My, How We’ve Changed.

4 04 2011

The other day I did something I haven’t done much of in my life. In fact, I could probably count on both hands the instances in which this has happened. Sure, I’ve thought about it, even imagined what it would be like, but I’d hardly ever followed through. I might have even been a little nervous, to be honest.

I bought an app.

Sure, I’ve bought some iPhone apps – those $0.99 deals that I hardly even think about. But never more than maybe $10 at a time.  So when I dropped $50 on Pixelmator and Sparrow, it was a pretty major event.  Having spent my entire computing history trying to avoid paying fees, I thought it’s worth mentioning.  I remember spending hours in the late 90’s learning C++ in the hopes of evading the ‘registration requirements’ of some of my early computer games. I may have even experienced some pirated software (a high school kid with a valet gig cannot afford anything Adobe puts out…I’m just saying). But I’ve almost never really bought anything.  So why the change? And more than that – why do I feel so good about it?

It’s not because I’m making more dough, and it’s definitely not because I’m more mature (no way!).  I think it’s because now I know what apps are going to provide me value.  Having a good idea what I’m going to get from a full-version of the product is a huge step to getting me to buy.

A few key changes have made this possible:

first, Google search made all sorts of content findable. Anytime I think about purchasing something, I always Google it to see if there are any reviews out there. Quora is doing this as well – lots of comparison topics out there.  You can be sure that before a customer drops dough on your product, they are searching to see how everyone feels about it.

second, the Apple “store” format brought reviews to software. This goes for both the iTunes store and the Mac App store. Before these were in place, buying software was a relatively closed-box experience. Today, there are hundreds of reviews for any popular app – if I don’t see any reviews, I run the other way.

third, Google made “freemium” products real. Because Google product’s revenue impact has nothing to do with purchasing licenses and everything to do with how you use the product, they could put a reasonable amount of resources into developing ‘free’ software. If a paid app couldn’t beat their free offerings, they were eventually killed in the market. In my mind, this pushed development teams forward, and made resources (read: talent and investment capital) more available for the teams hell-bent on creating a valuable piece of software.

This became more clear to me in a recent demo I was giving a friend on web analytics tools.  His employer has been using google analytics, and he was wondering if there was more out there for him to look at.  While I was showing off the good stuff Performable can do, and how we us Clicky at Wistia, it dawned on me – if these apps couldn’t beat Google Analytics, they’d be dead.  The pressure of a ‘free’ competitor is pushing their development forward in a positive way.

There are other reasons too – as development costs and time come down, it becomes possible to iterate on an app quickly to reward customers. Marco Arment, creator of Instapaper, has done a great job delivering additional value through product updates. Sure, he knew charging was going to eliminate some percentage of the potential pool of customers, but those customers that have paid have been rewarded with a simple product that does some amazing things.

A blog post by David Humphrey entitled, “Dear Twitter” highlights this behavior change quite well. He’s tired of Twitter’s buggy interface and slow speeds – and he’s willing to pay to get better service. He recognizes the value Twitter brings to his business and his personal brand…he just wants it to work better.  We can collectively vote with our wallets much easier and share ratings much faster (thanks to the iStores). We can also build products that are better than the free apps we can’t stand (like Feedly rather than RSS reader).

So where does this lead us? While it’s too soon to say for certain, I can say in my own world our subscription fees are allowing us to spend time building features to delight our customers. In my daily life, apps are also making it easier to access and digest information, accomplish tasks, and communicate with others. I get genuinely excited when I see upgrades available on the App Store, because I know it means a slew of improvements on top of a product for no additional costs to me. In short – life is good, even if I’m a bit lighter in my digital wallet.

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