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>Startups figure out how to make money out of free apps.

I don't know if most of them do. If I look around in the android market there are some great apps, that very likely do not make any money although they offer actual value to the customer.

I don't get it, why should apps be released for free?

Especially on Android I am surprised as to how many free(mium) apps are available, which could and should be paid apps, since they offer value to the user. Many apps however useful may not generate enough revenue by offering an ad-supported version of their app.

It's sad to see that the developer community is shooting itself in the foot by releasing so many apps for free/ad-supported. I am pretty sure that most ad-supported apps will not create a great revenue stream for the developer. Buyers simply get accustomed to this trend. See the divergence of revenue models between Android and iOS. I don't know if it's the market that speaks here, or maybe just a trend in developers not trusting in the value of their own product. All in all it seems that this trend of releasing apps for free does nobody any good, since it will stall innovation at some point.

On a side note, I would really like to see a comparison of how some similar apps perform which are either paid, freemium or donate. Maybe there is some threshold for when it makes sense to publish an app either freemium or paid.

> All in all it seems that this trend of releasing apps for free does nobody any good, since it will stall innovation at some point.

It does nobody any good? How about the users? I don't buy the "it will stall innovation" argument. Having Linux be free didn't stall innovation, quite the opposite. I'd even say without it being free, we wouldn't be where we are now in regards to innovation. Large companies would still be in control. I know many companies depending on Linux, Firefox, MySQL, PostgreSQL, SQLite, Perl, PHP, Ruby, Python, Java, Flash, Apache, BIND, OpenOffice, irssi, Postfix; and the many innovations these free products provided and facilitated. If I think about the projects that weren't out to make money, but to do something good, the value of free software becomes even greater.

But at the base of it all: For some of us technology is still more about solutions and making life better, rather than just money. I have a job, I'm happy, why should I take money for software I would've written anyway?

...because taking money for that software lets you continue to eat while writing more, better software?

Ain't a hard concept.

I'm already making money writing software for customers. Doesn't mean I need to take money for the software I write for myself.

That logic only applies if you think of an app as an end-in-itself, as the final product to generate revenue. While that may be a viable business model in some cases, I think it misses the true opportunities for making money with a mobile app.

In my experience, apps work best as a gateway to another revenue stream or as an add-on product to an existing service. I only use free apps but I have subscribed (and paid) for web sites associated with those apps for expanded services.

A good example is an exercise tracking app which records your exercise routines, maps routes, etc. If this app is free but uploads your data to a web site which provides expanded functionality, online communities, and other services, I'd gladly pay for an account on the site.

The idea that a customer should pay you to install your app is naive and out-dated. You will simply be beaten by competition who allow customers to install the app for no cost (i.e. everyone else). But beyond that, if your only way to exchange value with your customer (i.e. they give you money in exchange for something), is at installation, then you are missing out on most of your revenue.

There are tons of articles about this online. There are regularly articles about it on HN. Noel Llopis is one of many app developers who blogs about his real-world experiences. Here is one such article: http://gamesfromwithin.com/one-price-does-not-fit-all

thx, actually quite an interesting read.

thx, actually quite an interesting read. I wouldn't say that the concept of selling an app is naive and outdated. But yes, competitors will probably release a similar app for free, which indeed is a dilemma.

Also, not all apps have potential to generate an alternative revenue stream, if so, great, otherwise I believe it can be quite problematic to monetize on many app concepts.

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