Saturday, January 7, 2012

Make it free and figure out the money once you provide value to users

Joel Spolsky and his team @ Fog Creek Software released Trello couple of months ago.
Joel now writes about couple of differences of this endeavour from any other products Fog Creek released before.

Two that resonate the most with my view are "make it free" and "get others to innovate upon the base".

Agreed: if the idea is solid, product drives tons of users, money will show themselves - though of course it doesn't hurt to have a long-term business vision from the get go (as turned out Steve Jobs must have envisioned iTunes model while designing iPod).

Joel writes:
"Trello is free. The friction caused by charging for a product is the biggest impediment to massive growth. In the long run, we think it’s much easier to figure out how to extract a small amount of money out of a large number of users than to extract a large amount of money out of a small number of users. Once you have 100 million users, it’s easy to figure out which of those users are getting the most value out of the product you built. The ones who are getting the most value will be happy to pay you. The others don’t cost much to support.

The API and plug-in architectures are the highest priority. Another way of putting that is:  never build anything in-house if you can expose a basic API and get those high-value users (the ones who are getting the most value out of the platform) to build it for you. On the Trello team, any feature that can be provided by a plug-in must be provided by a plug-in."

Source article: How Trello is different.