There are some very insightful comments on the last post, as expected from Daring Fireball readers. Thankfully, nobody took anything personally, because it was about whether super-cheap bundles are an efficient way of gaining customers, rather than any reflection on MacZOT (or any other bundle / discount) buyers or a particular site.

One theme running through the comments that did make me wonder ran along the lines of “the lack of updates caused me to look elsewhere”. There is the irony there that the extra support work not only delayed the 1.3 release, but put a squeeze on everything else I did.

The striking thing about this complaint though, is that it’s something I’ve also heard quite a lot in support emails regarding a number of Together’s competitors. I admit that I don’t keep tabs on them, because I don’t see the point, but as far as I can tell most of these apps get updated every 3 – 6 months, with bug fix / tweaks released every month or so, just like KIT.

For example, Soukyan writes:

What bothered me was that development seemed to slow to a halt for quite some time. I realize that you were preparing the 2.0 release, but this is the problem with small developers. My license entitles me to 1.x upgrades for free, but the paradigm in software has become, release, upgrades to release.5 at the most, and then do a new release and charge for the upgrade. Whatever the reasoning behind it, I don’t mind, but I do mind when the developer seems to drop off the face of the earth. The tells me that I cannot rely on the software to be maintained for the long term.

It’s when indie developers are quiet that they’re probably working the hardest. I spent almost the entire year working on KIT/Together. Version 1.3 was released within 6 months of the bundle and 2.0 another 9 months later, soon after Leopard was released. That was a longer gap than I’d normally like to have but in the meantime, KIT was updated every month or so all the way up until October, when it was made Leopard-compatible.

Obviously Leopard’s delay, and lack of development in the meantime, impacted everything quite significantly. I started Together when Leopard was supposed to be released in late June (and some rumour sites were adamant it would be April). I opened a lot of bugs about Leopard with Apple, a number of which still haven’t been closed and had to do a lot of work twice, to work around problems.

Indie Mac apps in general have frequent free updates that add features as well as fix bugs (often within days of them being reported), and this is what sets independent developers, whether individuals or small teams, apart from the likes of big companies such as Microsoft or Adobe, who release something huge every two years and nothing in between. Even Apple only manages, at best, annual updates to their applications, with the free, minor updates offering fixes but little in the way of new functionality (one exception being iTunes, but generally this is to support new iPods/iPhone or iTunes Store initiative).

Software development takes a long time and it’s most efficient to bundle changes together. One feature may appear as a bullet point, but take many weeks to design, develop and test. Most new features will impact something else, so the repercussions of even a handful of new features can be mind-boggling. Even a release that takes 2 or 3 months can easily devour another month in support, and for all sorts of reasons.

It’s a real balancing act for developers to come up with a release that has enough in it to satisfy people’s requests, works well, and provides enough features to get the attention of new buyers in a reasonable timeframe. I generally manage to release 2 to 3 such updates a year, alternating between both of my apps, and punctuated by the more regular bug fix releases.

Because indie Mac software is pretty low-priced anyway, and full version upgrades (e.g. 2.0, 3.0) often years apart, it’s important to keep that momentum going. There comes a point though where an upgrade like that won’t cut it and you need to make some pretty large changes, and that’s when it’s time for a major new version.

I guess that in Together’s market, where there is a range of diverse competitors people seem to bounce between, and where people may also use web apps that tend to trickle out smaller changes more frequently, people’s expectations can be very high.

Just over a year ago, I wrote a long post, primarily about my experience placing KIT (now Together) in a super-cheap bundle with MacZOT, and some other stuff that was going on at the time. Having a fairly modest blog readership and seldom any comments, I didn’t know the post would become so popular. That only happened when John Gruber quoted a section of it on Daring Fireball in a piece entitled Pinprick.

The aim of my post was to examine whether the MacZOT promotion had been worthwhile from my perspective as a developer, amongst other things. This issue was one of many that were hot potatoes at the time and thankfully seem irrelevant now. However, I intend to revisit the bundle matter, as I have the final piece of the jigsaw to put in place.

The Story So Far

A quick recap is needed. I had been approached by MacZOT, through a friend, to include KIT in a bundle, having recently re-launched the app after an 18-month break (due to the overwhelming popularity of my other app, Feeder). The StoryZOT promotion was a week-long mystery bundle of three applications to be identified on the final day. These were rooSwitch from roobasoft (which won an Apple Design Award at this year’s WWDC), hawkeye from nito and my own KIT. Purchased together, these three apps would normally have cost $69.85, but the bundle was priced at just $5.95.

That price should make it obvious that the point is not so much to make lots of money from the bundle itself, but to use the promotion as a way to gain exposure for the applications involved; to put them on the map, as it were. Regular sales should improve as a result of increased coverage and recognition. Many such bundle deals had been run over the course of that year, so one would presume they were successful.

In total, 1536 bundles were sold and I was paid a flat fee of around $1000 (I’m converting from British Pounds), roughly 65 cents per copy. The developers negotiated their terms individually, so I cannot say how much of each $5.95 sale went to them, but I understand my payment was typical.

KIT (including its successor, Together) is one of those applications that gets a lot of feedback, partly because its scope is broad but also because its users are enthusiastic. It took around 6 weeks to clear the feedback aftermath from MacZOT and the whole experience had devoured some two months of my time. As I said in the original post, regular sales of KIT remained constant. The objective, to gain exposure and thus increase sales, failed. In fact, sales only rose some 6 months later, when I released version 1.3 as part of its normal revision cycle.

Having gained nothing in material terms, the final argument in favour of massively cheap bundles was that it’s an investment of sorts. While not all users will stick with the application, many will potentially upgrade in the future.

KIT 1.2 was pretty fresh at the time, being one month old. I didn’t go into MacZOT with the mindset of finding future upgraders, as a paid upgrade was a long way off. I continued with my original plans, released KIT 1.3 and set about developing the 2.0 version for Leopard, which I renamed to Together.

One Year Later…

I released that last month, some 14 months after the StoryZOT. Together’s reception exceeded my expectations. I am always pessimistically optimistic about major releases; no wild sales projections, but vaguely confident that it’ll be worth my time. I had worked hard to prioritise the most-wanted feature requests and combine those with my own original ideas to create what I hoped would be an application with broad appeal that lost none of KIT’s original purpose or simplicity.

Having put the best part of this year into that version it is a relief that every user I’ve heard from tells me that even if it’s not perfect, it’s a very capable application and a compelling upgrade. The only irresolvable complaints have come from a couple of individuals upset that Together is a Leopard-only application. And on that subject, it’s important to consider that Leopard is not even two months old, which impacts sales figures somewhat.

I don’t collect data about which versions of Mac OS X my apps are running on, but on Dec 15th (the one month milestone), Omni Group’s statistics shows that Leopard accounts for 21% of their user base and Adium’s Sparkle+ statistics shows 25% of users on Leopard. If Leopard follows the trend of previous versions shown on Omni’s site, within 6 months around 90% of users will have moved to the new OS.

As I said, Together exceeded my expectations. Some 23% of KIT users that originally paid full-price have upgraded to Together 2.0 in the month since its launch on November 15. That 23% is pretty impressive considering it matches the number of users on Leopard, according to the mean average of the above statistics. I thought upgrades wouldn’t reach the 20% mark for a few months, due to the various factors involved.

The answer to the ultimate question is 0.65104167 2.669270834. That is the percentage of MacZOT users that have upgraded to Together in the month since its release. To put it another way, that’s 10 41 sales (at $14.95 each) out of the 1,536 total. It’s a small percentage, but I am grateful for every single one. I actually know a lot of my users by name and recognise many of these as enthusiastic KIT users.

The total made as a result of the bundle deal so far, before fees, is around $1150 $1613. One could argue that this is money I wouldn’t have earned otherwise, but it doesn’t exactly cover those two months of work. That time could have been used to produce the 1.3 version (that actually did increase sales) much sooner. This situation also snowballs, because the longer an app does not have a certain feature, the more you hear about it.

Some Things Work

MacZOT hasn’t run one of those super-cheap bundles for a while and they are a world apart from their regular promotions or the kind that MacUpdate runs on a daily basis, offering around 40% off where the developer receives the majority percentage of each discounted sale. I did one of those with KIT on MacUpdate’s Promo back in May and was happy with the results. Mind, that came about because KIT had been voted for by MacUpdate users who wanted to see it featured, so it’s not like they didn’t know about it already.

Likewise, MacSanta’s no-nonsense (and no middle-man) discounts and other well-priced promotions, where users can see what they’re getting and developers receive a fair cut of sales, can be an excellent way for buyers of software to save money while developers to make a little extra and gain some exposure for their applications. I actually made more from the main day of MacSanta with the 20% discount than I did from that week-long StoryZOT, with no noticeable increase in support emails. Give Good Food to your Mac has been fine too.

As for the super-cheap mystery bundles, a little arithmetic will show they are certainly good for the promoters. Judging by the upgrade figures, one has to wonder if they are any good for those who buy the bundles, but at least the outlay is minimal. As for whether these sorts of promotions are good for developers, even in the long run, based on this particular experience I really don’t think that is the case.

Update: Oops, I messed up a bit. I noticed this when zenrain posted a comment below and I didn’t see his name on the list. The actual figure is 41 (or 2.67%) not 10. Still poor, but not as dire. I’ve updated the above accordingly. Sorry about that.

(Technical explanation: turns out some records on the database had trailing whitespace/newlines, which caused them not to match, I ran the query again and double-checked with text files and grep).

The European software promotion, Give Good Food to your Mac, has been extended by one week and will now run until the end of Saturday, December 15.

There are a couple of reasons for this. Firstly, there were a few problems when the promotion started, due to the load on the site’s dedicated server and its impact on integration with PayPal. Those problems were quickly rectified by moving to a cluster of servers and some other measures, but it took Aquafadas longer to set up a non-PayPal credit card payment system.

It turns out that PayPal’s reputation varies from country to country. While many people regard PayPal as a much safer option, because your credit card details are never revealed, buyers from some countries refuse to use the service outright.

Secondly, it’s only in the last few days that the underlying ambitions of the site have begun to be been realised. These aims have not been made clear in a lot of places and that’s because they are uninteresting to anyone but developers, but I think they’re worth mentioning here.

The intention was for the bigger European developers to help the smaller ones gain more attention. According to Claudia from Aquafadas, indie Mac developers don’t get nearly as much exposure in Europe as they do in the US, despite creating some pretty cool stuff. Hence the Euro-centric event. Aquafadas are taking a small percentage to cover their costs, the majority of each sale goes directly to the developers.

In trying to organise this event, Aquafadas noticed the second problem here, in that many European developers didn’t know each other or were unaware that the developer of an app was European, and as such didn’t know how to help each other. The omission of a number of European developers from the promotion was caused by this problem. Claudia found many of the developers involved by trawling sites like Apple’s Downloads. I’ve passed on the names of quite a few British and European developers that I know, and I’m sure others have done the same.

Aquafadas understand what I have written about here before, that the vast majority of Mac users are not involved in the online Mac community of news sites and blogs. To reach these people, more conventional means are required. It’s only during the last week or so that the site has been featured in European magazines and national press, so extending the promotion will mean that readers of those publications will have the chance to try it out.

And if you haven’t checked it out yet, it’s worth a look. There’s some great stuff there, including Pixelmator, CSSEdit and Aquafadas’s brand new BannerZest, which I think is pretty cool. The way the discount works, it’s actually difficult to spend too much money. You often find the total goes down when you add a new app.

A couple of weeks ago, the dollar-pound exchange rate breached the psychological $2 barrier and I had to revisit my thinking on whether to continue pricing my products in the US dollar or to move to another currency, namely the euro.

Meanwhile, some people did move – Martin Pilkington of M Cubed Software announced their move to the euro straight away, closely followed by Rory Prior of Think Mac and a debate ignited on the MacSB mailing list that I’m not sure reached any definite conclusions and left me none the wiser.

I stayed out of that debate but was later asked my opinion on the #macsb IRC channel. I gave a few reasons why I remained undecided, but here is the now fully-developed version of my answer that omits the one that went “it means I actually have to do something, which is never a good start”.

The aim of moving to the euro would be to achieve price stability for myself and not to be tied to a currency that will continue to nosedive in value. The trouble, from my perspective, is that the move is difficult to sell, if not to my customers then to myself.

Consider the following:

• Most people in the US prefer to pay in dollars. They know exactly what it’s worth without doing any mental arithmetic, or to be told down the line that €25 is actually $34 (the price today) and probably worse given PayPal’s conversation rates.
• Most people outside the US know the dollar is at a real low point, so they’re getting a bargain. Even I get disappointed when I see something priced in euros because I know I might actually cost me money.
• Most people outside of Europe don’t know the rough value of the euro at any given time, so while they may be more accustomed to currency conversion, it’s not something they’re likely to do on the spot. It has the potential to confuse and infuriate.
• Moving to the euro would effectively create a price increase for US customers (and others) if the value of the dollar continues to plummet while the euro remains strong.
• Competing products are most often priced in dollars, although whether price is a consideration in that way is another matter.

So, already it’s not looking too great for the euro, but the situation is certainly better than using Sterling which would confuse almost everyone and there doesn’t seem to have been any fuss over the change for Martin or Rory.

My other concern with the euro is the way it works. In case you don’t know, the European Central Bank sets a single interest rate for all Eurozone countries. That’s one interest rate, but numerous different economies all ticking over independently. This has created, for example, a crazy house price boom in the Republic of Ireland because the interest rate is considered too low, while Germany struggled to get its economy moving with rates that are too high.

Maybe this will all work out, but it makes me wonder whether I’m jumping from one sinking ship to another that’s permanently negotiating icebergs.

Other than that, I think the euro is great. As travel money, it’s so handy to be able to use the same currency in three different countries in one day (as often happens when you’re travelling around Europe) all with the same exchange rate – hence the appeal.

So: what to do? With the amount I’m earning decreasing and my cost of living increasing, the situation is clearly unsustainable.

Another option is simply to raise prices. It wasn’t my intention to do that either, although a change in currency could bring that about for many people if the value of the dollar continues to decline (i.e. the whole point of this exercise).

However, I have been working on future plans lately and realised something blindingly obvious. I had already intended to raise prices on the next versions of my products because, without that rise, they would be considerably lower priced than many of their competitors, yet equal if not better on features, etc.

So, prices for the current versions of my products will remain unchanged and I will continue to price in US Dollars, but future versions of my products will be priced to match their improved capabilities, while remaining competitive. The plan may yet change, but for now I think that is the answer to my personal conundrum and one that I think is fair for everybody.

ThinkMac’s Rory Prior is asking how people would feel about paying for software in Euros rather than US Dollars, or alternatively accept USD price rises so he can maintain his level of income. It’s something I’ve wondered myself as the USD/GBP exchange rate has worsened dramatically over the last year. It’s not the first time it’s been at this level, but it’s about as bad as it’s ever been in recent times.

After some background information, Rory asks:

If you’re an American I’d love to know your thoughts on paying in a foreign currency and whether it would be a barrier to purchase or whether you’d just swallow dollar price increases as the currency devalued further?

Obviously there are lots of benefits to using the dollar – most people understand it no matter where they live, it will likely be the same currency as your competitors and, as far as I am concerned, most of my sales are from the US anyway. However, it is unnerving to see your income fluctuate while sales remain steady.

So, if you have an opinion, why not leave a comment on the ThinkMac Blog or here.

Update: It seems John Gruber posted a link to this on Daring Fireball, so Rory should get lots of comments, so post yours on ThinkMac too. Thanks! 😀