/month for a year (and that included 300 minutes' worth of calls).
Even the iPhone is carrier subsidized at about U$ 50/month for 2 years.
In those cases, paying an extra U$ 15 would make a difference, but U$ 0.99.. you're absolutely right.
This was an epic day in the life of Pinboard, and possibly took them from making ramen money into maybe pizza and beer money. For Yahoo, signing up a few thousand users at 6 bucks a pop is possibly not worth speaking of, much less devoting a team of developers, designers, marketers, system administrators, etc., to.
I'm not saying Yahoo hasn't been making mistakes left and right for the past...I dunno, decade or so. Nor am I suggesting that delicious had to come to this ignominious end; had it been kept on target throughout the years since acquisition, this story probably wouldn't have happened this way.
I'm just saying that this might not be an agonizing defeat for Yahoo. That's the cool thing about being a tiny company. You can do things that just aren't sensible from a business perspective when doing it on a larger scale (right now). A small company can completely ignore huge swaths of the market, for instance, and make one niche really happy and do nothing for the average user. Or, a small company can come in with a just the basics product that's simply easier to use than the big, complicated, product that's been in development for a decade or two. These are freedoms big companies simply don't have (as is the freedom to make thousands rather than millions on your primary product).
All that said though, this is a nice windfall for Pinboard, and I'm super happy for them. The positive karma there outweighs the negative karma to Yahoo, which isn't really significant because it's just one piece of their larger ongoing failures, and I can't really think of a better use of a small failure than to make a company like Pinboard's year.
Excellent article, giving balance to current "best practice" thinking.
We charged money for a good or service
I know this one is controversial, but there are enormous benefits and you can immediately reinvest a whole bunch of it in your project sips daiquiri. Your customers will appreciate that you have a long-term plan that doesn't involve repackaging them as a product.
If Pinboard were not a paid service, we could not have stayed up on December 16, and I would have been forced to either seek outside funding or close signups. Instead, I was immediately able to hire contractors, add hardware, and put money in the bank against further development.
This is excellent writing!
And thanks for mentioning apachetop -- I somehow wasn't aware of it, and as one of my hosting customers is expecting 6 digits of page views over the course of a couple of hours tonight, it now has a terminal window all to itself.
Jeez - who keeps hiring this guy? I think we had him or his brother at the next to last company I worked at.
One of the best posts I've read on HN in a long time, and I'm not even a sys admin. It was compelling, informative and funny - nice job!
Also, apachetop. How did I not know about this?
fee = (number of users * $0.001)
This urge to reverse-engineer our total number of users when I actually share that information in the post baffles me.
Well, there's your bug :D
> Right now it's 18k users, with 11k active. The signup fee has brought in just over $120k, most of that coming in December (thanks, Yahoo!).
- Pricing didn't start at 0.01
- We don't have 9250 users (hint: see the linked article!)
- The price doesn't go up by $0.001 per user
Other than that, you're dead on.
Let Price = U / (1000 x (LOG(U) - 2.44))
Disclaimer: $fuzzy_math_fudge_factor = TRUE
If you can keep the users for 1 year, you'll have made more than the $12 cap you would have and, if you don't, at least you don't have the support headache of having to deal with a customer who bought in at the minimum for life -- non-paying users at this price tier go away. Plus, anybody willing to break out their wallets at all are likely to have little qualm over $1 a month.
Also, with a fairly regular income stream, it'll allow you to plan your expenditures more reliably, so budgeting for things like employees, server space, etc will be easier to plot out cost vs income.
The practical result is that the upgrade becomes progressively cheaper (since the signup fee is deductible from the first year's subscription)
I bookmark so I can look at something later, and the unpredictable perishability of the web defeats that purpose. Archiving snatches victory from the jaws of defeat. :-)
I would like to see tag hierarchies à la del.icio.us, if you were bored and wanted to implement them.
Maciej I'm curious is this endeavour profitable for you? I understand the point of an itch that needs to be scratched and all. But still I'm curious - I find the service excellent (I'm a devout customer) but for all the resource intensiveness that your service requires to offer caching and search and the time sunk into implementation and maintaining, well I find the fee kinda low (on a over thumb estimate that is).
Are there any other ways you are monetizing this? Since all those bookmarks are true "human powered search engine"?
I know this one is controversial
How unfortunate that this should be the case.