So a few months ago we released our CAB Installer SDK, and we decided to try out value-based pricing as a social experiment. Our thinking was that developers make their living – and typically a more comfortable living than flipping burgers – and that the would a) understand the value of code and time saved and b) be willing to compensate us for the SDK based on their perceived value of the product.
We here we are a full four months later, and how is this experiment going? Well here’s a graph that says it all:
What this says is that we’ve sold 51 “value units” to 37 customers, meaning that over 80% of you who bought it only paid $5. Now assuming you’re a low-paid, entry-level guy making only $40k a year that means you felt it’s worth just over 15 minutes of your time (and keep in mind this thing comes with full source code).
What this tells me is that one of these must be the case:
1) The SDK sucks and has no value
2) People don’t understand “value-based” pricing
3) Developers are cheap bastards who will pay as little as possible for something
Well #1 is probably not true, as we’ve used it on a few projects and it works well. I think we descibed value-based pricing pretty clearly, and it’s not a tough concept. So all I can conclude is, well, #3 must be true. Now we can’t really hold it against you, after all we did allow you to buy it for $5 and some people simply have low moral standards. I’m just surprised it’s so many of you.
Will we change the pricing model? Well I have two thoughts on that.
1) the current pricing includes zero support, so it’s no “work” for us to just leave it as-is
2) moving it to fully open source might increase the number of people using it
I’m inclined to go with #1, simply because moving it to open source requires a bit of work on our part. In short, we’ll keep it out there as an apparent $5 product because I’m too busy to do anything else with it, but the likelihood of it getting any additional features is pretty slim. It was an experiment that yielded data, and as such I’d say that it was valuable. It certainly shows that it’s a pricing model that can’t be used to support a business.