The App and Play stores have turned out to be exceptionally poor places to run a software product business for most developers. They’re great distribution channels for service makers, like Facebook or Lyft or Basecamp, but they’re terrible places to try to make a living (or better) selling software products.
At a buck or few per app, how could it be otherwise? That type of pricing will work for Angry Birds and a handful of other games, but very poorly for most other types of software products. The scale you need, the sustained influx of new customers, well, it’s a place for mega stars, and people who think they can beat the odds at becoming just that.
That’s why I’ve been discouraging people from chasing dreams of a successful, sustainable software product business by pursuing paid apps. Far better be your odds at succeeding with a service where the app is simply a gateway, not the destination.
Watching users of Tweetbot heckle the team for daring to charge $5 for a 8-month upgrade only reaffirms that belief. It’s a sad sight of entitlement, but at this point also entirely predictable.
Apple and Google both benefit from having apps be as cheap as possible. For Apple, that means people will buy an iPhone more readily when the cost to fill it with software is near nil. For Google, it means app makers have to shove ads into products to make them pay. Win-win-lose.
What’s good for platform makers is often not good for those who build upon it. That’s where the whole picking up pennies in front of a steamroller comes from. Yes, a few may be quick enough to pickup enough pennies to fill a jar, but for most, it’s not a wise trade of risk vs reward.
The hardware engineering and software coordination behind 3D Touch in the iPhone 6S is impressive. It’s such an Apple feature. Executed with exquisite diligence because they control the whole stack. Marvelous.
But you know what, it’s not my favorite feature of the 6S. That honor belongs to the low-tech, behind-the-curve addition of an extra gigabyte of RAM. Something that probably cost Apple just a few extra dollars per phone and almost no engineering prowess. (Compare that to the probably hundreds of millions in revised tooling, advanced development, and more needed for 3D Touch.)
Doubling the RAM means apps aren’t constantly being swapped in and out. Which means switching between them is super fast more of the time. Which in turn makes the whole phone feel much better over the course of a day.
It’s been repeated ad nauseam, but it’s still so hard to internalize for most product people: Speed is a feature.
Usually, it’s one of the most important features. Yet it’s also one of the hardest to get right. Chiefly because every other feature is generally at war with speed. Any excess CPU cycles are quickly captured by new, advanced, and ultimately slowing features. Extra cycles are like a surplus government budget: The constituency is going to have a thousand ideas for how to spend it.
It’s not easy to get this balance just so. You have to be fast at what people want and expect. Being the fastest phone running iOS5 or Window OS isn’t going to get you any business.
Comparing this RAM apple and that 3D Touch orange, though, is also a worthwhile reminder that good product design doesn’t deal in distinct categories. It’s all a fruit salad! Customers just want it to be delicious and nutritious.
Software makers are obsessed with new. And of course we are, that’s our job: making more, newer, better! But as a lot, we’d be well-served to remember this affliction is generally not shared by our users and customers.
Sure, some people love upgrading to the latest version the minute it lands. It’s also a lot easier when it’s a personal device, like an iPhone, where the focus isn’t purely productivity.
But remember all those companies holding on to IE6 for their dear life? That’s the other side of ‘upgrading fun’. Disrupting workflow, processes, and institutional knowledge because the damn fax machine won’t send the important contract until the firmware is upgraded. What possible utility could a firmware upgrade to the fax machine provide that’s worth keeping a document from sending?
It’s ok not to LOVE, LOVE all software
It’s so easy to get self-righteous about IE6 laggards and the fax machine that cries for a firmware upgrade, but they’re two sides of the same coin.
For some of our customers, Basecamp is an appliance. It does the job, and it does it well, but they don’t have to LOVE, LOVE, LOVE IT to be happy customers. I’m at peace with that.
Clearly the person who came up with “sunset” as a euphemism for kicking people off their service was not at peace. Whether the reason was a shiny new version or simply losing interest in maintaining legacy, “sunset” encapsulates all the misconceptions software makers have about why their users upgrade.
It’s not beautiful to lose access to your data. And no, that gobbledegook XML or JSON export doesn’t help anything. It’s not beautiful to have a trusted tool or service ripped from your hands because the maker found it an inconvenience to keep it around. It’s nasty, it’s annoying, and apologizing for ANY INCONVENIENCE THIS MIGHT CAUSE is just a further slap in the face.
No more sunsets at Basecamp, ever
So Basecamp 3 is not going to sunset anything. Not the current version of Basecamp, not the classic, original version of Basecamp. Either of those work well for you? Awesome! Please keep using them until the end of the internet! We’ll make sure they’re fast, secure, and always available.
But, but, but isn’t that expensive? Isn’t that hard? What about security? What about legacy code bases? Yes, what about it? Taking care of customers — even if they’re not interested in upgrading on our schedule — is what we do here. Cost of business, as they say.
At launch, Basecamp 3 is not going to have all the same features as previous versions, so some existing customers may well just want to continue with whatever version they’re on. That’s great! All the new, exciting features will still be there when (or if) they choose to upgrade.
For those existing customers who do want to upgrade, we’re going to roll out the red carpet: Big discount on a new trial, and we’ll store your old Basecamp data in the existing versions for free, forever, as long as you’re a paying customer of the latest.
It’s really not rocket science. People like change on their own schedule, they detest it when forced according to someone else’s. That’s just human nature, and it’s rarely good business to fight it.
Remember the Flip camera? From its premiere in 2006 until the business was sold to Cisco in 2009, the little video recorder was killing it. Lavish praise, booming sales, flying high. And then cell phones got good enough at recording video, and that was the end of that.
If you disregard the acquisition proceeds, was Flip a terrible business? Well, that depends: Were they taking profits along the way?
There’s no natural law that states all products and services must endure forever and always. Some companies are glorious sprints, others are slugging marathons. Both can work, but the former is especially sensitive to making money along the way.
The problem is that everyone thinks they’re going to run a spectacular marathon in technology these days. There’s no amount too great to be invested in future growth, because the future is infinite, and you’d be a fool not to capture as much of that as you possibly can.
But what if the time allotted to your capture looks more like Flip? What if your product is going to have a great, booming run, but not for the next 30 years, just the next five?
Case studies: Dropbox and Evernote
Two companies come to mind when I think of Flip: Evernote and Dropbox. Both have had tremendous success with users, both were seen and perceived themselves as “long-term sure bets”, and both are starting to look a lot less shiny these days.
Both Evernote and Dropbox are facing increasing indifference from customers and competition from simply Good Enough features in someone else’s more complete offering. “You’re a feature, not a product”, as Steve Jobs famously dismissed Dropbox (see The case against Dropbox and Evernote, The First Dead Unicorn for but two deeper analyses).
I bet you that neither heeded the lessons of Flip. I bet you that both thought they were going to be around forever, so no amount of investment in the future would be too great. I bet you that even the mere suggestion that they should be taking profits during their first, seven fat years of prosperity would have been laughed out of the boardrooms.
Don’t put it all on growth
A lot of business administration is about managing risk. Thinking about how things might pan out if you’re not as clever as you think you are, or as lucky forever as you currently seem.
Yes, investing in growth when you got a good thing going is smart. But so is thinking that you might currently be enjoying the very best years of the business, not just “the beginning of an amazing journey”.
The smart choice is making sure you win in both cases. Don’t just keep putting it all on red and rolling. Eventually, everyone’s luck or skill runs out, and then it’s awfully nice if the entire time spent playing wasn’t all for nothing.
Many writers and publishers are freakingout after Apple opened Safari to ad blockers in iOS9. Ad blockers have been around for a long time, but the fear is that this is the move that will take the concept mainstream.
That fear appears well justified. The App Store’s charts have been dominated by ad blockers since the release of iOS9 last week. Currently, the #1 paid app is Crystal, an ad blocker, and so is #3, Purify. Clearly some pent up demand.
Another data point is the following poll from The Verge. It was setup with an almost satirically over-the-top slant, and yet readers pummeled them:
It is difficult to get a man to understand something, when his salary depends on his not understanding it — Upton Sinclair
The prevailing response from the media business to this challenge is hysteria: The World Of Journalism As We Known It Is About To End.
But I think more than a little empathy is in order. The natural response to having your livelihood threatened is universally to FREAK OUT. It doesn’t matter if you’re a French farmer or cabbie or if you’re an internet writer or publisher.
I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone… The investment of hundreds of millions of dollars each year to produce quality programs to theaters and television will surely decline.
Consumers are going to stop going to movie theaters, or they’ll skip over commercials on broadcasts, and the entire industry is doomed! Ring familiar?
Fast forward to 2014: The movie industry just set another revenue record. Despite VHS, despite torrents, despite Chinese bootlegs.
But the movie and TV industry has indeed made great changes since 1982. Customers wanted to enjoy movies and TV shows without commercials. From their home. On demand. And when the industry woke up to the futility of first blaming, then suing their customer base, they found a big market just waiting to pay for their creative output (oh, and the public never did stop going to the cinema either).
Another parallel is the music industry. MP3s and Napster caused similar consternation in the early 2000s (and the cassette player before that). Nobody was going to put out music anymore in this new world of flippant piracy!
Yet here, unlike the movie business, there actually was shrinkage of the overall market. From 2002 to 2014, the US music industry went from $25 billion to $15 billion.
So one story of better than ever results, another story of shrinking results. Such is the nature of business! If you believe that you’re somehow morally entitled to an ever-increasing industry pie, reality is going to be a merciless teacher.
The lesson to take away from disruption, beside that it’s better when it happens to other people, is not “everything is going to turn out as well as today or better”. Rather, it’s that fighting what consumers want is a losing battle. Blaming them or shaming them doesn’t work. Those are merely stalling tactics — a way to cope with the pressure and anxiety of not knowing what tomorrow is going to look like, or whether you’re still going to have the same job you do now.
The sooner you stop fighting the present, the sooner you can get to work on figuring out the future.
People are spending more time reading online than ever. If the written media business can only see a dichotomy between “we must have privacy-invasive trackers along with bandwidth-hogging and overlaying full-size ads” and “death”, they’re just not looking hard enough. But that’s okay: YOU’RE FREAKING OUT. It’ll pass, or at least recede, and you will come to your senses.
The pendulum had swung too far. Publishers had abdicated far too much responsibility for the user experience and privacy concerns of their readers for too long. The ad pushers grabbed that opening and cranked the nasty to 11. There was bound to be a reaction. This is it.
It’s a soothing story to blame Apple, pin them with a motive of treating journalists and publishers like collateral damage in a war against Google. But there’s an easier answer: It’s simply better for Apple’s customers!
(Remember reader mode in Safari? Hiding all the ads, reformatting the text? Same motivation, no complaints from the industry because it still loaded the ads, so even if readers never saw them, they still counted.)
Anyway, the proof is in the App Store chart pudding! Customers are flocking to pay for a solution that restores some sanity to their mobile browsing experience.
You can cry about it, you can stomp your feet, you can call Apple and readers mean names, but the ice cream isn’t going back on top of your cone. Take a few weeks to grieve, then get on with the mission of figuring out how the written word carries on without shoving intrusive ads down readers’ throats.