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Should I charge for my web application?

Have a great application? Put a price on it!

For some time now, I have been hearing about how web applications need to be free, or very close to free at the least.

The interesting fact here is that these “free future” gurus are often owners or founders of social networking sites. And as we discussed on our last post, no one has a clue as to how to go about making cash from a social community; the ad-based revenue model works only for huge and very particular social sites. So why then should we consider that this “free” model is worth it for everyone?

If you have a consumer-facing application, perhaps you don’t really have much of a choice and you have to bet on creative strategies to make money for your business indirectly. But if you have a fancy and useful business-oriented web application, why on earth wouldn’t you charge for it? Why do some pseudo-gurus insist on turning the word “charge” into a dirty one?

Let’s say this very clearly. Startups need to become cash flow positive, and as one friend always tells me, “in an economic crisis cash is king.” There’s nothing to be ashamed if you focus on profitability, especially if you are building your web business in a socially responsible way. Humanizing Technology remember? Let’s be consistent here. We simply cannot expect entrepreneurs to invest in bringing brilliant ideas to life and building sustainable web businesses based on the weak ad-based revenue model.

Even if you have big subsidies and raise huge capital, you should put a price on your idea if you have a niched product. You’ll be amazed - and maybe you shouldn’t – at the number of people who are willing to pay for a good web application.

Do you believe you have a great product? Does it help your clients save money, make them more efficient, or just be more organized? Then don’t hesitate and put a price tag on that web application.

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3 Comments »

  1. I think the shareware model pioneered by the former lead in the games publishing business, Apogee, can be revisited:

    One could get free (ad based) access for roughly a third of the web app functionality. This would attract many potential customers who would be weary of spending their money on an app without trying it first.

    Full access, of course, should remain available only for those who pay for it.

    Comment by Thiago Cavalcanti — March 19, 2009 @ 11:11 AM

  2. The “freemium” model is also a very good way to go Thiago.

    We will be posting about it next week. ;)

    Comment by Horacio Poblete — March 19, 2009 @ 9:49 PM

  3. I’ll wait then…

    Comment by Thiago Cavalcanti — March 20, 2009 @ 10:33 PM

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