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Discount Software Is A Myth

I was thinking yesterday about my revenue. And how I might need to increase my prices if I am to survive. How difficult it has been, I reflected, to get my user base up to the point where I’m making a certain amount each month (through subscriptions). Can you imagine if I had to repeat all that work every few months to bring in that same amount on a rinse-repeat basis? What madness.

I could not imagine the cruelty of such a world. Building a software product and toiling over marketing over the last several months has been the most difficult experience of my life. Nothing could have prepared me for its challenges. And throughout it all, I’m really not quite sure what is more difficult: software development, or marketing. Both require a galactic amount of time and energy.

And the truth is: if you’re doing good work and selling your software on a one-time basis for 99¢, you’re getting ripped off.

Yours is a losing deal. Because the only people benefitting from your labor are Apple and its customers. For every apple you grow, Apple takes a quick bite covering 30% of the surface, then hands over the rest to you.

“Here. Fix more bugs.”

And so you do. Maybe you get lucky, and get featured in some prominent section of the store. You make a quick thousand or two. You fix some bugs. Maybe add some new features. But nothing lasts forever. Your feature is pushed aside to make room for the new. You’re old news now. Maybe you’ll find a permanent spot on the top 100 in your category? Nope. Those haven’t changed in years. Your sales stabilize at 3–5% of what they were at their peak. Your users? They’re not yours. You’re just a wholesale distributor – why on earth would you want to connect with your customers, right?

The Apple Deal is the devil’s deal. All that life-long passion, that hard work, the endless days and months – your customers steal it from you with a handful of pennies, then Apple gets its 30% share. No questions asked. I’m reminded of another entity that chews off your labor at a similar rate. When both have taken their turn, little is left for you.

Don’t do the Apple Deal. Respect your work, yourself, and your users. Make a good product, and charge a healthy price for it. If you have the luxury of not distributing your software through Apple, charge a subscription for your product. Subscription is the only reasonable deal for developers looking to build a long-term company and brand. If you must sell on the App Store, don’t charge anything less than $4.99.

And if you don’t think your product is worth $4.99, really consider whether you should be making it in the first place. The world has enough crappy apps. Strive for something better. Charge a real price for it. And don’t settle for anything less.

The project for which I was contemplating a price increase is Standard Notes, an encrypted notes app. The current prices are $4/month and $36/year. Alas, when you’re a small company, even that can not suffice.

I write frequently about building a software business as a developer. Subscribe to the mailing list to get the latest posts.

Top comments (1)

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Price Comstock

CGP Grey has talked about this on the Cortex podcast a few times, including the most recent episode. Basically he prefers apps to be subscription based because it makes it way more likely to be around in 5 or 10 years than if it's a one time purchase, which is important if you're going to be self employed and rely on some app to keep you working (and fed).