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taprun

476 karma · joined December 15, 2013

Trust me, I'm an economist.

http://TapRun.com/contact/

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taprun··on $1,884 to quote 300 words from The New York Times in a book
The authors are "outraged, and have taken to Kickstarter" to pay the fee.

The New York Times will likely continue to charge money for the right to quote when authors continue to pay them.

taprun··on Ask HN: Would you be interested in an open-source Amazon Echo?
No. I don't want to have a device listening to everything I say or do.
taprun··on Ask HN: Anyone making a living off of desktop applications?
Here's a cheat: When you raise your price, you can bundle something else in. That will automatically prevent people from asking "Why am I paying more?" It doesn't even have to be that impressive. Spend an hour and write an extra guide, checklist or something like that. Make sure that it's clear to buyers that this add on is new. Done.
taprun··on Ask HN: Got my first enterprise customer...now what?
It's hard to give specific pricing advice without any information about your product, customer, competition or goals.

Try to figure out how much benefit the company thinks it would derive from your product. That's the absolute ceiling of what you can charge. If the company can earn an extra $1,000 by using it, it's not going to pay $5,000.

Now think how much the company is currently spending to deal with the problem (labor costs, software licenses, etc). This might be a good estimate of the floor for how much you can charge.

It's hard to say without more information, but you'll probably want to think about pricing somewhere in between the ceiling and the floor.

The lower your price, the higher the ROI you can demonstrate and the more likely the sale (usually). Of course, if you price too low, it can make you look non-credible and scuttle a deal. I mean, whom would you rather trust, a neurosurgeon that charges $40,000 per operation or one who charges for $8 per operation?

Unfortunately, I suspect that you've anchored your prices low with the free, $5 and $9 tiers. As such, they'll probably balk at a high price for the app.

You'll need to break your customer's mindset and get him to understand that this new version is delivering a lot more value than your existing plans.

Better yet, you might want to see what you can do to look like you're not even selling something that's at all like your other plans.

Focus on selling more than just the software. Support, updates and guarantees are all things that people pay for.

One key piece of advice I have is to think this through. Supporting one unique customer with a unique product version might cost you a lot more (in terms of time and aggravation) than it is worth. Think about how likely you are to sell similar "private things" to other firms (and what other benefits you might receive from this specific sale) before you decide that it's worth selling in the first place.

BTW, here's a book I wrote about pricing software: http://taprun.com/pricing/

taprun··on How do you ask for a salary negotiation?
There are only two reasons why people get big raises:

* They are friends with the person giving the raises.

* They are perceived as likely to produce significant value in the future for the person doling out the raises, but are in danger of leaving.

taprun··on Ask HN: What do you do in your free time?
I'm editing my fist novel. I'm going to learn how to sail this spring.

Pick something that you haven't done. Try it!

taprun··on Tell HN: Thanks for your support, I finally published my book
Congratulations! Writing a book is one of those things that makes you feel proud even long after it's complete.
taprun··on Ask HN: I've got one user. What's the best way to get more?
Why don't you ask your one user to help you?
taprun··on How would you improve the company you work for?
I'd have them focus on achieving strategic goals.
taprun··on Ask HN: Is there an app that reminds me where I stashed stuff?
Sounds like a spreadsheet would work quite well for this.
taprun··on Ask HN: Pricing/marketing strategies/tactics in large, non-niche market
I would stop thinking about how to split functionality and start thinking about the types of customers that you might attract. Who would use your product? How could one group of customers absorb more value from your product than others? Pricing should always be customer-centric rather than product-centric. Start reading up on "personas" and don't be overly-focused on what other companies charge for now - the market supports both Hondas and Ferraris.

Source: I wrote a book on software pricing, have a blog with 200+ articles on pricing, a video on my homepage with some common pricing pitfalls and various other materials. http://taprun.com

taprun··on Ask HN: How can I stop forgetting “things”?
The movie Memento (about a man without the ability to form new memories) talked about such a system. It works!
taprun··on A bank persuaded Twitter to delete my tweets
I never understood why Twitter is preferred over RSS syndication. When you don't own your medium, you don't control your messages.
taprun··on Ask HN: What was your best passive income in 2015?
I wrote a book on pricing software [1] that sells for $50+ per copy. Not only does it supply me with passive income, but it serves as instant credibility when I introduce myself to people in the field.

[1] http://taprun.com/pricing

taprun··on Ask HN: Can you share your blog? What is your best article?
I maintain a blog on software pricing - http://taprun.com/articles/

The two most popular articles are my guide to content marketing http://taprun.com/content/ and my guide to business strategy http://taprun.com/robot/

taprun··on [dead]
Why would you give customers a 90 - 95% discount on the going rate? You've discovered a less expensive cost structure, so keep quiet and enjoy the income! Pricing so low will risk attracting bottom feeders and scare away folks who are used to paying normal prices.
taprun··on Ask HN: What books will stay relevant for many years to come?
Any book light on specifics (tactics) but heavy on theory (strategy) will age better because it will be less effected by changing circumstances.
taprun··on Ask HN: How to decide on Enterprise pricing
This is a complete over-simplification, but...

I'd start by thinking about how much your product is worth to the company. How much money will it save/make them? Don't just look at the functionality that you provide, but also at risk reduction. Charging based on value is called value pricing ( https://en.wikipedia.org/wiki/Value-based_pricing ). You'll want to charge less than what your customer has to gain (otherwise they won't buy). This is the number you should be working from (using out-of-pocket costs to determine pricing is called time and materials pricing and is a great way to go broke https://en.wikipedia.org/wiki/Time_and_materials).

Your original app pricing has little to do with what you can charge enterprise customers, because the product that you're offering is different. Yes, your old pricing will act as a bit of a psychological anchor, but if they've contacted you for a custom plan, they are probably willing to spend quite a bit.

Source: I write a blog on the subject of product pricing (and wrote a book specifically about software pricing - http://taprun.com/pricing/ ).

taprun··on Ask HN: How can I prepare for PM interview?
I'm guessing the answers to every question is one of the following:

1) I give regular status updates to the PM 2) I communicate problems as early as possible 3) I estimate work based upon past experience with similar tasks 4) I always think not just about estimates but also risk 5) I am constantly looking to provide trade-off suggestions to maximize project ROI

Source: I'm a PM

taprun··on Ask HN: What is your best side project / passive income in 2015?
I'm earning passive income from a book I wrote on how to set a price for your software... http://taprun.com/pricing
taprun··on Ask HN: What are you working on this week?
I built a business strategy robot. Answer a handful of yes/no questions, get actionable advice for free. http://taprun.com/robot/
taprun··on Ask HN: Who will win the ad-blocking fight, long term?
Everyone will win when producers find a better monetization strategy and we get rid of ads entirely. Consumers will pay for things of value. Just look at Netflix for but one example.
taprun··on Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup
If you are going to build it for free, why do you need him? Just build it yourself.
taprun··on Ask HN: How did you set your pricing scheme?
My first piece of advice is to think about your goals. What do you want to optimize for (# of users, short-term liquidity, long term profits, customer churn, etc).

My next piece is to be wary of discounts. Consumers will become accustomed to them and eventually come to demand their continued use (see J. C. Penney is a great example of a company that got burned by this).

One more tip is to think in terms of value. Don't just think about the functionality you provide - think about intangibles too. Do you reduce risk? You can charge for that!

I could probably write a book about this topic. Oh wait, I did! http://taprun.com/pricing

taprun··on Ask HN: What role do you identify as in your occupation?
I'll just throw Patio11's famous rant here: http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...
taprun··on Ask HN: What are the most annoying things in software development?
Sitting in meetings that had nothing to do with me
taprun··on Ask HN: Recommend books for a software developer opening a business
Well, I wrote a book on how to monetize and price software products... http://taprun.com/pricing
taprun··on Ask HN: Can I sign a waiver to not sue and know why I was rejected?
No. A company has nothing to gain in telling you. Doing so would only open itself to risk.
taprun··on To freemium or not to freemium
There are only two big reasons to release a freemium offering. 1) To upsell free users later 2) To use free users as marketing.

I wrote an article on this last month... http://taprun.com/articles/secret-to-freemium-pricing

taprun··on Ask HN: Incentivising maintainable code from freelancers?
There are some metrics that you can certainly require. For instance, a maximum threshold on cyclomatic complexity.

A less rigorous option is that you could require regular drops at which point you look at the code and only agree to buy the next drop if the existing drop meets your need.

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