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Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. His business interests include a diverse range of industries from manufacturing to property to technology. As a technology commentator he has a broad presence both in the traditional media and extensively online. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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4 responses to “Get Real With Pricing”

  1. schultzter

    I’ve thought about (caveat: this is often as far as my ideas get) developing some apps for Creator or App Engine or some platform, but one thing that’s holding me back is that I might eventually have to pay to run my own app.

    At least if I develop a thick/local app I only “pay” when I bought my computer. And anyone I share my application with would similarly already have “paid” for the resources to run the app.

    I like the idea of running in the cloud though. I’ve left something at home often enough, or had a storage device fail one time too many, etc.

    But, on the question of pricing, how do I price my offering?

    I’d like to see platform providers offer a tool to suggest pricing. Hopefully based on historical usage during testing, but at least on something easy to evaluate (I have no idea what to put into Amazon’s AWS calculator).

  2. ian sweeney

    Ben,

    here’s my take. Pricing is one of the most complicated components of marketing and usually the area where startups have the least experience and typically no historical data.

    So how do you decide on pricing? Easy, what are your objectives? I’m guessing here, but ballpark are probably aiming at building a fully featured app that will eventually justify the asking price. In the meantime, they are skimming the top of the pyramid. Thats to say, they are getting a few people (early adopters) to cover their bills while they get to the point where lots of people will pay for the product.

    As you know, we’re building a new type of product. The best way to understand how it should work and what features it would have, was to use penetration pricing for the first generation of the product. In our case, we set the price = 0, with the objective of getting lots of feedback.

    Now users have spec’d our new product for us and we have some pricing data. We’ll combine that info with a new set of objectives which will inform our pricing decisions going forward.

    A great book around this subject is “The strategy and tactics of pricing” by Nagle and Hogan. It is well worth reading if you need to price something.

    Ian

  3. Andrew Peek

    Hi Ben,

    Great post… and an interesting angle to approach the comparison.

    For what it’s worth – in FreshBooks you can also see when an emailed invoice has been viewed by a client. ;)

    Cheers. Keep up the great work.

  4. Tony Mobily

    Hi,

    I agree with you: when you create a product, getting the pricing right is the other half of the story, and you need to get it right. Charge too little, and you will get the wrong audience and an unsustainable business model. Charge too much, and you end up with few, not-so-loyal users.
    Pricing Apollo for us was tricky http://www.apollohq.com We include project management _and_ CRM. Plus a calendar, timers, cases&deals, Basecamp/Highrise import… We could have decided to charge a lot more, but decided to stay real and stay humble. So, now Apollo offers more than Basecamp, and costs less.

    Well, that’s my take. Thanks for listening :D

    Merc.