The audacity of charging from day one.
thestartupfoundry.com
thestartupfoundry.com
The company charged hundreds and thousands of dollars for software licenses from day 1 even though the first versions of the products were pretty bad. In fact, we even had customers who bought these early versions not because they wanted us to succeed. I remember at least one customer who bought licenses for many tens of thousands of Euro telling us 'we won't use your software yet because it is not good enough but we believe that you will deliver great software one day and by buying early version we will keep you alive'.
So yeah, charging right from the start worked out tremendously for us. Without it we would not have survived.
Its great that the customer believed in you and your product so much that they basically funded you by buying initial versions that were "bad". What was the product? Were there few or no competitors in the market? I assume the company which purchased your initial versions would have just gone with your competitor otherwise.
The product was BinNavi (http://www.zynamics.com/binnavi.html) which sold for (I believe) roughly 3000 Euro per license despite being really terrible for the first two years of its existence.
The only competition was IDA Pro (http://www.hex-rays.com/idapro/), the standard tool for binary code security researchers, but BinNavi aspired to be much more than IDA Pro and our customer was aware of our vision and bought many licenses to support us.
Because then there would be real reference points for calculating valuation, which is counterproductive in an industry that relies on bubble economics.
That said, business has slowed for me mostly because now I have more competitors, their software is better than my competitors at the time, and most of my competitors offer free versions, which I still do not (though I am contemplating).
(this is all in relation to my guild hosting site, link in my profile)
However, I believe they have reached a point that it should start to charge. Those who see it as a value have spoken up about wanting and willing to pay.
1) That I come from the open source community, where charging is successful and the value of your code is often personal rather than looking at the user's value. Also, much of my knowledge of coding has come from reading others' code, does this mean whatever I create is an extension of their creations, which they offered free of charge?
2) That I wasn't sure I was good enough to charge. If users started paying money and my database went down when they needed it most, how would I respond? I'm not a legal expert or even a trained business person.
The solution to your first question is to realize that all professional developers have learned from other developers. It's a pay it forward system. Someday, someone will look at your code or receive free advice from you that helps that person make a living off of software. That said, if you think you are deeply indebted to a particular person, you could thank that person with a monetary gift or even purchase rights/license to use the code.
All professional anything have learned from others: teachers, doctors, lawyers, authors.... It's how society gets better. Business is the engine that powers it (even if indirectly), and money is the fuel that allows it.
There's absolutely no harm in charging for something of value you create because of what you have learned. Besides, you can always give back to the open source community- maybe even moreso if you are in a position to provide a little funding for some projects (because you charged for your product).
Yes it does. Everything ever created is an extension of what someone else created. And someone may create something new based partly on learning from you. Don't worry about it.
Either way, I think that people's hesitance to charge for their products is probably more often motivated by the fear of slow/non-existent growth rather than the fear of coming across as a sell-out.