Live data from Hacker News

Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

joshlehman.com

161–170 of 207 posts

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#161
In the last few days after I woke up, I picked up my iPad, and I started to see all these posts trying to figure out what's wrong in the app business. This looks like random debugging more than anything else. Seriously, stop. Please, just read some business books, talking about like say the 4Ps, and then try to figure it out.

We're over thinking the problem, and the cup of coffee analogy is a perfect hit, it is a pricing issue. We as developers don't know how to price our products. Just search HN and see how many posts are talking about pricing experiments.

To the post. It mainly blames three areas: customer experience, free/paid issue, and craftsmanship. Which in business talk translate to product, pricing, and promotion.

We first tried to fix this mess by cutting down the price of our products. Things didn't work, sales still going down. And what did we do? Rinse and repeat. We kept doing that until we reached the bottom price, which now seems to be free. Newsflash, the problem stills there.

Worse, to stay in business the only option we had was to keep cutting down on other areas. The candidate picked for the next round of random debugging was the product itself. Quality development costs money, so product quality had to suffer. As a result we've got this endless sea of crapware we see in the AppStore and elsewhere.

That has led to another round of random shooting at business bugs. The next victim is promotion, or in other words, software craftsmanship, which is an attempt to fix the image problem caused by the race to the bottom. It won't work! People don't care about all the sweat and tears that we put into our work, they just want to save money. And thanks to us, they're all doing that.

In the end the problem remains, and we still have to go the the source in order to make the right decisions to fix this mess. The shareware business model sure would be an easy fix, but it won't happen. Another solution, if you aren't in SAAS or IAP, is to raise your prices and pull out the free products. Some developers have done it and they have gotten good results.

Finally, people spend four bucks on a cup of Starbucks coffee because they need the kick to wakeup and go about their life. If you figure an app to do that, please don't sell it for one buck! It worths more.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#163

Earlier quoted context omitted.

> If the food is horrible, I can send it back. You CAN...but legally, you can't walk out on the bill. Even walking out after ordering is illegal, as I understand it. And if one thing that arrives is terrible, then are you really going to trust that something else will be better? Probably not. So are you really going to walk out without paying? Most people won't, and you would be breaking the law if you did walk out.…

I believe in the UK you can leave what you think the food was worth (down to zero) along with your name and address so the restaurant can take you to small claims court if they wish to dispute the value they provided. I have heard of precisely one first hand account of this being used for a truly terrible meal. The police were called and confirmed the dinner's rights.

Almost correct, I believe. You have to pay full price if you finish the meal, because it is assumed you must have thought it was worth the money - otherwise you would have stopped earlier.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#164

Earlier quoted context omitted.

I've been hating Starbucks since 1993 where at my first job at a movie theater we shared a trash compactor with them, and those bastards would never press the button, so you had to stand in the smelly garbage room and wait for it to compress their garbage before you could throw yours in. It would be years before I could actually afford to buy a coffee from there. Now I live in London, and as far as I can tell, all th…

> Now I live in London, and as far as I can tell, all the good coffee is made by Aussies, In New York, Swedish coffee (of all things) seems to be the up-and-coming thing: http://www.fikanyc.com/about http://www.konditorinyc.com/ No idea why. Scandinavia is exotic and hip these days, probably. Then again, a lot of new Swedish things are popping up, like Swedish pizza places (which, if you haven't had it, mostly revolv…

Whoa. I actually got a touch of national pride there! What a feeling! :D

Anyway, one reason Swedish coffee culture might be something that can be noticed in NY is that we're pretty good at drinking coffee.

See http://en.wikipedia.org/wiki/List_of_countries_by_coffee_con...; to get a hint about how important coffee is in Scandinavia.

Sweden is down at #6 these days, but we still clock in at roughly twice the consumption per capita compared to the US.

And the word "fika" which the first place is named for has loads of connotations, it's simply deeply entrenched here.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#165
post #47

Horrifying. The point about the coffee cup comparison isn't that cups of coffee are the benchmark experience for product pricing; if that were the case, my next root canal would cost $0.20. The point of the coffee cup comparison is marginal utility : the money you spend on an expensive cup of coffee almost certainly has very little utility at the margin, because you are happy to chuck it away for a bad cup of coffee.…

> A dollar at the margin for a person with a $600 phone on a $50/mo data contract is not an enormous gamble

It's not a big economic gamble, but there are good chances of getting screwed, which is more important than the money. I believe that's contributing to the prices being pushed down. I don't mind paying for the software I like, but I absolutely mind paying to try out 4 other apps that turned out that sucked. Indeed, because I had to give them money to find out, they will have the funds to keep on sucking. Effectively, I can't vote with my wallet.

Try shopping for an ssh client or a vnc client in the app store. I suspect you'll have that exact experience.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#166

Earlier quoted context omitted.

I've been hating Starbucks since 1993 where at my first job at a movie theater we shared a trash compactor with them, and those bastards would never press the button, so you had to stand in the smelly garbage room and wait for it to compress their garbage before you could throw yours in. It would be years before I could actually afford to buy a coffee from there. Now I live in London, and as far as I can tell, all th…

> all the good coffee is made by Aussies Hold on a sec. What about Italians?

Well I haven't found a real Italian coffee shop in London yet so I can't say. The only Italian joints I've been in have been mom and pop cafe type places. Someone you go for a quick bite. The coffee has been middling at best, certainly no baristas behind the counter.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#167

I agree with the idea that purchasing 99 cent app is a total gamble, even if I don't have much to lose. If I were writing a mobile app, I'd have a free version and a paid version. The only difference between the two would be with the free version, you'd have to look at a screen trying to get you to upgrade to the paid version, and you would be forced to look at this screen for at least X seconds, where X is proportio…

That's a great way of accumulating a lot of 1 star reviews very quickly.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#168
post #47

Horrifying. The point about the coffee cup comparison isn't that cups of coffee are the benchmark experience for product pricing; if that were the case, my next root canal would cost $0.20. The point of the coffee cup comparison is marginal utility : the money you spend on an expensive cup of coffee almost certainly has very little utility at the margin, because you are happy to chuck it away for a bad cup of coffee.…

I think you're missing the OP's point.

The marginal utility of a Starbucks coffee is indeed very small, but at least it is known. The marginal utility of your $0.99 app is unknown and possibly even negative.

Of course I agree with you on the issue of pricing, but I think that's orthogonal to this discussion.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#169
post #37

Why doesn't the App Store just let people get a free 24-hour trial of any software? Or at least for any software where the developer didn't specifically opt out of offering free trials?

Don't you think it is the developer's responsibility to provide a demo/trial if they wish?

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#170
post #164

Earlier quoted context omitted.

> Now I live in London, and as far as I can tell, all the good coffee is made by Aussies, In New York, Swedish coffee (of all things) seems to be the up-and-coming thing: http://www.fikanyc.com/about http://www.konditorinyc.com/ No idea why. Scandinavia is exotic and hip these days, probably. Then again, a lot of new Swedish things are popping up, like Swedish pizza places (which, if you haven't had it, mostly revolv…

Whoa. I actually got a touch of national pride there! What a feeling! :D Anyway, one reason Swedish coffee culture might be something that can be noticed in NY is that we're pretty good at drinking coffee. See http://en.wikipedia.org/wiki/List_of_countries_by_coffee_con... ; to get a hint about how important coffee is in Scandinavia. Sweden is down at #6 these days, but we still clock in at roughly twice the consumpt…

You need to remove the trailing '>' from your link (or don't put it between angle brackets).

Going by that page perhaps I should start a dutch coffee house in NY!

I wonder if there are many Starbucks in Scandinavia? I know of only one here in the Netherlands.

Post reply on HN