0:00:00Hello and welcome to Developing Perspective. Developing Perspective is a podcast discussing
0:00:04news of note in iOS development, Apple, and the like. I'm your host, David Smith. I'm an
0:00:08independent iOS and Mac developer based in Herndon, Virginia. This is show number 86,
0:00:12and today is Friday, October 5th. Developing Perspective is never longer than 15 minutes,
0:00:17so let's get started. All right, so I'm going to start off today's show just with a moment of
0:00:21silence. To commemorate, this is the one-year anniversary of the passing of Steve Jobs,
0:00:26which is a sad day.
0:00:29I mean, it's been a long time, and I think I was thinking about it a bit today.
0:00:34It's one of those things that the best analogy for how that feels is the difference.
0:00:39It's kind of like when you have a wound, and at first it's fresh and kind of painful.
0:00:46And at this point, it's not really a wound anymore.
0:00:49It's just kind of like a scar that you carry around with you.
0:00:52You know it's never quite the same again.
0:00:55And that's sad.
0:00:58So anyway, I was just going to start off
0:01:00the show with a little moment of silence
0:01:02and then get into the main topic.
0:01:04All right, so what I'm going to be getting
0:01:16into the rest of the show is something
0:01:19been struggling with a lot recently.
0:01:22And hopefully this is one of those things that I think a lot of people
0:01:25struggle with.
0:01:26And it's something that was one of the harder topics
0:01:28to talk about in some ways.
0:01:30Because I see a couple shows ago where I said talking about money
0:01:35is kind of a funny thing.
0:01:37And I was kind of tricky and awkward.
0:01:39But I was going to talk about pricing, and specifically app pricing,
0:01:43and kind of my thoughts on it, and the state of that,
0:01:47and where we are as an industry.
0:01:50And specifically, I'm thinking there's two things
0:01:52that I'm working on for apps and work
0:01:55that I'm doing that have big pricing concerns.
0:01:57So the first one's the weather app
0:01:58that I've been going on and on about coming soon,
0:02:01and what I want to price that at initially.
0:02:04And then the second is I'm working
0:02:06on a syncing solution for my recipe book app that'll
0:02:11let you sync your recipes between multiple sites,
0:02:13between websites, all those kinds of things.
0:02:16I'm trying to decide-- and as part of that, I'm also going to introduce an iPhone version of my
0:02:19currently iPad-only app.
0:02:21And so the big question is, you know, what do I do? Do I want to make that
0:02:25universal? Do I want to
0:02:26make it a separate thing with a paid upgrade? You know, there's lots of choices. Do I want to do subscription
0:02:30pricing for Sync? Do I not?
0:02:32You know, it's
0:02:34lots and lots of choices and things like that, so it's just really kind of a funny
0:02:38question
0:02:39of, well, how do you come up with pricing? How do you define what is-- what makes sense for
0:02:43you?
0:02:44And I think first, and this is I think especially relevant given the whole topic I talked about
0:02:50in the last show, is that ultimately you have to be very practical about this.
0:02:53You have to be very pragmatic.
0:02:54You have to be sort of sticking to whatever your pricing goals are on principle is likely
0:03:04not going to survive contact with the enemy, as they say.
0:03:07So it's kind of like you can have these great ideals of, "Oh man, I think software should
0:03:12be really expensive and people should view it as a really valuable and intrinsically
0:03:17useful thing that they're willing to pay lots of money for.
0:03:20And Apple's eroded that with the way they've done pricing in the App Store and the way
0:03:23they do charts and graphs and things, charts and graphs, with the way they do charts and
0:03:29rankings.
0:03:31And basically, I think that's all true.
0:03:35But at the end of the day, it comes down to, would you rather be successful financially
0:03:41or be sort of stick to your guns if you hold that view very strongly.
0:03:47And at the end of the day, for me, my chief goal is to provide for my family.
0:03:52And ideally do that in a way that I can continue to be independent.
0:03:58That's one of the things that I really enjoy about my current situation, my
0:04:01current job, my current work I do is that I'm independent, that I don't really have
0:04:05a boss.
0:04:05I actually was kind of amusing.
0:04:07I realized that six years since I formed my first LLC and went independent,
0:04:11So that's quite a long time that I've been doing this.
0:04:14And doing that is not an easy thing.
0:04:17And a lot of the ways in which that I've
0:04:19been able to keep doing that is to just be realistic about,
0:04:22OK, my goal is to make money.
0:04:24And I guess the really negative spin on it
0:04:28would be to say at some point you just kind of sell out.
0:04:31Maybe a more positive view is that you
0:04:33have a realistic view on the market,
0:04:35and you adapt your pricing and approaches and investments
0:04:39accordingly.
0:04:41And so this is kind of essentially where I'm heading, is I typically have a fairly loose
0:04:48view on pricing.
0:04:49And I've talked about this a little bit before, and I keep saying that, but I guess that's
0:04:53the downside of having 86 episodes is at this point I've talked about a lot of the things
0:04:57at least once, and hopefully I'm still adding new and unique and interesting spins on things.
0:05:02But I guess that's just the downside.
0:05:04I've been doing this for a while.
0:05:06But the reality is, my goal is that I want to price something such that I can get the
0:05:13most money back for the effort I put into it.
0:05:17I don't typically assign value or some kind of ephemeral sort of moral or whatever to
0:05:25the price.
0:05:27If I can make the most money at 99 cents, I'll make the most money at 99 cents.
0:05:30If I make the most money at free, I'll do it free.
0:05:32If I make the most money at $50, I'll make the most money at $50.
0:05:38That ultimately is my goal.
0:05:41And I'm not sure-- I think there are certain lines that you draw, and these are the kind
0:05:45of things where it's like, I don't really want to make my money from something that
0:05:48I would say is manipulative, that's cheating, that's lying.
0:05:53You kind of get into the classics, sort of like the Zynga premium games, where there's
0:05:57a lot of deep psychology going on to manipulate people and to make them part of their minds.
0:06:02money, those are the kinds of lines I draw.
0:06:05But I don't draw lines in terms of any particular price being
0:06:08more valid than any other.
0:06:12And so I sell my software to people, and they buy it.
0:06:15And so typically what I do, and as I think about this,
0:06:19though, is how do you find that price?
0:06:23How do you know what that is?
0:06:25And really, the only way you can know is to try other prices
0:06:29and see where it ends up balancing off.
0:06:35And that's just a trial and error.
0:06:36And I've done this many times with many apps.
0:06:39And typically in the App Store, I
0:06:41would say the overall rule-- certainly in the iOS App Store.
0:06:44It's slightly different than the Mac App Store, I think.
0:06:46But the most money is made the lower the price
0:06:49if you are ranking.
0:06:51If you are in the charts at all, you
0:06:53want to have as low a price as possible,
0:06:55because that'll help keep you there.
0:06:58and the longer you're there the more money you make at that price
0:07:02and so but as soon as you start not ranking from a charting perspective you
0:07:06may as well raise your price a bit
0:07:08you may as well make it whatever three four five six seven eight nine ten dollars you
0:07:12know kind of really
0:07:13you can raise it up
0:07:14because people who are discovering your app at that point are either word of mouth
0:07:17customers
0:07:18or customers who are searching for it
0:07:20and so I don't think so by definition they are more
0:07:25invested in trying to find it
0:07:27I guess is the right way to think about it.
0:07:29You know, they're not browsing casually looking for things.
0:07:32They are looking for your app or an app very similar to yours.
0:07:36And so doing it that way, I think seems to have overall made the most sense to me.
0:07:41And so that said, I have a, you know, there's a, it wouldn't surprise me if at
0:07:48some point check the weather ended up being a 99 cent app.
0:07:52The economics I've made sure work for that.
0:07:54And it, which is an important thing to probably have a little sidebar on.
0:07:57is you need to make sure that if you have a back end
0:07:59service that is required for your application,
0:08:02you need to make sure that the economics of that back end
0:08:04service makes sense at a low price.
0:08:07If your app can only make money at a high price,
0:08:10I think you're really going to struggle in the app store
0:08:13to not have any flexibility there.
0:08:15And so I work it out and I say, if a person buys my app
0:08:17and uses it for 18 months, that will likely
0:08:21result in server calls.
0:08:23And server calls to my weather data provider
0:08:26costs so many per call, sort of.
0:08:28I mean, that's not the way they do pricing.
0:08:29But you average it all out, and you say, OK, I
0:08:32can support that at $0.99.
0:08:35And if that's the case, then great.
0:08:37That's it.
0:08:37What I'm probably going to do is I'm
0:08:39going to launch the app probably at probably about $3,
0:08:43is where I'm hoping it would end up.
0:08:45And I'll see what happens.
0:08:49I think I'd rather start high and then work down,
0:08:53rather than start low and then have to raise it.
0:08:55and then not go anywhere and raise it up.
0:08:58That's probably where I'm going to be going on it.
0:09:01There's certainly a part of me that is always
0:09:04inclined at this point to just go to 99 cents
0:09:06and just stop worrying about it.
0:09:08But I feel like there's a certain connotation that that
0:09:13brings to it that I don't necessarily want.
0:09:16And it's not because I think 99 cents is a bad price.
0:09:18I just think there's something better about it.
0:09:21I'm saying something-- if I start off
0:09:23saying that it's three dollars
0:09:25i'm sc's i'm trying to communicate something to the world
0:09:28about the quality the craftsmanship and the effort that has gone into that
0:09:32you find a backing away from that because it's breaking really well
0:09:36and it's you know if it's flying up the charts and i feel like at some point
0:09:39lowering the price would do a lot of things to
0:09:42help me
0:09:43keep it there
0:09:44absolutely i'm more than happy to do that and that'll just be
0:09:47choice i make
0:09:48uh... the media of the upset a few people may be on the way people got a
0:09:52$3 when they see it go down to $2.
0:09:56You've got a few grumpy people, but that's just the reality of it.
0:09:59And some people are always waiting for it to go on sale,
0:10:03or those types of users.
0:10:06And it's like, that's just the reality of the store we live in.
0:10:09And I'm not going to complain about that.
0:10:10I'm just going to do what I can.
0:10:12And that's kind of the way that I do it.
0:10:15And I think hopefully that sort of very practical approach seems to work.
0:10:19that you communicate something with price.
0:10:23So having a large number, I think, hopefully, at least initially,
0:10:26can say something about your app.
0:10:30You're communicating both to you and to Apple
0:10:32that you think it's worth it, that you think it's valuable, that you think
0:10:36it's not a throwaway app.
0:10:39Then you just need to be flexible.
0:10:40And you need to ease back on that.
0:10:42And certainly the ceiling has come down.
0:10:43I don't think launching an app at $10 in the iOS App Store,
0:10:47especially on the iPhone, maybe on the iPad, but definitely on the iPhone. I think it's
0:10:50way too much. $5 probably getting even too much these days.
0:10:55That's just a natural reaction to the competitiveness. I don't think that's a reduction in the value
0:11:00or the quality of the software. I think that's a result of the competitiveness of the market
0:11:04and the size of the market. That people can make good livings selling an app for 99 cents
0:11:10because there are hundreds of millions of people who are buying those apps. And you
0:11:15you don't need a very high percentage of that customer base to be interested in it for you
0:11:21to make a viable business.
0:11:23Because at the end of the day, I'm not in this to win the lottery.
0:11:28Well, that'd be great.
0:11:30If somehow one of my apps ever just took off and made me wealthy beyond my imagination,
0:11:37that'd be awesome.
0:11:38Who wouldn't like that?
0:11:40But that's not what I'm doing this for.
0:11:42I'm doing this because this is better than a nine to five job for me.
0:11:46And so I just need to make enough that that's the case.
0:11:49And so far I've been blessed to be able to do that.
0:11:51That I've been able to be independent for years and years.
0:11:54And the app store is how I do that.
0:11:55And I introduce new apps to diversify my income stream
0:11:58to make that more likely.
0:12:00But at the end of the day, you just want
0:12:01to price something so that you can have the most total revenue
0:12:07at the end of the day.
0:12:08And I feel like being good about experimenting with that
0:12:11makes a lot of sense.
0:12:12I feel like being non-moralistic about it makes a lot of sense.
0:12:18Not getting too caught up in like, oh, man,
0:12:20I don't want to be part of the race to the bottom.
0:12:21It's like, well, that race is already over.
0:12:23The racers have already gone home.
0:12:26That's just the reality of the store we work in.
0:12:28And I don't think that's going to change, because it
0:12:32becomes more and more competitive as the customer base grows.
0:12:37The thing is, at the end of the day, you're competing against somebody
0:12:40who may have different costs than you,
0:12:44may have different goals than you.
0:12:46It's like the classic challenge of if you're, for example,
0:12:49competing against either a venture-backed company
0:12:52or a company with a brand who is not
0:12:55interested in profiting from the app directly,
0:12:57they're just trying to get recognition,
0:12:59then you have some tricky, tricky things there.
0:13:01Because they can make their app free,
0:13:02or they can make it very low cost
0:13:04and provide a huge amount of value
0:13:05because they're trying to get that value back some other way.
0:13:08And you just have to understand that.
0:13:10And you just have to embrace and not worry about it too much and say,
0:13:15if I'm just trying to make a living, I just want to set my prices at prices that will support me in my work.
0:13:20And not worry about it too much.
0:13:27I feel like you can easily get wrapped around in it.
0:13:28And I've changed prices probably hundreds of times for various apps in the store.
0:13:30Just trying different things.
0:13:36What happens if I make it lower price during the week and higher price on the weekend?
0:13:36does that do anything?
0:13:37It's like anything you can think of, just try it.
0:13:40Go into iTunes Connect and play around.
0:13:42I think that's the biggest part of it, is just being flexible.
0:13:45And so that's kind of some of my thoughts on pricing,
0:13:48and kind of where I'm going.
0:13:49And so in summary, let's check the weather.
0:13:51I'm probably going to make it a $3 app, because that's
0:13:54kind of where I suspect it'll end up.
0:13:57If it ends up charting really well, I may lower that.
0:13:59But generally speaking, that's where I'm going to start,
0:14:02because that's kind of where I think it's worth,
0:14:04her worth in the scale of, you know, apps in the App Store.
0:14:08Probably a good clarification.
0:14:10And otherwise, I'll see what happens.
0:14:12All right, as always, if you have any questions, comments,
0:14:13concerns, complaints, I'm on Twitter @_DavidSmith.
0:14:16I'm on AppNet @DavidSmith.
0:14:18You can email me from the link on the website.
0:14:20And otherwise, I hope you have a great weekend.
0:14:22Happy coding.
0:14:23I'll talk to you later.