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From 2004-2009, I basically built things I could have charged for, but didn't. I was afraid to take money from people.

DHH (et al) to the rescue: http://www.youtube.com/watch?v=0CDXJ6bMkMY

This is where the "Nice little Italian restaurant" SaaS meme was sourced from. He was hilariously spot-on.

I caved and started building things I would charge for. I'm still just part-timing it, but my stuff is growing. And, frankly, I'm not the best Rails/iOS/Java developer out there. Literally if I can do it, you can too.

Great, inspiring article.




So many people feel the same way. What was the scariest part about taking money from people?


In those days, two things:

1) The possiblility of "Oh, crap, I just bumped the decimal to the right, by accident, on 1000 customers."

2) The likelihood that someone would tell me that I was "a joke", to be charging money for my software.

So, fear of rejection and fear of screwing up on the money side. Thankfully, there are billing services which eliminated #1 a few years ago, and that was probably the tipping point for me. #2 is an ongoing concern, and always will be.

Thanks for the question!


I think the fear of rejection is huge. I'm a pretty confident guy (I'll speak in front of crowds without too much trouble). But the idea of putting a price tag on something and asking people to pay for it is scary. The biggest fear: "What if no one buys it?"


I had a leg up to begin with. I started with an audience (of sorts) that I was able to poll to gauge interest. I didn't start building until literally 200 people told me they would buy it from me. Turns out most of them were blowing some kind of sunshine (or else they found another solution before I could launch one to meet their needs), and very few converted...

But, just the fact that they said yes to my product and price point gave me the confidence to start.

But, I think you can hijack someone else's product-confidence... by which I mean you should find a 800-pound gorilla competitor in your market and just follow them into battle, and eventually outflank them. Not gonna lie, I did this too, because I got to a place where my market-vision was limited... so I piggybacked on a competitors market vision. :)


"Pay what you think it's worth" might be a good way to mentally offset this? That way, you're not affixing a price to your work but instead just asking for a demonstration of what they value it at. It's probably a unilateral upside if the entirety of your payment process is 'post me a cheque if you feel it's worth it!', for the following reasons:

1) By not affixing a price to it, people will pay what they think it's worth. By affixing, say, $20, those who think it's worth less may not pay but those who think it's worth more won't pay more. There's a small risk that people may stretch to make your price tag but instead not bother but my completely untrained gut would say that'd be minimal?

2) You're already relying on people to go out of their way to send it based on goodwill. You're not going to lose customers simply by floating the amount they can choose to send.

3) Your conscience doesn't tell you 'hey, are you SURE this is worth $20? What if something breaks for someone? You forced them to pay $20 rather than $5, you owe them more than this!'. That's got to be liberating.

Of course, PWYW works mainly if it's a supplemental income and you're not relying on it to feed yourself :) That said, I'd expect it's pretty confidence-boosting to see someone voluntarily pay for something you made, since it basically says 'hey, I think you're worth this, thank you!'

The OP and this discussion is incredibly inspiring too, it makes me want to build and release stuff in my spare time that people are completely free to pay as little or as much as they want for, just to see what happens :)


Not to mention the fear of anger from free software advocates...


Surprisingly, yes, this is a thing, along with people who are anti-SEO. I speak as a convert from the church of anti-SEO, thanks to our mutual outspoken SaaS comrade in Japan.


I used to sell a small iOS app. For me, my biggest fear was not delivering value for the $2.99 someone paid me. It's dumb when I think about it logically because it's only $2.99, but I wanted anyone who paid to also be happy with their purchase. I will say though that people giving you money directly for something you built is a rush.


Among apps, $2.99 is quite high. The average price per app in the store is roughly $1.40, and the average selling price is likely less than 50 cents (I'm unsure, because reporting is only available for average overall price, not average sale price. However, logic dictates that, given that free apps are purchased with many times greater frequency than paid apps, the average sale price would be significantly lower than that average price.). Moreover, the median is free (due to the fact that ~90% of all apps are free.) So, because the price is inordinately high, there is undoubtedly a higher standard and more pressure to deliver value commensurate with the inflated price.


This was a few years ago so things may have changed, but I played with pricing a lot. Eventually I found that sales were lower at .99 than $2.99. Above $2.99 they quickly fell off again. I assumed that a slightly higher price up to a point caused people to assign a higher perceived value.

As for a higher standard, I want to deliver value regardless of price. At the end of the day people are giving me something way more valuable than a couple dollars - their time.


Great obserations.

Let us talk out of our asses here, just for a moment. People like to call these "thought experiments":

There are two mindsets at play that I can see. Lets call them the "analytical" and the "immediate"...

[Aside: If I use my own terms like this, then I can write that book later and have my movement-terminology ready-to-go ] :)

The "analytical" mindset is willing to spend thought-cycles worrying about the fact that an app is expensive at $2.99, since the price is anchored against a million other <$1.40 apps. The level of cognitive dissonance on display here is uncanny, but apparently price-anchoring is a low-level OS service of the human brain that is difficult to kill via the Task Manager (consciousness).

The "immediate" mindset is completely free of the cares of price anchoring. This usually happens when you're playing with other people's money, or when you simply don't have a choice.

If you build for the "immediate" mindset, you win.

Of course, this is just a thought experiment and completely indefensible. However, I am willing to make a bet that contains elements that are correct.


When I had a paid app in the app store price didn't seem matter too much.

I had a free version of the app with IAP and a paid version. Both initially cost $0.99 but after 6 months I raised the price to $1.99. Sales actually went up. I think if you have an app people like and you have good reviews, price isn't as important.

Graph for paid app https://www.dropbox.com/s/s7zvicfuan9ci5n/paid.png?m

Graph for IAP https://www.dropbox.com/s/3ddr15si5qp5bux/iap.png?m


Funny thing, your reviews also go up when you raise the price. I have 2 theories to explain this: - People who pay for something are more likely to research it before, and thus will only get the product if they think it fits their needs. On the other hand, if the app is free and it doesn't do what you thought it did, you might give it a bad review. - People who pay for things tell themselves that they're buying more quality, and so they truly see things differently.


Probably dealing with angry customers.




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