As StyleAssist approached release, we were tasked with the unenviable job of trying to find the right price point. We live in a strange economy on the app store. The vast majority of apps are sold for under five dollars, but there are success stories at $20, $50 and $100 price points. So how does one determine what to charge for software in the app world?The democratization of software development has brought with it an era of 250,000+ apps available and SEVERE price competition. Looking for an app to manage your to-dos? What do you want to pay? There are innumerable free options on the low end, probably more than 50 in the ¢99 - $4.99 range in the middle and then options like Things at $9.99 (or $19.99 for iPad).
But the most important question anyone should ask when clicking the "Buy App" button is not "is this the cheapest" or even "is this the best app for what I want to do". The question to ask is - do I want this company to be around next year? While there may currently be almost 300,000 apps available, how many of those are still supported? How many are still in active development? How many of the companies that made them are even still in the business? While the era of the app has brought with it the era of "functionality nuggets", it will hopefully not also herald the end of software development as a viable business strategy. "Vote with your wallet" isn't just a platitude.
We released StyleAssist at $4.99 and the thud heard in the app store would be legendary, if it weren't so typical. In the grand scheme of things, how much is $5 really? Especially when one considers that upgrades are free for life! I had a meeting this week to discuss the future of StyleAssist and the two cups of coffee sitting on the table cost more than a single copy of the app. I pointed this out when my colleague mentioned the difficulty of convincing someone that $4.99 wasn't too high a price.
But since the inception of the app store, there has been a consistent drive to the bottom. As a result, the app buyers of the world have been conditioned to expect free or ¢99 apps that can do anything they want. When we arrived at $4.99, we were trying to balance the desire for sales against wanting to fund the next round of development for StyleAssist. It looks like we missed the mark a bit. So we've done what lots of app developers do in this situation, we've dropped the price.
This is not a sale or a promotion. We've decided that we overshot our value proposition and have adjusted our expectations accordingly. The most exciting thing about being in the mobile software space is being a part of a new and developing industry. And it's a constant learning experience. The hope now is that we don't learn ourselves out of business.