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Stop Using the Cup of Coffee vs. $0.99 App Analogy

167 points by Deinos 9y ago

jonathanjaeger 9y ago
Let's also not forget that an app is a digital experience and coffee is a physical one. Plus even if the facts the author wrote were not true, it's just overused at this point anyway.
ambivalents 9y ago
I was expecting this to go in a different direction when I read the headline, which is this: a decision to buy and experience an app does not have a guaranteed ending. The app could easily command more of my attention than I want it to, which--not to get all self-important here--is valued at way more than $0.99. I personally don't buy apps because I feel attention-saturated by the ones I already have. I do buy cups of coffee regularly, though, because I know where they start and end.
- carbocation 9y ago
  I believe they address this in the first major heading, where they say: > Fact: Starbucks Coffee is a Trustable Experience
  - ambivalents 9y ago
    Fair enough. By "different direction" I mean I was surprised by the upshot of the article: just build your apps to be more like the Starbucks model! Not, you know, that many apps are deliberately designed to capture and keep our attention, and it can be hard to discern where an app stands before trying it.
- ghostbrainalpha 9y ago
  I was expecting it to go in a different direction also. But mostly based on the price of coffee. I don't know anyone in my professional/social circle that drinks coffee that costs less than a dollar. I think its time to start equivocating $5.00 purchases with a cup of coffee.
  - freehunter 9y ago
    And even then, saying "this is the cost of a cup of coffee" is basically asking me to give up a cup of coffee to pay for their app. If you break out the whole logic argument, it's saying "I don't want to pay for this app", at which point the value proposition is "you know that money you were about to spend on coffee? Spend it here instead". I know they want to say "look how cheap it is", but what I hear as a budget-oriented person is "if you don't want to spend the money for it, just stop buying something else". My aversion to buying an app isn't how expensive it is, but rather how much I'm going to use it. Stop insinuating that I'm too poor to buy your product. And like you mentioned, coffee is actually pretty expensive. Even at $1, if you drink a cup a day that's $30/mo which is more than the cost of GitHub Enterprise. If it's $5 for a cup and you drink one per day, that's $150/mo which could get me an absolutely massive Digital Ocean droplet. We pay an assload for coffee. Bad comparison. And not to mention coffee is addictive; many people drink it because they feel like they have to, not because they necessarily want to. Comparing your app to coffee is just an awful comparison all around.
georgeecollins 9y ago
This is why free to play, apps that offer premium modes, or apps that have social conversions are good models for a digital store. When there is almost no barrier to entry users have good reason to doubt the value of what they are downloading. Hence they want to try it first or hear strongly from a trusted source that it is valuable.
makecheck 9y ago
If I see something that is both "free" and "in-app purchases", it already greatly reduces the chance I'll even bother to download because so damned many of these are just terrible experiences. On the off chance I bother to look one step further and preview the "top in-app purchases", I usually see something totally unsurprising like the absurd "$9.99 gem bags" or whatever. Please, please just start charging for apps again. I specifically search for "pay once and never again" apps now.
- BoorishBears 9y ago
  The numbers don't agree with your claims
  - Nicksil 9y ago
    What numbers, claims? OP was speaking of personal experience.
    - BoorishBears 9y ago
      > Please, please just start charging for apps again The top grossing apps are all free no matter where you look, if charging for apps was profitable we'd expect to see at least some paid apps right?: https://thinkgaming.com/app-sales-data/ https://thinkgaming.com/app-sales-data/ https://play.google.com/store/apps/collection/topgrossing https://play.google.com/store/apps/collection/topgrossing? hl=en It's well known in app development that not having a free app will seriously hamper your traction. The only apps I've seen get away with it are technical utility apps, and remakes/releases of established games for non-mobile (GTA, FF, RCT, etc.)
  - kerkeslager 9y ago
    The numbers don't oppose his claims either. The numbers support a claim that in-app purchases make more money, but this should not be mistaken for proof that in-app purchases provide a better user experience.
    - 9y ago
qrbLPHiKpiux 9y ago
The app world has really been grinding my gears lately. The move to subscription services is really getting to me. Especially on iOS. I've dropped a lot of money on writing apps - I'm looking at you, Ulysses - to move to a subscription - and eventually lock me in, or lock me out. "At a cost of a coffee a month," you say.
jasode 9y ago
I agree with the author. Although the author didn't mention apps being "digital" as a reason for no sales, others have done so and I commented on that not being a convincing roadblock: https://news.ycombinator.com/item?id=13634892 https://news.ycombinator.com/item?id=13634892
Boothroid 9y ago
I prefer Costa or Nero.
dionidium 9y ago
People who make this comparison wildly underestimate how much I like coffee. It's a lot more than your dumb app, I assure you. In fact, I'll go further. There isn't an app in existence that I'd trade for coffee. Not Facebook or Instagram or anything else on my home screen. Coffee is better than all of them. This comparison could only be made by somebody who doesn't drink coffee.
- GrinningFool 9y ago
  Come to think of it ... of the apps I use regularly, none of them is actually essential to my life. Not like coffee.
- Semiapies 9y ago
  Sure, but it's not coffee, it's one cup of coffee - and you can immediately get another cup for yourself. That said, they still often lose out in that comparison.
whipoodle 9y ago
I don't mind buying something for a dollar and with the knowledge that it might not be that good. Gambling with a dollar is not exactly going to ruin me.
whack 9y ago
The article makes some pretty compelling points, but I think it's underestimating the irrationality in human behavior. It's well known that people's purchasing habits are deeply irrational on many levels - one of which is the idea of anchoring. We've had the idea of $4 coffee prices anchored in our heads, and so, don't think twice about it. Conversely, we've also had the idea of free-apps anchored in our heads, and so, feel deeply averse to spending $1 on it, even when a rational person would conclude that the app's lifetime value (over free alternatives) exceeds 25% of the value provided by a single cup of coffee. There are certainly many rational reasons for why someone wouldn't want to pay a buck for an app, but it's worth pointing out that a significant number of people are irrationally averse as well. http://www.investopedia.com/university/behavioral_finance/behavioral4.asp http://www.investopedia.com/university/behavioral_finance/be...
- daxfohl 9y ago
  Yeah, I can't tell you how many irrational hours I've gone out of my way to avoid toll roads or paid parking, things that "should be" free, even now when I certainly charge many times the rate that any parking garage does.
- cortesoft 9y ago
  I think it is a bit unfair to call anchoring 'irrational'. It is a heuristic for figuring out how much I should pay for something, and it works pretty well for a lot of situations. Sure, it can be exploited by people who know what they are doing, and it can lead us to pay too much sometimes or refuse to pay a fair amount other times, but on the whole it works pretty well.
pacaro 9y ago
I wish the emphasis in TFA was not on "craftmanship", 1) it's a tired metaphor with weird resonances to a male dominated guild structure. 2) even the positive aspects don't really apply to Starbucks which is more fits the "well oiled machine" analogy. If i think of craft coffee, I think of a small (possibly independent) coffee shop where the baristas really know what they are doing 3) I think that customers do care about Quality, but they dont' (en masse) care about craft, your journey is not of typically of interest to them, just your results. The article relies too much on a notion of craft which describes how a product is made, I believe that the consumer cares about the quality which is the result of that journey, only a fraction of customers care about the process.
Markoff 9y ago
bad luck for such developers, i don't drink coffee, neither drink beer actually i can't think of thing i would buy daily which would be waste of money and not essential if the app is useful like launcher or calendar reminders i am willing to pay, but i have trouble to imagine more paid apps i would be willing to pay with great free alternatives
rsp1984 9y ago
I think the article misses the point. If we transfer the app store experience over to the real world who would pay $4 for a cup of coffee at your shop if there were coffee stands on the sidewalk literally every 100 meters offering excellent free coffee for you to grab with some ads printed on the cup. That's about the sort of competition that mobile app developers have to put up with. Starbucks however didn't have that competition when they started out, that's why they could become so big in the first place.
- lukasb 9y ago
  Did ... how could ... I think I need to lie down.
- AceJohnny2 9y ago
  The article actually covers this. Sounds like you missed the point.
- philtar 9y ago
  Free coffee with ads on cups? Could it work as a model?
praptak 9y ago
My coffee spending is naturally capped at a level that is imperceptible to my budget. That's why I feel comfortable blowing the $4 on a cup - without any conscious decision making. That's not the case with apps. I could easily spend a thousand bucks on them in a single day, so I am very careful with every single $.99.
- duxup 9y ago
  http://theoatmeal.com/blog/apps http://theoatmeal.com/blog/apps
- ulucs 9y ago
  I feel the opposite is true for me. For meals and soft drinks, my appetite seems to be infinite so I could really bankrupt myself if I just let it run free. However, there aren't many apps that seem useful to me and just let me buy them. It's subscriptions all the way down. I've bought Wolfram Alpha for about a buck, I've blown 30 bucks on a bachata moves app, but god forbid if anyone offered a run tracking app without a subscription.
ben1040 9y ago
I prefer to apply this analogy to the situation with how users expect updates into perpetuity in exchange for their 99 cents. Developers that try to fund continuous updates through a small annual subscription fee (like Dark Sky on Android, for example) get pilloried for it. You wouldn't pay $4 for a coffee at Starbucks, then come back to the store six months later and say "I paid $4 for this, refill it." But you expect that app you paid a buck for in 2008 to still work in 2017 across 10+ new OS revisions (and one or two major UI paradigm shifts), and the justification for that is "I paid for it once." When you went out and bought boxed software it was kind of an expectation that it was going to work for a reasonable time period afterward. But if you want an update or support for a later OS version that didn't exist at the time of purchase, you're going to pay for it.
- moxious 9y ago
  We're really torturing the metaphor with app updates as coffee refills, buuuuuut.... Many of us are in the software business. So we know how hard the stuff can be. But the customer doesn't, and shouldn't care. I think it's reasonable for the customer to expect updates forever. Particularly because so often, we put out a product that has bugs and problems in it. The customer is sometimes already being fairly accepting being willing to pay for a product that has problems that are yet to be fixed. The app author also has the ability to release a new app if the features warrant. So no one is forcing the publisher to give new features for free.
  - ben1040 9y ago
    >The app author also has the ability to release a new app if the features warrant. That's easier said than done. You can't really do this without losing your customer base, links to your app in the store, sign-in tokens, etc, and you have to have some mechanism for migrating data out of one app sandbox to the other. Additionally, if you want to be fair and offer an upgrade price, the app stores don't allow this directly. Tweetbot did something clever; they wanted to charge $10 for new users but $5 for upgrades. They put the "old" version and the "new" version in a package deal bundle on the iOS App Store, and priced the bundle at $10. If you had the "old" version already, you got get a discounted upgrade by buying the bundle -- since you already owned one app in the bundle, you got a credit for that towards the full price. The app stores could fix this problem and allow publishers to set upgrade pricing, but they don't.
notyourday 9y ago
Well, considering "Save The <$INSERT-CAUSE-OF-THE-DAY>" charities have been peddling "For the cost of a cup of coffee a day" scams for years rather successfully I would be shocked if it did not work. Of course it may require TV ads.
linkmotif 9y ago
Okay but now how will I confirm my bias?!
tarr11 9y ago
The cost of goods on a cup of Starbucks coffee is substantial (servers, beans, equipment, rent, utilities, cup, creamer) The cost of goods on your $1 app is close to, and perceived to be, zero.
- 0xCMP 9y ago
  If you develop and maintain the app yourself. People hire teams to develop apps all the time and not always for some larger/high-margin business.
  - creatonez 9y ago
    The consumer has no straightfoward way of knowing whether or not an app was developed in one person's free time or 10 people's work time.
- Alacart 9y ago
  I think you could argue up front and ongoing costs for either scenario. The duplication of an app for each install is technically very low cost (although you could say that the app store taking 30% is a cost there), that doesn't mean there weren't large up front costs and ongoing ones as well. What about maintenance, support, infrastructure like servers/services/bandwidth. For anything of a decent size you probably have to do these things, which means you probably need staff, which means you probably need an office, benefits, insurance, all the usual business costs. That's not even bringing up the constant updates, new features, and supporting the ever changing platform or environment it runs on, which is all completely expected by users. Apps are as much of a regular business as anything else, not some magic special case.
- sinatra 9y ago
  Why is customer acquisition cost (which can be many $s) not considered part of the cost of the app if it's considered part of the cost of Starbucks (through rent)? Why is Starbucks server a cost, but your app's developer isn't? Why is Starbucks equipment a cost, but app's infrastructure isn't?
  - 9y ago
redditmigrant 9y ago
This is a survivorship bias article. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps" People drop $4 on coffee at new coffee places/restaurants all the time, so that whole I trust this experience thing is really not valid when you think about it a little further than your morning Starbucks. - "Fact: Starbucks Has No Free Alternative" - This can be interpreted to say that maybe more apps should be $0.99, so that users get used to paying for the apps. I dont think anyone would question the $0.99 price for apps if thats how it was from the beginning. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps". This is because the prevalence of free apps has trained developers that people wont pay for apps. So new/creative ways of making money is most likely a result of there not being a way to make money by selling the app itself. Another way to look at it is, because you cant make money just selling the app, the only people who survive are people who can find other ways of making money. If the expectations was for apps to be paid, maybe more people would make apps and we would see a whole different world of apps. I realize that its hard to change consumer habits, so free is likely to be the dominant distribution model. But its important to distinguish that the current reality might not be the best alternative.
- Endy 9y ago
  They're not really correct that Starbucks has no free alternative. However, this depends on several understandings. The first for me is a sort of A=A mindset, that coffee=coffee regardless of all else. Assuming for the moment ground coffee rather than whole-bean or instant, I can get over a month's supply for about 5 bucks. It's not "free", but it's $60 a year for a pot of coffee per day. On top of that, if I don't want to make my own coffee, a $1 coffee mug allows me to get refills at 7-11. And I can get coffee at the food bank reliably. While you might argue that I'm discounting the cost of the water and electricity, I'd argue that instead we're talking about the same issue as the cost of the phone. I have a $20 phone which works well for me. But any purchase in the Play Store is getting judged against that $20 value; if the phone were worth more there'd be no hope of an app significantly increasing the value of the phone. There's no app I really need that's not free (or OEM like phone, text, memo, camera, ebook reader). The few that I do want or which I might need? I can get that function working in a browser.
cybernytrix 9y ago
> Starbucks coffee is a trustable experience I stopped reading after that...
- cn889 9y ago
  Well, usually it is reliably the worst coffee in any given city. So the experience does have a certain continuity.
danso 9y ago
I think this essay touches on something that is obvious yet feels frequently overlooked: time is valuable/money. And apps, unlike coffee, suck up your time. It's not that 99 cents is expensive. It's that if 1 hour of my time is worth $50, and a 99 cent app wastes 1 hour of time, I'm out $50.99. The low price tag is itself a disincentive because experience has taught me that it's very rare to find something indisputably worth $9.99 that has been valued (by its own creator!) for 99 cents. And as a technical issue, if you were to pick up apps because they were free or cheap, you'd subject yourself to cognitive overload, even if you never even opened those apps and wasted time on them. Nothing is ever free, and even if Starbucks/Peet's is a bit overpriced, at least I know what I'm committed to (barring an unexpected discovery that coffee is much more harmful than previously thought).
MediumD 9y ago
I think there is another piece to this. Buying a cup of coffee means I get a cup of coffee. Buying your $0.99 app means I have the right to trade my time for whatever your app provides. The reason I don't buy apps is because I don't have the time to spend on your app, not because I think the $1 is strictly more valuable elsewhere.
gnicholas 9y ago
> Is There Hope for the Paid App? Sure there is. Just do what Starbucks does: • Build an app experience that’s unique and doesn’t feel “easily replicated” • Provide something the user sees as valuable to their daily life • Package it such that it shows off its craftsmanship Find creative ways to profit off of a “free” version (Starbucks doesn’t do this…. yet) • Quit complaining about money wasted on cups of coffee Don't forget the part about spending millions on advertising, so that people know what your product is.
petraeus 9y ago
The best model would be to have an app that slowly unlocks more functionality based off off TOTAL revenue, so the whales effectively unlock content for the non-spenders.
brownbat 9y ago
I have fond memories of freeware and postcardware from a few decades back. In contrast, I'm rarely impressed with either free or paid apps. The most solid apps I use just promote or expand another primary product. They're made as an adjunct by a company with a different revenue stream. I don't know if it's walled gardens or the ease of payment that drives the shift. I'm glad people can get paid for good work, but I worry we lost something. On the other hand, maybe it's just nostalgia taking. I wish I could find all the old astronomy simulators and games I found on BBSs, see if any of them actually hold up. Maybe software overall has gotten so much better I just raised my standards.
em3rgent0rdr 9y ago
These arguments work against paying for music too!
Grustaf 9y ago
I don't think it's supposed to be an analogy, the point is just to illustrate that 1 dollar is a very small amount of money and you shouldn't hesitate to spend it on an app.
wutbrodo 9y ago
> Last week I bought a game for 99 cents and it was terrible. I played it once, for 15 seconds. I could be shoving $1 straight down the toilet again for all I know. Your app, good sir, is a total gamble. Sure, it’s only a $1 gamble… but it’s a gamble and that fact matters more than any price you might place on it. Haven't the ability to return apps been around for like, 6-7 years? EDIT: I see downthread that this has apparently changed
Waterluvian 9y ago
We need to introduce a system called "macropayments" where you pay once for a complete product and they leave you alone afterward.

167 points by Deinos 9y ago

Let's also not forget that an app is a digital experience and coffee is a physical one. Plus even if the facts the author wrote were not true, it's just overused at this point anyway.

ambivalents 9y ago

I was expecting this to go in a different direction when I read the headline, which is this: a decision to buy and experience an app does not have a guaranteed ending. The app could easily command more of my attention than I want it to, which--not to get all self-important here--is valued at way more than $0.99. I personally don't buy apps because I feel attention-saturated by the ones I already have. I do buy cups of coffee regularly, though, because I know where they start and end.

carbocation 9y ago
I believe they address this in the first major heading, where they say: > Fact: Starbucks Coffee is a Trustable Experience
- ambivalents 9y ago
  Fair enough. By "different direction" I mean I was surprised by the upshot of the article: just build your apps to be more like the Starbucks model! Not, you know, that many apps are deliberately designed to capture and keep our attention, and it can be hard to discern where an app stands before trying it.
ghostbrainalpha 9y ago
I was expecting it to go in a different direction also. But mostly based on the price of coffee. I don't know anyone in my professional/social circle that drinks coffee that costs less than a dollar. I think its time to start equivocating $5.00 purchases with a cup of coffee.
- freehunter 9y ago
  And even then, saying "this is the cost of a cup of coffee" is basically asking me to give up a cup of coffee to pay for their app. If you break out the whole logic argument, it's saying "I don't want to pay for this app", at which point the value proposition is "you know that money you were about to spend on coffee? Spend it here instead". I know they want to say "look how cheap it is", but what I hear as a budget-oriented person is "if you don't want to spend the money for it, just stop buying something else". My aversion to buying an app isn't how expensive it is, but rather how much I'm going to use it. Stop insinuating that I'm too poor to buy your product. And like you mentioned, coffee is actually pretty expensive. Even at $1, if you drink a cup a day that's $30/mo which is more than the cost of GitHub Enterprise. If it's $5 for a cup and you drink one per day, that's $150/mo which could get me an absolutely massive Digital Ocean droplet. We pay an assload for coffee. Bad comparison. And not to mention coffee is addictive; many people drink it because they feel like they have to, not because they necessarily want to. Comparing your app to coffee is just an awful comparison all around.

georgeecollins 9y ago

This is why free to play, apps that offer premium modes, or apps that have social conversions are good models for a digital store. When there is almost no barrier to entry users have good reason to doubt the value of what they are downloading. Hence they want to try it first or hear strongly from a trusted source that it is valuable.

makecheck 9y ago

If I see something that is both "free" and "in-app purchases", it already greatly reduces the chance I'll even bother to download because so damned many of these are just terrible experiences. On the off chance I bother to look one step further and preview the "top in-app purchases", I usually see something totally unsurprising like the absurd "$9.99 gem bags" or whatever. Please, please just start charging for apps again. I specifically search for "pay once and never again" apps now.

BoorishBears 9y ago
The numbers don't agree with your claims
- Nicksil 9y ago
  What numbers, claims? OP was speaking of personal experience.
  - BoorishBears 9y ago
    > Please, please just start charging for apps again The top grossing apps are all free no matter where you look, if charging for apps was profitable we'd expect to see at least some paid apps right?: https://thinkgaming.com/app-sales-data/ https://thinkgaming.com/app-sales-data/ https://play.google.com/store/apps/collection/topgrossing https://play.google.com/store/apps/collection/topgrossing? hl=en It's well known in app development that not having a free app will seriously hamper your traction. The only apps I've seen get away with it are technical utility apps, and remakes/releases of established games for non-mobile (GTA, FF, RCT, etc.)
- kerkeslager 9y ago
  The numbers don't oppose his claims either. The numbers support a claim that in-app purchases make more money, but this should not be mistaken for proof that in-app purchases provide a better user experience.
  - 9y ago

qrbLPHiKpiux 9y ago

The app world has really been grinding my gears lately. The move to subscription services is really getting to me. Especially on iOS. I've dropped a lot of money on writing apps - I'm looking at you, Ulysses - to move to a subscription - and eventually lock me in, or lock me out. "At a cost of a coffee a month," you say.

jasode 9y ago

I agree with the author. Although the author didn't mention apps being "digital" as a reason for no sales, others have done so and I commented on that not being a convincing roadblock: https://news.ycombinator.com/item?id=13634892 https://news.ycombinator.com/item?id=13634892

Boothroid 9y ago

I prefer Costa or Nero.

dionidium 9y ago

People who make this comparison wildly underestimate how much I like coffee. It's a lot more than your dumb app, I assure you. In fact, I'll go further. There isn't an app in existence that I'd trade for coffee. Not Facebook or Instagram or anything else on my home screen. Coffee is better than all of them. This comparison could only be made by somebody who doesn't drink coffee.

GrinningFool 9y ago
Come to think of it ... of the apps I use regularly, none of them is actually essential to my life. Not like coffee.
Semiapies 9y ago
Sure, but it's not coffee, it's one cup of coffee - and you can immediately get another cup for yourself. That said, they still often lose out in that comparison.

whipoodle 9y ago

I don't mind buying something for a dollar and with the knowledge that it might not be that good. Gambling with a dollar is not exactly going to ruin me.

whack 9y ago

The article makes some pretty compelling points, but I think it's underestimating the irrationality in human behavior. It's well known that people's purchasing habits are deeply irrational on many levels - one of which is the idea of anchoring. We've had the idea of $4 coffee prices anchored in our heads, and so, don't think twice about it. Conversely, we've also had the idea of free-apps anchored in our heads, and so, feel deeply averse to spending $1 on it, even when a rational person would conclude that the app's lifetime value (over free alternatives) exceeds 25% of the value provided by a single cup of coffee. There are certainly many rational reasons for why someone wouldn't want to pay a buck for an app, but it's worth pointing out that a significant number of people are irrationally averse as well. http://www.investopedia.com/university/behavioral_finance/behavioral4.asp http://www.investopedia.com/university/behavioral_finance/be...

daxfohl 9y ago
Yeah, I can't tell you how many irrational hours I've gone out of my way to avoid toll roads or paid parking, things that "should be" free, even now when I certainly charge many times the rate that any parking garage does.
cortesoft 9y ago
I think it is a bit unfair to call anchoring 'irrational'. It is a heuristic for figuring out how much I should pay for something, and it works pretty well for a lot of situations. Sure, it can be exploited by people who know what they are doing, and it can lead us to pay too much sometimes or refuse to pay a fair amount other times, but on the whole it works pretty well.

pacaro 9y ago

I wish the emphasis in TFA was not on "craftmanship", 1) it's a tired metaphor with weird resonances to a male dominated guild structure. 2) even the positive aspects don't really apply to Starbucks which is more fits the "well oiled machine" analogy. If i think of craft coffee, I think of a small (possibly independent) coffee shop where the baristas really know what they are doing 3) I think that customers do care about Quality, but they dont' (en masse) care about craft, your journey is not of typically of interest to them, just your results. The article relies too much on a notion of craft which describes how a product is made, I believe that the consumer cares about the quality which is the result of that journey, only a fraction of customers care about the process.

Markoff 9y ago

bad luck for such developers, i don't drink coffee, neither drink beer actually i can't think of thing i would buy daily which would be waste of money and not essential if the app is useful like launcher or calendar reminders i am willing to pay, but i have trouble to imagine more paid apps i would be willing to pay with great free alternatives

rsp1984 9y ago

I think the article misses the point. If we transfer the app store experience over to the real world who would pay $4 for a cup of coffee at your shop if there were coffee stands on the sidewalk literally every 100 meters offering excellent free coffee for you to grab with some ads printed on the cup. That's about the sort of competition that mobile app developers have to put up with. Starbucks however didn't have that competition when they started out, that's why they could become so big in the first place.

lukasb 9y ago
Did ... how could ... I think I need to lie down.
AceJohnny2 9y ago
The article actually covers this. Sounds like you missed the point.
philtar 9y ago
Free coffee with ads on cups? Could it work as a model?

praptak 9y ago

My coffee spending is naturally capped at a level that is imperceptible to my budget. That's why I feel comfortable blowing the $4 on a cup - without any conscious decision making. That's not the case with apps. I could easily spend a thousand bucks on them in a single day, so I am very careful with every single $.99.

duxup 9y ago
http://theoatmeal.com/blog/apps http://theoatmeal.com/blog/apps
ulucs 9y ago
I feel the opposite is true for me. For meals and soft drinks, my appetite seems to be infinite so I could really bankrupt myself if I just let it run free. However, there aren't many apps that seem useful to me and just let me buy them. It's subscriptions all the way down. I've bought Wolfram Alpha for about a buck, I've blown 30 bucks on a bachata moves app, but god forbid if anyone offered a run tracking app without a subscription.

ben1040 9y ago

I prefer to apply this analogy to the situation with how users expect updates into perpetuity in exchange for their 99 cents. Developers that try to fund continuous updates through a small annual subscription fee (like Dark Sky on Android, for example) get pilloried for it. You wouldn't pay $4 for a coffee at Starbucks, then come back to the store six months later and say "I paid $4 for this, refill it." But you expect that app you paid a buck for in 2008 to still work in 2017 across 10+ new OS revisions (and one or two major UI paradigm shifts), and the justification for that is "I paid for it once." When you went out and bought boxed software it was kind of an expectation that it was going to work for a reasonable time period afterward. But if you want an update or support for a later OS version that didn't exist at the time of purchase, you're going to pay for it.

moxious 9y ago
We're really torturing the metaphor with app updates as coffee refills, buuuuuut.... Many of us are in the software business. So we know how hard the stuff can be. But the customer doesn't, and shouldn't care. I think it's reasonable for the customer to expect updates forever. Particularly because so often, we put out a product that has bugs and problems in it. The customer is sometimes already being fairly accepting being willing to pay for a product that has problems that are yet to be fixed. The app author also has the ability to release a new app if the features warrant. So no one is forcing the publisher to give new features for free.
- ben1040 9y ago
  >The app author also has the ability to release a new app if the features warrant. That's easier said than done. You can't really do this without losing your customer base, links to your app in the store, sign-in tokens, etc, and you have to have some mechanism for migrating data out of one app sandbox to the other. Additionally, if you want to be fair and offer an upgrade price, the app stores don't allow this directly. Tweetbot did something clever; they wanted to charge $10 for new users but $5 for upgrades. They put the "old" version and the "new" version in a package deal bundle on the iOS App Store, and priced the bundle at $10. If you had the "old" version already, you got get a discounted upgrade by buying the bundle -- since you already owned one app in the bundle, you got a credit for that towards the full price. The app stores could fix this problem and allow publishers to set upgrade pricing, but they don't.

notyourday 9y ago

Well, considering "Save The <$INSERT-CAUSE-OF-THE-DAY>" charities have been peddling "For the cost of a cup of coffee a day" scams for years rather successfully I would be shocked if it did not work. Of course it may require TV ads.

linkmotif 9y ago

Okay but now how will I confirm my bias?!

tarr11 9y ago

The cost of goods on a cup of Starbucks coffee is substantial (servers, beans, equipment, rent, utilities, cup, creamer) The cost of goods on your $1 app is close to, and perceived to be, zero.

0xCMP 9y ago
If you develop and maintain the app yourself. People hire teams to develop apps all the time and not always for some larger/high-margin business.
- creatonez 9y ago
  The consumer has no straightfoward way of knowing whether or not an app was developed in one person's free time or 10 people's work time.
Alacart 9y ago
I think you could argue up front and ongoing costs for either scenario. The duplication of an app for each install is technically very low cost (although you could say that the app store taking 30% is a cost there), that doesn't mean there weren't large up front costs and ongoing ones as well. What about maintenance, support, infrastructure like servers/services/bandwidth. For anything of a decent size you probably have to do these things, which means you probably need staff, which means you probably need an office, benefits, insurance, all the usual business costs. That's not even bringing up the constant updates, new features, and supporting the ever changing platform or environment it runs on, which is all completely expected by users. Apps are as much of a regular business as anything else, not some magic special case.
sinatra 9y ago
Why is customer acquisition cost (which can be many $s) not considered part of the cost of the app if it's considered part of the cost of Starbucks (through rent)? Why is Starbucks server a cost, but your app's developer isn't? Why is Starbucks equipment a cost, but app's infrastructure isn't?
- 9y ago

redditmigrant 9y ago

This is a survivorship bias article. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps" People drop $4 on coffee at new coffee places/restaurants all the time, so that whole I trust this experience thing is really not valid when you think about it a little further than your morning Starbucks. - "Fact: Starbucks Has No Free Alternative" - This can be interpreted to say that maybe more apps should be $0.99, so that users get used to paying for the apps. I dont think anyone would question the $0.99 price for apps if thats how it was from the beginning. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps". This is because the prevalence of free apps has trained developers that people wont pay for apps. So new/creative ways of making money is most likely a result of there not being a way to make money by selling the app itself. Another way to look at it is, because you cant make money just selling the app, the only people who survive are people who can find other ways of making money. If the expectations was for apps to be paid, maybe more people would make apps and we would see a whole different world of apps. I realize that its hard to change consumer habits, so free is likely to be the dominant distribution model. But its important to distinguish that the current reality might not be the best alternative.

Endy 9y ago
They're not really correct that Starbucks has no free alternative. However, this depends on several understandings. The first for me is a sort of A=A mindset, that coffee=coffee regardless of all else. Assuming for the moment ground coffee rather than whole-bean or instant, I can get over a month's supply for about 5 bucks. It's not "free", but it's $60 a year for a pot of coffee per day. On top of that, if I don't want to make my own coffee, a $1 coffee mug allows me to get refills at 7-11. And I can get coffee at the food bank reliably. While you might argue that I'm discounting the cost of the water and electricity, I'd argue that instead we're talking about the same issue as the cost of the phone. I have a $20 phone which works well for me. But any purchase in the Play Store is getting judged against that $20 value; if the phone were worth more there'd be no hope of an app significantly increasing the value of the phone. There's no app I really need that's not free (or OEM like phone, text, memo, camera, ebook reader). The few that I do want or which I might need? I can get that function working in a browser.

cybernytrix 9y ago

> Starbucks coffee is a trustable experience I stopped reading after that...

cn889 9y ago
Well, usually it is reliably the worst coffee in any given city. So the experience does have a certain continuity.

danso 9y ago

I think this essay touches on something that is obvious yet feels frequently overlooked: time is valuable/money. And apps, unlike coffee, suck up your time. It's not that 99 cents is expensive. It's that if 1 hour of my time is worth $50, and a 99 cent app wastes 1 hour of time, I'm out $50.99. The low price tag is itself a disincentive because experience has taught me that it's very rare to find something indisputably worth $9.99 that has been valued (by its own creator!) for 99 cents. And as a technical issue, if you were to pick up apps because they were free or cheap, you'd subject yourself to cognitive overload, even if you never even opened those apps and wasted time on them. Nothing is ever free, and even if Starbucks/Peet's is a bit overpriced, at least I know what I'm committed to (barring an unexpected discovery that coffee is much more harmful than previously thought).

MediumD 9y ago

I think there is another piece to this. Buying a cup of coffee means I get a cup of coffee. Buying your $0.99 app means I have the right to trade my time for whatever your app provides. The reason I don't buy apps is because I don't have the time to spend on your app, not because I think the $1 is strictly more valuable elsewhere.

gnicholas 9y ago

> Is There Hope for the Paid App? Sure there is. Just do what Starbucks does: • Build an app experience that’s unique and doesn’t feel “easily replicated” • Provide something the user sees as valuable to their daily life • Package it such that it shows off its craftsmanship Find creative ways to profit off of a “free” version (Starbucks doesn’t do this…. yet) • Quit complaining about money wasted on cups of coffee Don't forget the part about spending millions on advertising, so that people know what your product is.

petraeus 9y ago

The best model would be to have an app that slowly unlocks more functionality based off off TOTAL revenue, so the whales effectively unlock content for the non-spenders.

brownbat 9y ago

I have fond memories of freeware and postcardware from a few decades back. In contrast, I'm rarely impressed with either free or paid apps. The most solid apps I use just promote or expand another primary product. They're made as an adjunct by a company with a different revenue stream. I don't know if it's walled gardens or the ease of payment that drives the shift. I'm glad people can get paid for good work, but I worry we lost something. On the other hand, maybe it's just nostalgia taking. I wish I could find all the old astronomy simulators and games I found on BBSs, see if any of them actually hold up. Maybe software overall has gotten so much better I just raised my standards.

em3rgent0rdr 9y ago

These arguments work against paying for music too!

Grustaf 9y ago

I don't think it's supposed to be an analogy, the point is just to illustrate that 1 dollar is a very small amount of money and you shouldn't hesitate to spend it on an app.

wutbrodo 9y ago

> Last week I bought a game for 99 cents and it was terrible. I played it once, for 15 seconds. I could be shoving $1 straight down the toilet again for all I know. Your app, good sir, is a total gamble. Sure, it’s only a $1 gamble… but it’s a gamble and that fact matters more than any price you might place on it. Haven't the ability to return apps been around for like, 6-7 years? EDIT: I see downthread that this has apparently changed

Waterluvian 9y ago

We need to introduce a system called "macropayments" where you pay once for a complete product and they leave you alone afterward.