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I gladly paid the five dollars. I think mr. Arment is not only a good developer (never had any problems with his service, which makes it ‘good’ in my point of view), he also thinks about choices like these and manages to explain them in a clear fashion.

It’s an interesting read.

What initially I thought was strange (although it makes sense to me now) is that the lion’s share of the complaining, support calls and 1 star reviews comes from the people who have the free version, not the paid version of his app.

So it’s not only the fact that the ad revenue he makes on the free app is much less than that of a paying customer, he also was spending a disproportionate amount of time satisfying their needs.

That’s all very well, but he is ignoring a few things along the way. More people used Instapaper because it was free Because of the large userbase ‘sending to instapaper’ was added to other applications making instapaper more useful for all users. The more integrated it was the more people were interested in it, and seeing the advantage of it. If people are okay using good enough apps (and I think he is right with that assertion), they’d have never looked at a $5 instapaper and went with another free service instead.

Can you say Twitter?

The only argument for free is to get people hooked. You might choose to give a free version for 30 days so that a customer can be sure that it’ll do what they want. I bought the paid version without reservation since it did exactly what I wanted.

In the new dot-boom, people are confused (again) about value. Good products have a price. You deserve to be paid for your good work. Well done!

I like this comment right after your quote..

(This is also a major reason why I have no plans to enter the Android market.)

What initially I thought was strange (although it makes sense to me now) is that the lion’s share of the complaining, support calls and 1 star reviews comes from the people who have the free version, not the paid version of his app.

(This is also a major reason why I have no plans to enter the Android market.)

Being on the cusp of releasing my first app, I love reading Marco’s stuff. He’s a smart dude. And with that article (and some by 37S, particularly Jason’s Time.inc “free” articles and @DHHs “free is not a business model”) it made me switch from offering a free w/ ads app to a free for 30 days app (especially after I figured out a much better way to derive revenue).

@Kadir – I think you’re missing the point. Twitter is a good example of building a user-base, and that’s great, if it’s your goal. But, if your goal is to run a stress free, high margin business that makes money from day dot, serving customers who are pre-qualified (the $5 price disqualifies those who tend to download free apps) and frees you from being at the behest of VC investors, then, Twitter is a poor example (I can’t see a revenue model yet, but then, I’m not a super smart, super wealthy VC). Moreover, Instapaper is a great example of how to do it.

@Matthew

Not sure what “(This is also a major reason why I have no plans to enter the Android market.)” has to do with the comment, could you elaborate?

@Anon,

Nobody buys anything on Android. Obviously, some people do, but it’s insignificant compared to the iOS market. Ditto for the new Blackberry Playbook, the new Nook Store, the Windows Mobile App Store and anything with the words “App” and/or “Store” not running on iOS.

@Kadir,

Actually, Marco on a Build and Analyze podcast stated that he was getting 3 free for every 1 paid app, which he admits is a ridiculously good ratio. And while he makes some money off the ads on the free apps, maintaining two code bases, and dealing with support requests and negative reviews isn’t worth it to him. He also found that after pulling his free app off the market, his paid apps sales didn’t drop.

So I don’t think you can argue that people got hooked on his free app, his convertion rate from free to paid was already incredibly low because for a lot of people felt the free version was “good enough”.

The reality is, for whatever reasons, an iOS user has no problem spending $5 on an app on a whim, which is something every other ecosystem would kill for. I used to build XNA games for the the XBox 360, it’s amazing what the XBox users would expect for $5, they want a 20 hr RPG that looks like it’s straight from BioWare. Yet, on the iPhone, some guy puts a farting app out there and makes 50k in one day.

I know 37s has their opinion on iOS, but at the end of the day, it’s one of the only places a skilled, single developer can make a living running their own company.