4 ms·

It's worth what others are willing to pay for it. A good (and time-tested) way of determining this price is to start low and then hike the price up steadily unt

It's worth what others are willing to pay for it. A good (and time-tested) way of determining this price is to start low and then hike the price up steadily until your revenue starts to level off. When you reach this level, this is a decent indicator of how much to charge for your application.

orijing 16y ago
This isn't what the OP is asking about (Correct me if I'm wrong, OP). He's referring to valuation of the project in the sense that Google is worth $200b, not how much to charge customers of the application. As for your strategy for deciding how much to charge (which is a different problem, again), there are two problems I see: 1. Users don't like when prices are gradually being hiked. There are subconscious effects like number-fixation (where people are attached to the first numbers they see), which causes them to perceive future prices as excessive, and there are conscious effects like the disdain of price hikes. 2. This strategy maximizes short-term revenue. There are other considerations which are more important, like profit (revenues minus costs)--with costs that are not purely fixed, maximizing revenue will not maximize how much money you make ultimately. Another consideration is the long term--charging less may cause faster adoption, which may be better for the long term. You never want to be completely myopic in pricing unless you don't think there's a future to your app and you want to extract as much money as possible.
- anujkk 16y ago
  Yeah, right. I'm not asking about pricing strategy for a web based product but how to determine how much my web application is worth if I want to sell it. For example, sites like threewords.me isn't generating any revenue but still it has been sold at some price. How to determine the selling price of such web app?

4 ms·

It's worth what others are willing to pay for it. A good (and time-tested) way of determining this price is to start low and then hike the price up steadily unt

by flyosity 16y ago

orijing 16y ago
This isn't what the OP is asking about (Correct me if I'm wrong, OP). He's referring to valuation of the project in the sense that Google is worth $200b, not how much to charge customers of the application. As for your strategy for deciding how much to charge (which is a different problem, again), there are two problems I see: 1. Users don't like when prices are gradually being hiked. There are subconscious effects like number-fixation (where people are attached to the first numbers they see), which causes them to perceive future prices as excessive, and there are conscious effects like the disdain of price hikes. 2. This strategy maximizes short-term revenue. There are other considerations which are more important, like profit (revenues minus costs)--with costs that are not purely fixed, maximizing revenue will not maximize how much money you make ultimately. Another consideration is the long term--charging less may cause faster adoption, which may be better for the long term. You never want to be completely myopic in pricing unless you don't think there's a future to your app and you want to extract as much money as possible.
- anujkk 16y ago
  Yeah, right. I'm not asking about pricing strategy for a web based product but how to determine how much my web application is worth if I want to sell it. For example, sites like threewords.me isn't generating any revenue but still it has been sold at some price. How to determine the selling price of such web app?