joel on software quotes

We have lots of FogBugz customers who have high-priced Remedy, Rational, or
Mercury products sitting on the shelves after investments of well over
$100,000, because that software isn't good enough to actually use. Then they
buy a couple of thousand dollars worth of FogBugz and that's the product they
really use. The Rational salesperson is laughing at me, because I have $2000 in
the bank and he has $100,000. But I have far more customers than he does, and
they're all using my product, and evangelizing it, and spreading it, while
Rational customers either (a) don't use it or (b) use it and can't stand it.
But he's still laughing at me from his 40 foot yacht while I play with rubber
duckies in the bathtub. Like I said, all three methods work fine. But cheaper
prices is like buying advertising and as such is an investment in the future.

Joel Spolsky
"Camels and Rubber Duckies" (on the Pricing of Software)

The recruiters-who-use-grep, by the way, are ridiculed here, and for good
reason. I have never met anyone who can do Scheme, Haskell, and C pointers who
can't pick up Java in two days, and create better Java code than people with
five years of experience in Java, but try explaining that to the average HR
drone.

Joel Spolsky, "The Perils of JavaSchools"
http://www.joelonsoftware.com/articles/ThePerilsofJavaSchools.html

"O frabjous day! Callooh! Callay!" I chortle. We have found the optimum price,
$220, and that's how much you should charge for your software. Thanks for your
time.

Ahem.

Thank you for your time! Nothing more to see here! Move along now!

You're not leaving.

I see.

Some of the more observant members of my audience have detected through careful
analysis of the scrollbar position in their web browser that I might have
something more to say other than "$220."

Well, maybe. There's just a tiny little loose end I left untied which I might
as well tie up now if you're all still up for it. Ok? OK!

Joel Spolsky / "Camels and Rubber Duckies" (on the Pricing of Software)

When you're setting a price, you're sending a signal. If your competitor's
software ranges in price from about $100 to about $500, and you decide, heck,
my product is about in the middle of the road, so I'll sell it for $300, well,
what message do you think you're sending to your customers? You're telling them
that you think your software is "eh." I have a better idea: charge $1350. Now
your customers will think, "oh, man, that stuff has to be the cat's whiskers
since they're charging mad coin for it!"

And then they won't buy it because the limit on the corporate AMEX is $500.

Misery.

Joel Spolsky
"Camels and Rubber Duckies" (on the Pricing of Software)

Bad Idea #1: Site Licenses.

The opposite of segmentation, really. I have certain competitors that do this:
they charge small customers per-user but then there's a "unlimited" license at
a fixed price. This is nutty, because you're giving the biggest price break
precisely to the largest customers, the ones who would be willing to pay you
the most money. Do you really want IBM to buy your software for their 400,000
employees and pay you $2000? Hmm?

As soon as you have an "unlimited" price, you are instantly giving a gigantic
gift of consumer surplus to the least price-sensitive customers who should have
been the cash cows of your business.

Joel Spolsky
"Camels and Rubber Duckies" (on the Pricing of Software)

Imagine that we had a way of sending actors from Broadway to Hollywood that
involved putting them in cars and driving them across the country. Some of
these cars crashed, killing the poor actors. Sometimes the actors got drunk
on the way and shaved their heads or got nasal tattoos, thus becoming too
ugly to work in Hollywood, and frequently the actors arrived in a different
order than they had set out, because they all took different routes. Now
imagine a new service called Hollywood Express, which delivered actors to
Hollywood, guaranteeing that they would (a) arrive (b) in order (c) in
perfect condition. The magic part is that Hollywood Express doesn't have any
method of delivering the actors, other than the unreliable method of putting
them in cars and driving them across the country. Hollywood Express works by
checking that each actor arrives in perfect condition, and, if he doesn't,
calling up the home office and requesting that the actor's identical twin be
sent instead. If the actors arrive in the wrong order Hollywood Express
rearranges them. If a large UFO on its way to Area 51 crashes on the highway
in Nevada, rendering it impassable, all the actors that went that way are
rerouted via Arizona and Hollywood Express doesn't even tell the movie
directors in California what happened. To them, it just looks like the
actors are arriving a little bit more slowly than usual, and they never even
hear about the UFO crash.
Joel Spolsky's Analogy of TCP, "The Law of Leaky Abstractions"

You can have focus groups and ask people, but they'll lie to you. Some people
will lie to show off their generosity and wealth. "Heck, yeah, I'd buy a pair
of $400 jeans in a New York Minute!" Other people will lie because they really
want your thing and they think you'll decide to charge less money if they tell
you a low number. "Blogging software? Hmm. I'd pay, at most, 38 cents."

Then you ask another focus group the next day, and this time, the first man to
speak has a crush on a pretty woman in the group, and he wants to impress her,
so he starts talking about how much his car cost and everyone is thinking Big
Numbers. And the day after that, you serve Starbucks during the break, and
while you're in the john everyone unbeknownst to you gets into a side
conversation about paying $4 for a cup of coffee, and they're in a real frugal
mood when you ask them about their willingness to pay.

Then you finally get the focus group to agree that your software is worth $25 a
month, and then you ask them how much they would pay for a permanent license
and the same people just won't go a penny over $100. People seriously can't
count.

Joel Spolsky / "Camels and Rubber Duckies" (on the Pricing of Software)