Daily Archives: 2004-12-17

Software Pricing

Joel Spolsky — in his usual combination of good sense and humor — this week put out Camels and Rubber Duckies which tries to answer the question “How much should I charge for my software?”. As Joel warns up front, you’ll learn a lot more about pricing but still won’t know how much to charge.

In a straightforward path, Joel leads to the idea of segmentation, or charging different customers different prices. Airline tickets are the classic example of such segmentation, but it doesn’t seem to work as well in the software business. Joel includes some good arguments against site licenses and other pricing practices along the way.

Reading this reminded me of Talus Solutions, a company I almost joined back in 1998. Their product/service was providing revenue-optimization software for airlines and the like. The work seemed really interesting, but I decided to go with Palm instead. Talus was eventually bought by Manugistics and I’m not sure they have anyone here in Silicon Valley any more.

Product Ideas

Eric Sink’s latest columns is up on MSDN: Finding a Product Idea for Your Micro-ISV. Eric has been writing a monthly column for MSDN from the perspective of an independent software vendor. He started using the term “Micro-ISV” to mean a software company with just one person.

In this month’s column, he points out among other things that someone beat him to it and register the microisv.com domain name. But, at least a growing community has formed there with some useful information and pointers to other blogs.

The focus this month is finding product ideas for your newly-founded single-person adventure. The emphasis is on brainstorming as many ideas as you can before you dive deeper into your decision process. Also focus on “problems to be solved” rather than technologies per se.

Eric points to the market for add-ons/plug-ins for popular applications as a possible opportunity. Along the lines of solving real users’ problems, he suggests finding popular products and use Google to search for people who are whining about missing features or other problems. A great quote (my emphasis):

The sheer volume of whining on the Internet usually makes it easy to quickly fill your candidate list with add-on product ideas.

I highly recommend reading Eric’s past columns on MSDN. To find the rest, click the “See This in the MSDN Library” link above the column title; the previous columns will be shown on the left.