Developing Perspective

#145: Real World Price Dynamics with Lauren Smith.


00:00:00   Hello and welcome to Developing Perspective. Developing Perspective is a podcast discussing

00:00:04   news of note, and that was development, Apple, and the like. And this week, we're going to

00:00:08   take a break out of my normal 15-minute monologue, and I'm going to have a conversation. It's

00:00:13   not quite the interview series that I've done sort of periodically on and off. It's more

00:00:17   just a natural conversation that came up that I thought would be interesting to share. And

00:00:21   so this week, I'm going to have a special guest, Lauren Smith, my wife, sometimes known

00:00:26   as Mrs. Underscore, who is-- we were having a conversation

00:00:30   earlier today.

00:00:31   We were just talking about work.

00:00:33   And I was mentioning to her some of the-- I guess,

00:00:36   some of the drama, some of the back and forth

00:00:38   that had been going on about app store pricing,

00:00:41   about the nature of that, and the difficulty

00:00:45   and the disconnect that often seems to happen between

00:00:48   developers and customers, and how that frustration seems

00:00:52   to be manifesting itself now.

00:00:53   And I was talking to Lauren, the difficulty of this was interesting in talking to her

00:01:01   because she's somebody who's both a typical customer in the app store, she has an iPhone

00:01:05   and works a lot with it, as well as somebody who is aware of what it's like to run a business

00:01:12   the way I do.

00:01:13   And so without further ado, I'm going to introduce Lauren.

00:01:15   Lauren, say hi.

00:01:16   Hi, everybody.

00:01:17   All right.

00:01:18   And so we're going to start talking about this a little bit.

00:01:20   And so I guess at first I thought it would be interesting if you could just talk about

00:01:24   your reaction and the way you kind of reacted and thought when you saw what happened with

00:01:31   Clear, which is an app I believe you use all the time, right?

00:01:35   Yes.

00:01:36   Yeah, I love the app Clear.

00:01:37   Yeah.

00:01:38   And so recently you were aware of sort of all the things that happened where they created

00:01:42   a new version, released it, and just kind of walked through your reaction to that.

00:01:46   Yeah, it's interesting.

00:01:47   I first found out about this because after Dave stood in line for me to get the iPhone

00:01:55   5S, I decided to start with a clean slate on my phone.

00:02:01   I'm a big to-do list person, I have a lot of things juggling as many people do.

00:02:07   One of the first apps I decided to re-download was Clear.

00:02:10   I went to download it and it said I needed to pay again and I was confused.

00:02:14   So I asked you, I said, "What's going on?"

00:02:17   And you said, "Oh, they released a new version."

00:02:19   So my very first thought was, "Oh man, what a bummer."

00:02:23   And then of course my second thought is knowing the business side, "Well, okay, that makes

00:02:26   sense.

00:02:27   I understand that they have to make a living just like everyone else."

00:02:30   But the reality is I chose not to pay the extra whatever two or three dollars it was

00:02:35   to download the new version.

00:02:37   And so instead, what I decided to do is say, "Well, maybe Apple's native app is actually

00:02:43   not going to be so bad in iOS 7 after all.

00:02:46   So I'd used Reminders when it first came out and didn't like it for a number of reasons.

00:02:52   It just didn't suit my needs.

00:02:54   And so I stopped using it and really have loved Clear ever since.

00:02:58   But then because they decided to charge again for the iOS 7 version, I am back to Reminders.

00:03:07   And it's not so bad.

00:03:08   So that's where I am at this point.

00:03:10   Sure.

00:03:11   And the interesting thing I think about that I find about that is it's not necessarily

00:03:15   that you have an objection to paying for it so much as it seems like there's this interesting

00:03:22   thing where by forcing you to make that decision again, you immediately sought out other alternatives.

00:03:30   Exactly.

00:03:31   And I mean, I think the reality is I didn't seek out other paid alternatives.

00:03:35   It wasn't that I decided I didn't like the app style or their philosophy about how to

00:03:40   to do a to-do list or whatever. It was just if I have to make the decision to buy it again.

00:03:48   I mean, I liked the old version if they had given me an easier option to just download

00:03:52   the old version. And I know I could go back and do that. But there's just that mental

00:03:56   block against going back and kind of rehashing the same thing I've already done. So yeah,

00:04:04   I don't know how else to explain it.

00:04:06   Sure.

00:04:07   And it's – the interesting thing there is do you think if you'd gone back to reminders

00:04:12   and you'd found that it just – it didn't really work at all or it was not a good experience,

00:04:17   that at that point you'd go back and sort of start working your way back up the tree

00:04:21   of like, "Oh, I wonder if there's a free option.

00:04:24   I wonder what the next other paid options would be."

00:04:26   Is that kind of where your mentality would go or did you just go right back to clear?

00:04:31   No.

00:04:32   Because in thinking about my philosophy with app purchases, I think I would go right back

00:04:38   to clear because I'm willing to pay, given the relatively small amount of money it is

00:04:44   for really any app in the App Store, I'm willing to pay that money if I feel like I really

00:04:49   get value from it.

00:04:51   I was thinking about it, some kind of irrational fear though of paying, God forbid, $2 for

00:04:56   something that I feel like does not meet my needs.

00:05:01   And so I think that's where my block comes from,

00:05:05   is that it's, I know that the old Clear app met my needs,

00:05:08   I was happy to pay that, but what if this new app

00:05:11   doesn't actually do things even as well?

00:05:14   'Cause I know in the spirit of changing things,

00:05:17   sometimes developers make decisions

00:05:18   and they can't always make everyone happy.

00:05:20   And so what if I'm that person who doesn't like it anymore

00:05:22   and then I just paid more money for something

00:05:25   that is gonna not really be what I'm interested in?

00:05:28   - Sure.

00:05:29   Do you think, one of the things that often comes up when us developers are talking about

00:05:34   this kind of thing is we come up with a concept of trials.

00:05:39   Some kind of time limited thing where you would buy an app from the store, you'd have

00:05:43   it for some amount of time, whether that's 30 minutes, two days, a week, whatever it

00:05:50   is.

00:05:51   And then after that trial runs out, you'd have to pay, but you could try it for free

00:05:54   for a while.

00:05:55   Do you think that would change your kind of calculus as you're sitting in front of the

00:05:59   store? Absolutely. I love free trials. Many, many apps that I have upgraded to the paid

00:06:05   version have been because I downloaded the free version. It was limited in some way and

00:06:11   I realized I love it and I want more. And so I'm glad to pay that extra money because

00:06:17   I want to support the person who's making that. But there have been many apps that I've

00:06:21   downloaded the free version and I've said this is not suit my needs for whatever reason.

00:06:26   I'm so glad I didn't. Even though mentally a dollar isn't even that much, it just feels

00:06:31   wrong somehow to pay that money for something that I'm never going to use.

00:06:36   Another thing that's interesting as I was thinking about it is the difference between

00:06:40   an in-app purchase and a paid new version of an app similar to what Clear did. And I

00:06:47   think the thing as a regular consumer, the thing to me that I like about in-app purchase

00:06:52   that feels less wrong in some ways is that you have a basic app that you've purchased

00:06:58   and that has a certain set of functionality and features and if it's something that you're

00:07:02   happy with, you feel good about the value that you receive from that.

00:07:06   An in-app purchase is a feature set that's above and beyond the basics and so that as

00:07:12   a consumer, that feels perfectly reasonable to me to add that additional level of cost

00:07:19   to additional features.

00:07:20   In my mind, I'm not an unreasonable person as the regular normal, where I realize that

00:07:28   more features should cost more money or do cost more money, and so that's fine.

00:07:32   But when you present it as, in my mind, the same app that may have some of the same features

00:07:38   that I already had in the old version, then that's where it feels...

00:07:43   There's a check there where I'm like, "Wait a minute.

00:07:46   I thought I already had paid for these features."

00:07:49   For better or for worse, I expect my app to be bug-free for the duration of its lifetime

00:07:57   and my need of it.

00:07:58   So in some ways, I know that becomes tricky for developers.

00:08:02   But on the other hand, I think that the misconception that people aren't willing to pay for extra

00:08:10   features is actually a misconception.

00:08:13   It's just the presentation of how it's paid for.

00:08:16   Because if you present it as this is an add-on, this is an addition to the basic set of features,

00:08:24   then I think people are much more willing to do it.

00:08:27   And really, for better or for worse, that is why the free-to-play model works so well.

00:08:33   We don't need to get into the conversation of whether it's moral or not to extort money

00:08:37   from people in a psychological fashion.

00:08:40   But the reality is there is not the outcry from people about apps like Candy Crush or

00:08:44   or whatnot where it's this addictive, free-to-play business model because people feel happy to

00:08:50   pay that extra money because whether or not they actually are getting the value, they

00:08:55   feel like they're getting more value for every dollar they spend.

00:08:59   Whereas if you – another business model as we've been talking about, it just – it

00:09:05   feels like you're paying for the same thing again rather than something additional.

00:09:09   Sure. The interesting thing, and I know this for myself, is there's a once bitten, twice

00:09:19   shy kind of a thing where having a couple of bad experiences where you end up buying

00:09:25   something that you have buyer's remorse for can sour you on things. That disconnect, I

00:09:32   I think in some ways between the logical part of your mind, maybe, and the kind of emotional

00:09:39   side of it, where logically you know it's a dollar.

00:09:42   It's not a huge amount of money, but it still feels like somehow you cheated or swindled

00:09:48   out of that dollar.

00:09:49   Exactly.

00:09:50   And I will say the one category that is not that way for me is if a friend has recommended

00:09:57   it.

00:09:58   say not to be stereotypical, but having small children, one of the areas that I actually

00:10:03   am willing to spend money on apps is children's apps in a way that I wouldn't risk that money

00:10:09   for myself. But if I have a friend who says that her child loves a certain app, I'm willing

00:10:14   to buy the full version or "risk it" even if there's not a free version right away because

00:10:21   I know somebody I trust uses it and is pleased with the product.

00:10:25   So the power of a friend's recommendation is very strong.

00:10:33   Sure.

00:10:34   And is that just in terms of so that it eliminates the risk to you?

00:10:41   Or is it just on the strength of like the – because it's recommended, you know it's

00:10:46   going to be good?

00:10:47   I mean, I would say some of both.

00:10:49   It kind of seems like the same thing to me where there's not risk because there's

00:10:55   someone I trust says it's good, and so I feel like there's a certain amount of value to

00:10:59   that.

00:11:02   I think that there's a maze of apps in the App Store in any category.

00:11:08   I would say I think most people would agree that there's a lot of junk apps in the store

00:11:12   as well as some really good ones.

00:11:14   It's hard to find those gems even as we know there's the black box of how Apple chooses

00:11:20   which ones to feature.

00:11:21   But other than that, there's really no way to know what your $3 is really going to buy

00:11:26   you if it's going to be really worth it or not.

00:11:29   And so I think that's another reason is knowing what friends use helps with that.

00:11:34   I do have some friends though that just don't buy apps.

00:11:39   They download a lot of apps.

00:11:40   They use their phones for apps.

00:11:41   But if it's not free, they're not interested.

00:11:44   And so I think that's a different perspective as well.

00:11:48   Even though it's not a money thing necessarily, I think it's more of a philosophy on their

00:11:51   part. Sure. I was wondering if you could elaborate on that. That was actually going to be my

00:11:55   next question. In terms of, do you think, what do you think is, like, just in your

00:12:00   normal day-to-day, your interactions with people, people who have

00:12:04   smartphones or iPhones, what do you think is sort of the prevailing philosophy that

00:12:10   people seem to have if you have kind of have any insight into that from just

00:12:14   like your just day-to-day interactions with them or things the way that they

00:12:17   interact with the App Store and the way they view it.

00:12:20   Well, it's interesting.

00:12:21   I mean, I think that a lot of people don't realize that the App Store is separate from

00:12:26   Apple in terms of the fact that third-party developers can submit and sell apps in the

00:12:31   App Store independent from being Apple employees.

00:12:34   When I talk about what you do, a lot of my friends or family or whatever will say, "Oh,

00:12:38   does that mean he works for Apple?"

00:12:41   Which is just a very different perspective obviously than someone who is on the inside

00:12:46   and knows how all these things work.

00:12:48   So I think that's the first thing, is that people don't really realize that these are--

00:12:53   I mean, sometimes the apps are made by big shops, but a lot of these are indie apps who--

00:12:58   a small team of developers, or in your case, a one developer who's trying to make a living.

00:13:03   It feels much more like an amorphous entity to them without a name or a face.

00:13:09   And so I think because part of that, they have very high expectations and expect very

00:13:13   low cost.

00:13:14   So they don't understand the necessity for repeat revenue from a single customer in order

00:13:22   to have a sustainable business.

00:13:25   So I think that's definitely something that is important to think about in terms of interaction.

00:13:31   Another thing that's really interesting is that Apple has a whole suite of really very

00:13:37   complicated, high quality apps that come for free with the purchase of your phone and regularly

00:13:45   get updated through OS updates.

00:13:48   And so I think that that's another thing that the average person is primed by Apple to expect,

00:13:54   "Hey, I have amazing apps and they are regularly updated, they fix bugs, they do all these

00:14:01   cool new features and I never have to pay anything for them."

00:14:05   And maybe the average person doesn't realize that they're indirectly paying with all the

00:14:08   other ways that they support Apple.

00:14:10   But I think specifically thinking about the apps in the App Store and that are native

00:14:15   on the phone, it's huge that you are primed to not expect to pay additional money for

00:14:26   additional features in a way that people are primed to expect to pay when they're looking

00:14:32   app software, even for their Mac or PC or other devices.

00:14:36   The phone specifically, I think people expect more and higher quality for free.

00:14:41   And that's also been compounded, I think, by the recent announcement that their Office

00:14:45   Suite pages and all of those are going to be available now for free.

00:14:50   And I'm sure Apple had a host of reasons for doing this.

00:14:55   But I think the reality is that that's even going to exacerbate the problem even more,

00:15:00   that the average person, not only do they not differentiate

00:15:05   between third party developers and Apple,

00:15:07   but now they see these amazing apps that are free

00:15:10   and expect others to be either free

00:15:15   or at least no paid upgrades as you go.

00:15:19   - Yeah, I mean, I think it's certainly a difficult thing

00:15:22   and I know software development,

00:15:25   it's been especially difficult in this way

00:15:28   that the output has a very limited relationship necessarily to the input that went into it.

00:15:38   It's not the kind of thing where you look at...

00:15:41   If you look at a brick layer laying bricks and you see the wall getting higher and higher,

00:15:46   you kind of have a sense of that was a lot of work going into that.

00:15:48   Whereas I think in software, because you're seeing such a thin layer on the front of an

00:15:53   app that you actually interact with, that you have no sense of...

00:15:57   I imagine even something like, if you think of the concept of something like sync and

00:16:01   synchronizing data and all that kind of thing, I imagine most people just think it just works.

00:16:08   Is that accurate?

00:16:09   Are those types of things, like a lot of these kind of features that are actually under the

00:16:11   hood really difficult and expensive to maintain or just sort of, "Oh yeah, that's just something

00:16:17   that you do."

00:16:18   Oh, sure.

00:16:19   I mean, most people, I would say, probably don't even realize what the cloud is or how

00:16:22   it works or not iCloud, even just syncing in general.

00:16:27   It just magically happens.

00:16:28   And I think, too, there's this expectation.

00:16:32   It's a difference in perspective of if it just works, they don't really appreciate how

00:16:36   complicated that is.

00:16:37   But if something breaks, no matter how small, it's very offensive.

00:16:43   And so I think that's the other side of it is the bug fixes seem to be sort of emergency,

00:16:49   immediate, "You must put out my fire," even when they don't realize the larger scope of

00:16:54   of what you're trying to do and all of the other competing priorities.

00:17:00   And then I think just to wrap up, I thought it would be interesting, do you have any thoughts

00:17:04   or things that you would think would improve the situation in terms of developers?

00:17:11   Is it a communication challenge?

00:17:14   Is it just an education thing that if Apple spent a lot of time doing commercials, trying

00:17:21   to create that face to developers and what's going on there.

00:17:25   That would help.

00:17:26   Is it a structural thing or is it just an inevitable thing?

00:17:29   Where do you think this kind of could be going forward?

00:17:32   - I really don't think that Apple has probably any interest

00:17:37   or desire to make the third-party developer experience

00:17:40   with their customers any better.

00:17:41   I mean, it doesn't hurt them.

00:17:43   Customers still buy apps.

00:17:44   I think it's really the onus is on the individual developer

00:17:48   to try and make their customer base understand

00:17:50   they're coming from and the complexities involved.

00:17:52   I don't know.

00:17:55   It's very hard to communicate with your customers because you don't want to spam them.

00:18:00   Many people are annoyed even in a new version of an app with a pop-up comes where you're

00:18:05   explaining something.

00:18:06   Most people won't even read it.

00:18:08   But I think that there is, at least in our own business, I have seen interacting with

00:18:14   the customers to some degree on support.

00:18:15   I have seen that there's a much more stronger level of understanding and forgiveness if

00:18:23   they see a face and a name and a person behind this amorphous product.

00:18:28   I think interacting with one of our apps is basically the same to the average person as

00:18:33   interacting with Microsoft Word or one of Apple's native apps or something like that,

00:18:38   where it's like they assume that this giant company with these large number of faceless

00:18:43   People slash bots are creating something that should work perfectly every time.

00:18:47   And so when something, especially if something doesn't work or you're trying to make some

00:18:51   type of change that people may be surprised by or uncomfortable with or just need to get

00:18:58   used to, even if it's a better change, I think communication really is key to that.

00:19:02   And so being as respectful and personal as you can with customer support, I think is

00:19:09   really your strongest touch point with your average user and those users will tell their

00:19:14   friends if they feel like they were treated like an individual and you cared about their

00:19:20   concerns.

00:19:24   Even knowing what I do about the business of apps, I have emailed other developers for

00:19:31   compliments as well as concerns and I very rarely even get a response saying, "Thanks

00:19:37   your feedback, which leaves a very bad taste in my mouth.

00:19:40   I know it's annoying.

00:19:42   I know it's time consuming, but it really does make a huge difference.

00:19:45   And even for those folks who did write back saying, "Thank you.

00:19:48   I'm thinking about that," or, "Maybe I'll add that feature in the future," or whatever,

00:19:52   even if, "Hey, my letterpress feature that I suggested to Lauren still isn't in the store,

00:19:58   but you know what?

00:19:59   Maybe someday it will be."

00:20:00   And he wrote me back and said, "Thanks.

00:20:02   I've thought about adding that feature myself, so it's on the list."

00:20:05   And that makes me feel really good about using his apps.

00:20:08   And if he released something new that cost additional money, even if it was the same

00:20:14   basic concept as Letterpress, I probably would buy it just because I feel better about that

00:20:21   experience with the developer.

00:20:22   Great.

00:20:23   Yeah.

00:20:24   I mean, I think definitely there's a -- it's that difference of in a store as large as

00:20:29   the App Store, which I think is up to about almost a million apps now.

00:20:33   It's the nature of what's happening is still the same.

00:20:38   If you want to have a relationship with a customer, you need to find whatever way possible.

00:20:43   There's a lot of difficulties and hurdles in the app store to doing this.

00:20:47   Their relationship is primarily with Apple and we're on the side.

00:20:50   But when we have opportunities to interact with customers, to try as best we can to humanize

00:20:55   that and make it into a personal thing.

00:20:58   I know I've had the same thing, doing support, where you have this funny response where the

00:21:03   first response I get from somebody is very negative and very just sort of

00:21:07   letting off steam and you kind of respond back and it's like oh I'm so

00:21:11   sorry you know here's what I'm doing to fix it here's a workaround for now you

00:21:15   know I'll let you know if I have any updates and then you get a response back

00:21:18   from that it's like oh I'm so sorry and they're embarrassed because they were

00:21:22   yeah it's like they were they thought they were talking to a bot and they

00:21:25   found that they're actually talking to a person and I think that probably has a

00:21:28   big big impact on them because I mean at the end of the day we're all good you

00:21:30   It's like you kind of hope we're all kind of good people trying to think the best of each other.

00:21:34   So, anyway.

00:21:37   Absolutely.

00:21:38   So, I think that's a good place to stop.

00:21:40   I really want to thank you so much for taking the time to do this.

00:21:43   I know it's a bit outside of the norm, but I think it's especially helpful for myself and fellow developers to hear from,

00:21:53   I guess, I think you're aware of this, that says someone who we sort of,

00:21:58   I guess we always refer to it as normals, right?

00:22:02   I think you listened to some of the developer podcasts, right?

00:22:05   So we talk about, it's like, "Oh, it's like there's the us and then there's the normals."

00:22:09   And it's good, I think, to hear from someone who's more of a normal.

00:22:12   So we're not just making assumptions.

00:22:14   They're actually basing some of our thinking on actual real-life data and thoughts.

00:22:22   So I really appreciate you taking the time.

00:22:24   Sure.

00:22:25   I'm happy to present the layman perspective.

00:22:26   Sounds good.

00:22:27   All right.

00:22:28   Thanks.

00:22:29   >> All right. Bye.