5 ms·

Going free also makes sense if you want total market dominance. In which case, free is really the only way to go. No it's not. The other way is to make the bes

by revorad 16y ago

Going free also makes sense if you want total market dominance. In which case, free is really the only way to go. No it's not. The other way is to make the best damn product in the market. I hate to give cliched examples, but since we are talking market dominance, see Windows, Adsense and iPod.

damoncali 16y ago
I can see iPod and Adsense, but Windows? Windows won for very, very different reasons. When Windows first appeared, it was far from the best product on the market. It won because it was already everywhere (because of DOS). Microsoft practically invented the "give it away to ensure market dominance" game (Ok, slight hyperbole there). It took the court system to slow them down.
- blacksmythe 16y ago
  I agree. I think it would be almost impossible to introduce a new, non-free OS now since from day 1 it would have to be not only better than Linux and BSD, but significantly better.
- gvb 16y ago
  Agreed. From the point of view of the customer, Windows is free since it is bundled with their computer and cannot be unbundled. (There now are some chinks in that bundling armor, but not much.)
- revorad 16y ago
  What consumer OS on affordable computers (that leaves Macs out) was/is better than Windows? It took the court system to slow them down. That was not for their dominant desktop OS, it was for using their monopoly to push IE and server products. You can call out Microsoft on dodgy anti-competitive behaviour in some respects, but you cannot take away credit for building the solid product that is Windows. Heck, even now after goofing up with Vista, they are back with Windows 7.
  - daleharvey 16y ago
    I much much much prefer desktop linux, I would hesitate to call windows decent, let alone by far the best. Yet I have still found it as much as impossible to buy a computer without windows preinstalled.
    - revorad 16y ago
      I prefer and use linux too, but the typical HN user doesn't represent the consumer market.
    - gnaritas 16y ago
      > I much much much prefer desktop linux So do I, but that Linux didn't exist when Windows became dominant; it came much later.
      - hasenj 16y ago
        and even now, it lacks the beauty of OS X, which is rather unfortunate. I use Xubuntu, and it's the best damn work station I've ever used, but sometimes I wish gtk apps were a bit more beautiful.
  - neild 16y ago
    OS/2.
    - loumf 16y ago
      OS/2 wasn't good enough, unfortunately. It was very expensive at the start -- and then there was OS/2 Warp which was ok, but not compelling. If the world were as web-enabled as it is now, it might have been fine -- the way it was -- you needed all of your software to work, and it didn't. Even Windows 95 wasn't great (especially for programmers) -- it was Windows NT 4.0 that was good enough to use to get work done. It was a combination of being less crashy and having more native software available.
      - 16y ago
wensing 16y ago
Market dominance goes to the best-executed whole product, not the best generic product in isolation of market dynamics. Making the best product is only half the equation. Startups also need a market strategy that works.
lolhn 16y ago
Product doesn't trump all. It's the exception, not the rule, that the best product wins the war. Besides... what is the best product? Is it the most featureful? The simplest? The fastest? The cheapest? The most usable? The most beautiful? The most enviable? The most emotionally satisfying? And even if you know what's best... if people aren't aware of it's existence, or if there are other barriers to them trying it, they might well never accept it. I used to think like you. Then I made some great products. I had much better success when I started thinking about the whole picture, and stopped zeroing in on the product.
raquo 16y ago
Windows was free (preinstalled) for end users since at least 3.0 IIRC. Adsense is essentially free for publishers. Both it and Adsense have huge positive network effects. Not to say that they weren't best products on the market when they got traction, but still.
- revorad 16y ago
  Adsense is essentially free for publishers. That's a strange way to look at it. Publishers are selling space to Google for a cut of the Adsense revenue. Google is selling contextual ads within those spaces to advertisers. What's free in that?
sourc3 16y ago
I really think there is a missing piece of context here. If you are creating the next social application charging for your application would be counterintuitive since you are banking on the number of users. On the other hand if you have an application that actually makes money for someone or saves money (in other words translates to direct dollar amount) you might be better off charging as long as your user base perceives the value they get out of your application as more than what they pay for it. I really think that me-too-free app mentality has to change. Startup founders (especially micro ISVs) need to understand the fact that coming up with a business model is the core of the business not an afterthought.
shadowsun7 16y ago
Not always true, though. History is littered with examples of products that gained traction not because they were better, but because they were free. (See: BIND vs Jeeves, Stanford's Unix vs Berkeley's Unix, Minix vs Linux, Apache vs Microsoft/Netscape) At one point in all these product's lives they were lousier and smaller as compared to their competitors. But they won out because the low barrier to adoption (read: free) drove usage, and from usage, more improvements.
- revorad 16y ago
  Thanks for pointing those out, I hadn't thought of them and can perhaps be accused of survivorship bias. I don't know about the first two examples but isn't Linux actually better than Minix and Apache certainly better than Microsoft? In any case, this is a bit of an unfair comparison because these are examples of open source vs proprietary, not product quality primarily. In the context of the OP's blog post, we are talking about winning in terms of building a profitable business, for which I believe building a good product and selling it is a better strategy than getting popular by giving away a crap product for free. The gist of the matter is that you should be clear what you are selling: * a product * advertising space/lead generation (if you are free) * yourself (acquisition) I see most web startups are going for the second and third options, but it seems it is mostly out of fear and the status quo, not careful consideration of the pros and cons.
  - shadowsun7 16y ago
    > I don't know about the first two examples but isn't Linux actually better than Minix and Apache certainly better than Microsoft? When they first started out, both were lousier, scrappy, free products. > In any case, this is a bit of an unfair comparison because these are examples of open source vs proprietary, not product quality primarily. There is nothing unfair about this comparison. Releasing free products and making money on other things has always been a viable way to compete against bigger, more established players. See: http://www.joelonsoftware.com/articles/fog0000000056.html http://www.joelonsoftware.com/articles/fog0000000056.html
    - 16y ago
njharman 16y ago
Cheap(er) almost always beats better/best when the market is large. Walmart, fast food, webbrowsers. The main way a less cheap product wins a mass market is through massive advertising. Specialized and niche markets are different. I'm not sure what your examples where suppose to illustrate. Both Windows and Adsence rule because of the (practical) monopoly positions of their creators. iPod's only one that may have dominated for being the better product but If google started giving away crappy media players they would quickly out dominate iPods.

by revorad 16y ago

damoncali 16y ago

I can see iPod and Adsense, but Windows? Windows won for very, very different reasons. When Windows first appeared, it was far from the best product on the market. It won because it was already everywhere (because of DOS). Microsoft practically invented the "give it away to ensure market dominance" game (Ok, slight hyperbole there). It took the court system to slow them down.

blacksmythe 16y ago
I agree. I think it would be almost impossible to introduce a new, non-free OS now since from day 1 it would have to be not only better than Linux and BSD, but significantly better.
gvb 16y ago
Agreed. From the point of view of the customer, Windows is free since it is bundled with their computer and cannot be unbundled. (There now are some chinks in that bundling armor, but not much.)
revorad 16y ago
What consumer OS on affordable computers (that leaves Macs out) was/is better than Windows? It took the court system to slow them down. That was not for their dominant desktop OS, it was for using their monopoly to push IE and server products. You can call out Microsoft on dodgy anti-competitive behaviour in some respects, but you cannot take away credit for building the solid product that is Windows. Heck, even now after goofing up with Vista, they are back with Windows 7.
- daleharvey 16y ago
  I much much much prefer desktop linux, I would hesitate to call windows decent, let alone by far the best. Yet I have still found it as much as impossible to buy a computer without windows preinstalled.
  - revorad 16y ago
    I prefer and use linux too, but the typical HN user doesn't represent the consumer market.
  - gnaritas 16y ago
    > I much much much prefer desktop linux So do I, but that Linux didn't exist when Windows became dominant; it came much later.
    - hasenj 16y ago
      and even now, it lacks the beauty of OS X, which is rather unfortunate. I use Xubuntu, and it's the best damn work station I've ever used, but sometimes I wish gtk apps were a bit more beautiful.
- neild 16y ago
  OS/2.
  - loumf 16y ago
    OS/2 wasn't good enough, unfortunately. It was very expensive at the start -- and then there was OS/2 Warp which was ok, but not compelling. If the world were as web-enabled as it is now, it might have been fine -- the way it was -- you needed all of your software to work, and it didn't. Even Windows 95 wasn't great (especially for programmers) -- it was Windows NT 4.0 that was good enough to use to get work done. It was a combination of being less crashy and having more native software available.
    - 16y ago

wensing 16y ago

Market dominance goes to the best-executed whole product, not the best generic product in isolation of market dynamics. Making the best product is only half the equation. Startups also need a market strategy that works.

lolhn 16y ago

Product doesn't trump all. It's the exception, not the rule, that the best product wins the war. Besides... what is the best product? Is it the most featureful? The simplest? The fastest? The cheapest? The most usable? The most beautiful? The most enviable? The most emotionally satisfying? And even if you know what's best... if people aren't aware of it's existence, or if there are other barriers to them trying it, they might well never accept it. I used to think like you. Then I made some great products. I had much better success when I started thinking about the whole picture, and stopped zeroing in on the product.

raquo 16y ago

Windows was free (preinstalled) for end users since at least 3.0 IIRC. Adsense is essentially free for publishers. Both it and Adsense have huge positive network effects. Not to say that they weren't best products on the market when they got traction, but still.

revorad 16y ago
Adsense is essentially free for publishers. That's a strange way to look at it. Publishers are selling space to Google for a cut of the Adsense revenue. Google is selling contextual ads within those spaces to advertisers. What's free in that?

sourc3 16y ago

I really think there is a missing piece of context here. If you are creating the next social application charging for your application would be counterintuitive since you are banking on the number of users. On the other hand if you have an application that actually makes money for someone or saves money (in other words translates to direct dollar amount) you might be better off charging as long as your user base perceives the value they get out of your application as more than what they pay for it. I really think that me-too-free app mentality has to change. Startup founders (especially micro ISVs) need to understand the fact that coming up with a business model is the core of the business not an afterthought.

shadowsun7 16y ago

Not always true, though. History is littered with examples of products that gained traction not because they were better, but because they were free. (See: BIND vs Jeeves, Stanford's Unix vs Berkeley's Unix, Minix vs Linux, Apache vs Microsoft/Netscape) At one point in all these product's lives they were lousier and smaller as compared to their competitors. But they won out because the low barrier to adoption (read: free) drove usage, and from usage, more improvements.

revorad 16y ago
Thanks for pointing those out, I hadn't thought of them and can perhaps be accused of survivorship bias. I don't know about the first two examples but isn't Linux actually better than Minix and Apache certainly better than Microsoft? In any case, this is a bit of an unfair comparison because these are examples of open source vs proprietary, not product quality primarily. In the context of the OP's blog post, we are talking about winning in terms of building a profitable business, for which I believe building a good product and selling it is a better strategy than getting popular by giving away a crap product for free. The gist of the matter is that you should be clear what you are selling: * a product * advertising space/lead generation (if you are free) * yourself (acquisition) I see most web startups are going for the second and third options, but it seems it is mostly out of fear and the status quo, not careful consideration of the pros and cons.
- shadowsun7 16y ago
  > I don't know about the first two examples but isn't Linux actually better than Minix and Apache certainly better than Microsoft? When they first started out, both were lousier, scrappy, free products. > In any case, this is a bit of an unfair comparison because these are examples of open source vs proprietary, not product quality primarily. There is nothing unfair about this comparison. Releasing free products and making money on other things has always been a viable way to compete against bigger, more established players. See: http://www.joelonsoftware.com/articles/fog0000000056.html http://www.joelonsoftware.com/articles/fog0000000056.html
  - 16y ago

njharman 16y ago

Cheap(er) almost always beats better/best when the market is large. Walmart, fast food, webbrowsers. The main way a less cheap product wins a mass market is through massive advertising. Specialized and niche markets are different. I'm not sure what your examples where suppose to illustrate. Both Windows and Adsence rule because of the (practical) monopoly positions of their creators. iPod's only one that may have dominated for being the better product but If google started giving away crappy media players they would quickly out dominate iPods.