Why Instapaper Free is taking an extended vacation | Hacker News Reader

Why Instapaper Free is taking an extended vacation

marco.org

283 pointsrufo112 comments

"Maybe you think I can only do this because Instapaper is already popular. But it built its popularity while charging a lot for an iPhone app from the start."

AND there was a free version out.

He's neglecting the "critical mass" factor.

The free version helped him sell the full version until it reached that "critical mass" that was required for the popularity of the full version to continue to drive sales of itself.

I've personally found that by just offering a paid version of an app from the beginning is quite frustrating. But once I put out a free limited version, sales took off. So, MAYBE I'll try losing some of my free versions to see what happens, but I think that free-to-paid actually works just as well.

AND there's a free website that drives people to know about the ipad version in the first place.

Interesting that for all the arguments about charging for the iphone/ipad versions, he's not charging for the website service itself (which presumably costs money to run too). Perhaps there's value in 'free' after all?

This is actually a great point--why not provide a free web version and a paid iPhone version of any product?

Flash game developers do this (see Canabalt, World of Goo), so extending the model to iPhone apps isn't a bad idea.

> The free version helped him sell the full version until it reached that "critical mass" that was required for the popularity of the full version to continue to drive sales of itself.

From the investigating he did it didn't look like the free version drove the paid one. Evidently very few people signed up on the free app and later showed up on the paid one.

This isn't the right conclusion to draw from his investigating. All he showed was that, as you said, few people upgraded from the free app to the paid one. This does not necessarily mean that the free app did not significantly help the paid app sell. Maybe it was fairly common for one geek to buy the app, show it to his friends, who would then try it because there was a free version and not ultimately ever buy the paid version, but still talk about the app and introduce it to people who did buy the app. There are uncountably many other situations like this that could have happened and caused the presence of a free app to have helped the paid app; this is very far from a controlled experiment.

> He's neglecting the "critical mass" factor.

See the "Every app is a special case" section.

That section does not address the likeliness of Instapaper having gained a critical mass of users and people knowing about its existence before being able to pull the free version.

There was already a 'web only' service before there was a web app and together with the free version that has resulted in a lot of people 'knowing about it'. Once you reach critical mass, further sales can result from word-of-mouth advertisements and 'having heard of it once'.

We would have to do a verification experiment: go back 18 months in the past and pull the free version from the appstore. There is not a doubt in my mind that that would have turned out bad for Marco.

I second, third, and fourth the notion about pathological customers. iOS is practically training a generation of them. I'm glad they are far away from me.

Many of my friends own iPhones, and many are flabbergasted when they find out that my phone is not jailbroken nor is it filled with free apps.

I happily pay for quality apps. Why? It's going to cost me anywhere from $1 to $10, and that is honestly chump change for an app that will provide much more in value.

For some reason, if you give away your work for free, all of the cheapskates and losers come out and start insulting the service and/or claiming they didn't get enough support.

What do people expect when they don't pay for a valuable app...?

As someone who works on software for jailbroken phones, I just want to make it clear that jailbreaking and piracy are not the same thing.

Yes, jailbreaking makes piracy possible, but Cydia has multiple warnings about adding the repositories required for piracy. In fact, our best statistics show less than half of all the jailbroken devices have pirated an app.

I agree with your points, but I don't want people to misunderstand the point of jailbreaking: jailbreaking is about controlling your own device and doing things the App Store doesn't even conceptually allow.

You seem like you might be a good person to ask: I love the idea of jailbreaking all my devices (I did so on my 1G iPhone as soon as it was possible). However, modern-day Cydia scares the bejeezus out of me. I have no easy way to discern what's reliable, let alone trustworthy, and I wish I could know what's getting installed under the hood, especially regarding background processes and changes to the underlying OS.

Can you give me some tips on how to discern quality and safety in Cydia packages, or are these things simply endemic to the jailbroken app ecosystem?

I don't think quality and safety are concerns unique to Cydia. Why does it scare you to use it? Do you really have any way of knowing what "genuine" apps downloaded from the appstore are doing?

http://blogs.wsj.com/digits/2010/10/04/iphone-apps-transmit-...

To some extent, there are privacy and trust issues in both places. But I have a bit more confidence in Apple's ability to police their store, and more importantly, official apps are sandboxed and can't touch the filesystem or OS directly.

But honestly, I'm more concerned with quality than trust. I think that malicious apps are probably very rare on Cydia; I'm more concerned with background processes that eat battery life, changes to the underlying OS which make the phone unreliable, buggy code with unintended side effects, etc. I don't think this is the norm, but I have very little information with which to separate the gems from the junk.

On a computer, installing apps with no restrictions is the norm, and so there are countless forms of social proof to discover which apps are safe and reliable. I'm looking for something equivalent for Cydia packages, as well as detailed manifests of what is installed and running with each install. (Perhaps I should just stick to paid packages, where the author has higher incentive to maintain quality.)

Disallowing access to private APIs does at least offer some amount of protection against flagrant theft of personal data.

I suspect the fact that Cydia sounds and looks something like Chlamydia doesn't help with the fear factor...

You are 100% correct, and I agree, they aren't the same thing.

But you try telling that to someone who isn't so technically inclined. To the average joe, jailbreaking probably equates to pirating, just because it enables you to do so. Just like "torrenting" isn't the same thing as "pirating," one will often find that the mainstream association of torrenting is that of piracy.

However, it makes me feel slightly better than the majority who are jailbreaking their phones aren't sailing the seven seas and looting and pillaging all of the apps that they can find.

I really hate the fact that you can't just straight up pay for more things and am deeply suspicious of free services. What benefit do you get from me using your service if I'm not paying you? In some cases, like Google, the benefit is that I can be sold to advertisers. Nothing is really free, and it's better, cleaner, and less scammy feeling to know and pay the cost up front.

If there's a free vs. paid app that I want I will always go for the paid app. I never tried Instapaper free.

> if you give away your work for free, all of the cheapskates and losers come out and start insulting the service

This is exactly what Spotify experienced when they announced they were going from free -> not so free.

http://www.spotify.com/uk/blog/archives/2011/04/14/upcoming-...

I've spent a decent chunk of money at Cydia, and have never pirated software. My dock has five icons, I have always-on access to a panel that controls WiFi/Bluetooth/Airport etc, Grooveshark, oh, and of course, MiFi.

Cydia is awesome. Piracy is not why.

Another data point: here only one friend has a jailbroken iphone. The other ones don't even know what it means :)

But otherwise I do agree with all you wrote!

The best way to deal with pathological customers is to ignore them, not to let them drive your decisions.

Though, I have to admit, I sometimes enjoy enraging pathological customers. On the phone, I have told them they are fired, and not welcome to come back to my website ever again. I sometimes pretend to be a nearly deaf old man when dealing with their complaints. It makes my day when a pathological customer calls now. Unfortunately, I only get a call from a pathological customers every other month or so.

"not to let them drive your decisions"

That's possible, but they will be a factor in your business if they are unfairly slamming you in reviews.

You are right. But keep in mind, those pathological customers are everywhere. Reviews are a big factor when deciding between competitive products, and your competitors will face the same pathological customers.

ReadItLater's free version is rated 1 star less than the pro version. All of the 1 star reviewers appear to be worth ignoring.

I'd install something like appirater to try to drown out the morons, and boost ratings. https://github.com/arashpayan/appirater/

There's some incorrect logic in there to point out.

"The math to explain this is simple: most Free users won’t give me anywhere near $3.50 worth of ad impressions."

So, a free user is less valuable than a paid user, fair enough. But not 100% of people who would use the free version will buy the paid version.

As he said in the second paragraph, "it’s hard to say which portion of the increase, if any, is attributable to Free’s absence"

While I'm not saying this is for sure, it is a possibility that, while one user with adverts gives him less money than one user who pays, cutting off all the free users could lose more money in advertising than it generates in sales.

Agreed. Since his logic of "no one seemed to care when I removed the free version" implies that very few people who download the free app would ever buy the paid one, it seems strange that he would compare the sales directly. If the free version is only downloaded 3x as many times as the paid one, then each free user only needs to make $3.50/3 in ad revenue.

But as he points out there are other costs to be taken into account. The amount of ad revenue can't be directly weighed against the money generated by sales. You also need to consider the development costs of maintaining the lite version, deciding what should be a universal feature, etc.

Sure, I'm not arguing for/against removing the free version, just with the logic of comparing the advertising revenue per person with the cost of the paid version.

And server cost too

Excellent analysis and line of thinking. The tech community really needs to give up the idea that hard work should be given away for free. Trail periods are fine, but legitimate businesses need real cash flow, and very, very few can survive off advertising alone.

The tech community really needs to give up the idea that hard work should be given away for free.

Does "[t]he tech community" even have that belief to begin with? The techies I know, both OSS contributor and not, believe that there is value in giving away some things (e.g., open sourcing projects) but proper and expected to charge for other things.

While people may not agree on what exactly should be free I've met no one who flatly claims hard work should be given away for free.

The web appears to, but it actually follows the OTA television model (with all the implications). The Apple-led smartphone world is in an odd large-scale-B2C place right now that is looking increasingly unsustainable.

How does he know nobody will buy the Android app? I barely use any free apps other than the ones that come with Cyanogen Mod.

Titanium Backup? Paid. ROM Manager? Paid. Treking? Paid. Android IRC? Paid. X-Plane? Paid.

Android users have no problems paying for apps. Non-Android developers are afraid of the unknown.

I ported an iOS app to Android. I've sold three (!!) copies while in that same period, the iOS version has sold about 300. I dropped the price from $5 down to $2 over easter and still didn't sell a single copy during the sale.

The two apps have the same content and the sales funnel is exactly the same. (The only difference is the iOS app has lots of 5-star reviews.) It seems clear to me that Android users can't or won't pay for certain kinds of apps.

To all app developers, please don't give up on Android. If your market is educated middle class folks -- i.e., if you don't sell games and fart apps -- then give us a chance to start showing up in the Android market. Most of us bought iPhones back when they were clearly superior, and we are unwilling to throw away a couple-hundred-dollar piece of electronics that works perfectly fine. The new line of Android phones look great. I'll certainly be there in less than two years, maybe less than a year depending on how long my phone lasts. At that point all my spending will move to the Android market. I'm not a huge purchaser of apps -- I've probably spent somewhere between $50 and $100 on apps -- but I did buy Instapaper!

Okay, what bias did I run into here? Not everyone who is excited about Android is going to immediately shell out a few hundred bucks when they already have an iPhone. For me, that's enough money that I think about how to spend it, and new gadgets usually lose out to other priorities. Does that make me a bad nerd or something?

I'd also like to see Android thrive (mainly to keep Apple from behaving badly) and you make a good point that Android is steadily moving into the mainstream. But it will be a challenge for Google to shake the impression that Android users are reluctant to buy apps.

btw, another post from marco that shows his skepticism towards Android: http://www.marco.org/2011/04/02/time-bombs

Amen. My $0.99 app (http://news.ycombinator.com/item?id=2407744) for Android which has been out for more than a month and costs $0.99 has seen only 6 downloads (4 of which are my friends!) I'm really curious as to how it will "sell" if I change it to free, and if there was an iOS version.

What app? How well known is it? What is your competition on both platforms? Have you marketed the Android version as much as the iOS version?

It's called GoSwedish - a friendly introduction to learning Swedish. http://xinsight.ca/goswedish/

Findability within the Market might also be a factor. A search for "swedish" in the App Store, and it's on the first screen. But it's quite a long scroll down on the Android Market.

This is the testament to the reach of the App Store. Your app is targeting an incredibly small, niche market, and you're still selling hundreds of copies.

Sounds like it was the primary reason you had low sales. Without similar placement in the Android Market, you really can't claim that one market was more successful than the other purely on its own merits.

I wish I knew where customers came from, but the app Store and Android Market are both black boxes.

I'm sure some people find apps from within the store (e.g. searching for "swedish") - but I expect most to come from youtube (where there are lots of GoSwedish videos) and then search for the app by name.

Update: Or maybe I just need to do more to get the word out. I sold 10 Android copies yesterday! (Thanks HN!)

GoSwedish and BikeDoctor? Pretty fringe apps. I wonder if the real problem is the findability of fringe apps for Android.

Also perhaps Android users are not indoctrinated to the Apple "walled garden concept", and expect to find these on an Internet website rather than in an application. I certainly find the concept of a guide to bike repair or learning Swedish in the form of an application very odd. An application store isn't the first place I would consider looking for this type of thing.

Second Amen - my app http://bikedoctorapp.com launched on iPhone and Android using exact same tactics (5000 person email newsletter + dominating the relevant keyword on Google + contacting app blogs) download rate on Android has been maybe 1/30th of iPhone. Typical feedback: "This is the first app I've paid for on Android".

Wow, sounds like a good story that deserves its own blog post.

Thanks for the encouragement.

I was going to release a free version on Android before writing up my experiences. I thought the liberal return policy on Android would eliminate the need for "lite" apps - but the return window is only 15 minutes which seems a bit tight. Better to have an app where you can fully evaluate it and then buy when you're ready.

Marco has a well established anti-Android bias, both Android the platform and Android users. He's been dismissive of it since the beginning, so this post-facto justification that Android users won't pay for apps is a bit hollow.

ReadItLater Pro for Android is clearly analogous. It was released at a $1 launch sale price (80% off, they say) on March 9; 11 days later it crossed 10,000 downloads from the Market. That seems like a substantial demand and willingness to pay for it on behalf of Android users. http://www.appbrain.com/app/read-it-later-pro/com.ideashower...

The market data suggest that you're mistaken. In 2010, the App Store took in almost 20 times the revenue that the Android Market took in. $1.7 billion for the App Store, compared to $102 million for Android Market. Considering where Android market share stands relative to iOS, this means that iOS users are absolutely more willing to spend money on apps. That's obviously not the case for every Android user, but the relative aggregate difference is what matters when deciding what platforms to develop for.

As an iOS developer, I can't stress how important this metric is. I don't care if Android gets 70%, 80%, 95% marketshare if the App Store is generating way, WAY more money for developers.

In 2010, the App Store took in almost 20 times the revenue that the Android Market took in.

That's less extreme than it sounds for several reasons:

- Android's market share was tiny for the beginning of 2010. It didn't start taking off until mid-year with the EVO, Droid X, Galaxy, Desire, etc.

- There were way more paid apps for iOS than Android in 2010.

- Android apps more commonly use ads than iOS apps, which isn't captured in app store revenue.

I'd still expect that the median iOS app makes more than the median Android app today, but the difference should be much less than 20x.

There will be buyers, but he does not see enough buyers to worth his time.

He'd have to rewrite the whole thing in Java, modify UI to fit in Android environment, maintain two code bases and try to keep feature parity.

He's a one man shop, he decided against it, and I agree with his decision.

I'm sad to hear his attitude towards android, I've been anxiously waiting for an android version of the app, and have been holding off on becoming a subscriber until he moved in the android direction. Knowing this, I will sign up as a subscriber to show my appreciation for the ability to export to kindle format, which has been great for me, but unfortunately it means instapaper is no longer a candidate for a long term solution, but rather an intermediary tool I use for reading articles on the kindle until something else comes along.

Marco I really hope you change your attitude towards android, there are definitely people out there who would happily pay for an android instapaper app. That said, I understand if you don't and want to say thank you for everything you've done so far, even without android support it has been a very useful application for me.

Instapaper has an API. There are at least five third-party Instapaper clients for Android available in the Marketplace. http://www.quora.com/Whats-the-best-client-for-Instapaper-on...

This post reminds me of a post by Jacques Mattheij about an experiment he did by doubling the price of his app:

http://jacquesmattheij.com/Double+your+price+(and+no,+Im+not...

These two articles definitely make a case for experimenting with the pricing based on your market and target audience to find the sweet spot.

I've been using the free Instapaper iPhone app for some time, until it just completely stopped working. Trying to update, it would tell me that there was no network connection. Uh, wrong. Over and over. Eventually I logged out, wiped the local cache, and tried logging in fresh. And what did I get? A blank page with "403" at the top.

My impression of the app at this point was that either the developer is a fuck up or that I've been geo-locked out because I'm not in the U.S. Actually the second implies the first. I didn't care, I just stopped using Instapaper.

On the basis of this post, I took a leap of faith. Despite a complete failure of user experience with the free app, I bet $5 that maybe the paid app would, well, work. And so far it has.

Marco, if you're listening, you make some great points in this post, but your upselling in my experience is... as described.

As an alternative viewpoint, his thinking seems incredibly shortsighted. When it comes time to launch "InstaAlbum, share your family photos", he is going to have 1/3 the potential audience to draw customers. 3x the existing customers could make the difference between the top of the charts and the press recognition that goes with it.

Part of his rational is that some tiny percentage of the free customers complain, and write negative reviews. Marco should man up and simply accept he has a good product and is a talented developer. That way he doesn't have to give a damn about the haters. It is sad that the %.1 of the population that is inherently bitchy, is driving his business decisions.

Of course he has to care about the haters if they leave negative reviews of his apps: negative reviews will directly hurt future sales. If people see the free app with a bunch of negative reviews, that can harm the overall brand, even if the paid app has a bunch of good reviews. I didn't hear him saying it hurt his feelings that he got negative reviews; it's simply bad for business.

...Marco should man up

If it gets under your skin and you are meeting your revenue expectations is there a good reason to invite haters to your party?

Yes, there is good reason. The haters bring 1000 normal people that you can sell your product to.

Again, he seems happy with his revenue generation and he cuts down significantly on annoying chatter in his ear. Seems like a good decision. Some folks would talk about his "lifestyle business" and how he needs to change x and y, I'd say just keep on trucking.

I use Instapaper free and am happy with it. The ten article cap doesn't bother me because I clear my backlog quickly. I actually like choosing from ten articles, reading one, archiving it and seeing a new one pop into the menu. Free used to not save my place in the article and I almost upgraded for that, but then Free started to save my place and I didn't upgrade. I am vaguely aware of some other features Pro might offer, but ignorance is bliss...

I think Readitlater (and lately Readability) strips down the content much better than Instapaper. Instapaper always has a lot of weird extraneous stuff around the text. The others do not. +1 for them.

In fairness, it's worth noting that Readability app is Instapaper; it's just been repackaged. http://techcrunch.com/2011/02/05/instapaper-readability/

Not true. Read it again -- the partnership is different. Readability was stripping away stuff long before it's partnership with Instapaper, and Safari incorporated it long before said partnership.

Send a page to Instapaper. Then send to Readability. I guarantee you will like Readability more. Try it.

https://www.readability.com/about

I've been using Instapaper (mostly on programming related blog posts [standard WP/Blogger templates] and major magazine articles [Vanity Fair, Economist, etc]) for a while and rarely found this to be the case. It has almost always stripped unneeded markup well, often providing a superior reading experience on the iPhone than iOS Safari's rendering of the original content.

Are there any specific sites/types of pages you've had trouble with?

My only real complaint about Instapaper is that it often seems to strip out the byline, and sometimes even the name of the publication, leaving me without some of the context I like to have when reading an article. (Here's an example of missing byline: http://www.instapaper.com/text?u=http%3A%2F%2Fwww.bookrags.c... (the article is written by Zadie Smith, which I find to be very important information.))

Instapaper has little need for a free app because it's so unique; there are few paid alternatives, let alone free ones. If you're building something less extraordinary, offering a free app with an in-app upgrade path makes more sense.

The free-to-pro transition seems to work better with a single app using in app purchases (to remove ads and unlock features) than with two separate apps.

It's possible to structure the experience in a free app to make the upgrade more compelling too. Thermo and Astronut (both for iPhone) are two examples that handle it well in different ways: Astronut (game) presents an upgrade option when you reach the end of the first stage; Thermo (temperature widget) shows an ad at the bottom with a tempting X button -- when you tap that, you're prompted to upgrade.

I totally get Marco's decision to go with a paid version of his app. Of course, he doesn't provide an option for publishers to opt out of providing free versions of their content, which is what they're doing when Instapaper strips all the ads off of them.

He actually does:

http://www.instapaper.com/publishers

He also does through Readability (http://www.readability.com/). He's an advisor to Readability, Readability's iOS apps are based on the Instapaper iOS apps and Instapaper can be linked with Readability to provide Instapaper activity to Readability so that publishers can be paid. http://www.marco.org/2011/02/01/readabilitys-new-service

That's not entirely true. Whatever article I am reading in instapaper is an article I have visited in a normal webbrowser first, with all their ads in place. Then decided I didn't have time to read it at that moment and clicked the instapaper "read later" bookmark, but by that time I have already seen and ignored your ads.

Great article. I particularly liked the points about filtering out undesirable and unprofitable customers. Some clients really are just wrong, and far more trouble than their business is worth.

I recently bought the paid app, based on the recommendations of a friend and the number of positive reviews in the app store, but am quite disappointed in what I got in return for my $4.99. I won't turn this into a review of the functionality or criticize the developer for wanting to increase sales, but I will say that buyers should have a way to vet the product before purchasing it (there was no free option when I purchased it).

  Not only did sales increase incrementally, but nobody seemed to notice.

What does this mean? This "nobody even noticed!" attitude he expresses several times seems very ignorant to me. Sure, very few people heard that Instapaper had a free iPhone app, didn't look for it right away, then a month later searched for it, saw it wasn't in the App Store, and emailed or tweeted Marco personally asking what happened. This is the only chain of events I can see leading to a potential user giving Marco direct feedback, the lack of which is what he seemed to interpret as "nobody noticed."

If you change a bunch of road signs, but everyone from the neighborhood is on vacation and so no one sees the new configuration and exclaims "What is this?!", does that suddenly mean that new drivers won't act differently in response to the new road sign configurations? Note that assuming that somehow "everyone from the neighborhood is on vacation" is not at all an unrealistic assumption to make. People who had already downloaded the free app were golden when he removed it, so long as they didn't wipe their iPhone or upgrade. You could argue that maybe they would've thought "huh, why haven't I gotten updates in a while?" First of all, I doubt anyone thinks like that. I know I certainly don't think about updates until the App Store tells me I have 10 and I get frustrated at it; I only notice when apps require updates, not when they don't require updates. Second of all, they may have just thought the free app would be getting less updates than the paid one.

And there are countless other reasons why "no one has personally emailed me about the absence of this" is a terrible reason to conclude "nobody really cared" and especially (what I think he is implicitly getting at) "no potential future buyers of the paid app were turned off by the absence of a free app." Maybe they only cared a little and got bored once they couldn't find it in the app store, but otherwise would've been engaged by the app or (since he acknowledges that there are few converts) have been interested enough to tell friends who would eventually pay for it. Maybe, and this is _crazy_ to propose, a significant number of geeks went looking for the free app having heard a lot about Instapaper, saw there was no free app, were pissed, but didn't know or think or care to email Marco about it; maybe they thought he did it purposefully and didn't want to bug him, maybe they were intimidated, maybe they didn't know who Marco was, etc.

I'm one Android user who would definitely pay $5 for an official Instapaper app.

Why? Read It Later is a great, overlooked service that does the same thing. It's also well designed. And it's cross platform.

Thanks for the tip. Just gave it a try, and it looks great so far.

I have had no issues with InstaFetch and it serves the purpose pretty well.

Since comment scores aren't displayed anymore, I'm stuck replying 'ditto'.

Perhaps the free app might've converted better if Marco had added an in-app purchase to upgrade to the full version.

Or perhaps not. I've spent hundreds on apps, and have yet to spend a single dollar in IAP.

Horses for courses... it all depends on what type of market your app caters to.

Agreed. I've upgraded from a free version to paid from within an app (MobileRSS) before, but I'm not an average iOS user.

I think marco's point about the free version creating a "bad neighborhood" around his paid app really nails it. If you're not generating appreciable traction from the free version, but are starting to develop a negative image and generating significant headaches as a result of it, it's probably a smart move to suspend the free version.

I have a lot of respect for all the hard work, especialy since I am hooked to Instapaper like services, and getting rid of the free version might be a good move I think. Now, he seems to have such a policy of ignoring his competition in his talks.

I would guess one reason he doesn't hear complaints about the loss of the free version is because ReadItLater and others have a free app to catch these users. He talks a lot about the cheapstakes that wouldn't upgrade, but the free version couldn't get me to register when I tried it. When it worked afterwards, it was so stripped down it wasn't funny.

In contrast the decision to buy the ReaditLater (same priced at the time) pro version was natural, and I kept the free version on devices I didn't care to sync.

At least, he is totally right, after using the Instapaper free version, I am bitching a lot.

I had tried the free iPhone app and could never get the thing to accept my credentials. So, I gave up and didn't give it much thought.

But then I kept hearing about how great Instapaper was. I didn't get it. My experience with the free app was bad so I didn't know what I was doing wrong. Instead of writing a terrible review of the free one, I went ahead and purchased the paid app.

And now I'm hooked. I find Instapaper to be incredibly useful and love its simplicity. I then turned it on in my Twitter client, expanding my use even more.

The free app is a detriment to Instapaper rather than an asset. Marco is likely better off sticking with a great product customers are willing to pay for who end up loving the service, than having a mediocre app that doesn't build up a fan base that translates to paying customers.

Keep up the great work Marco!

Thoughtful approach on app pricing and customer selection.

The point that resonated with recent experiences was this one:

"How much effort do I really want to devote to satisfying people who are unable or extremely unlikely to pay for anything? (This is also a major reason why I have no plans to enter the Android market.)"

agreed, that point stood out to me too.

also his note about not needing every iOS-device owner. And his footnote illustrates just how huge the iOS market is:

"If “only” 1% of current iOS-device owners bought Instapaper, I’d make about $5 million. I’d love to have 1% of the market"

I applaud the fact that a developer can charge for his time and effort into building a good product. While I love hearing about these success stories, lets not forget the fact that all applications are different. There is an inherit and perceived value for everything and it's all dependent on the audience. The ROI per user is different for everyone, what works for you may not work for someone else. Marco's audience is made up of mostly tech savvy individuals where the implied value is greater than the cost of the service. This isn't the exception to the rule but it isn't the typical audience that a lot of startups are trying to capture. Every audience and product is different and take inspiration with a grain of salt. With that being said nice work Marco.

> On the website, this cost is defrayed by ads from The Deck, but people using the iOS app might never visit the website.

That's theoretically true, but how true is it? What percentage of people who have used the iOS app have also logged in via a desktop web browser? How many people have only logged in via a desktop web browser.

A look at the web server statistics would prove quite fruitful - it would tell the author where to spend development time. Do most of the active users have an iOS device? Do they ever use the mobile safari 'read later' bookmarklet? Spend time getting iOS push to push new articles to the app vs. time improving other things; but only if the data justifies it.

It's like a reverse of the iShoot story that caused everyone to run out and make free lite versions of their apps several years ago. Different market (productivity Vs. game, early app store Vs. current app store) but it's still interesting.

If it weren't for Apple's pricing restrictions, I would love to see a free version of Instapaper that is "unlocked" to a full-featured version if the linked account is a paid subscriber. (For those that don't know, Instapaper also utilizes a subscription model: http://www.instapaper.com/subscription)

I happily pay the quarterly subscription fee and would love a full-featured application to go along with it. That said, I no longer own an iOS device.

I don't think the App Store is necessarily fostering a new generation of entitlement minded people. I think those people have and will always exist no matter what. IMHO I always prefer paying for apps, and I never complain about the prices that are in the App Store. I prefer to support the hard work that goes into the quality apps that I use. I also don't feel it's fair or right for me to complain about a product when it's provided for free. I think Marco made an excellent decision.

Yes - he fails to note that the reason that most people learned about instapaper is because he offers a free version of it. I love instapaper but haven't contemplated paying for it because the differences between the free and paid versions are relatively minimal.

Freemium has a lot of perks, the chief one being - getting the word out about the product. How many people would know about dropbox if they didn't offer a free version?

These days I really prefer to pay a service or an app, hopefully to give it some sustainable fuel, rather than invest in a free tool that doesn't allow the author to pay its bills.

I love instapaper, but I really really want search built for it...

The latest version of the iOS app has search. Pull down when in a list of articles, and a search bar comes up.

I like his arguments since they are logical and backed up with data. But at the same time I never would have bought the app if I didn't use "free" for several weeks and got the idea it was useful.

This is after reading about Instapaper everywhere and hearing from close friends that it's almost the main reason they even have an iPhone (which was probably an overstatement on their part).

Edit: Can we please stop the tired argument of "you paid 600$+ for the device, what difference is 5.00$..."?

It's like people who pay 6000$ for a HDTV don't mind paying 100$ for the HDMI cable. Some people do indeed do that, but I for one determine the value of an app or accessory based on the sunken costs of the device. I value a HDMI cable's value at about 5-10$ because that is the cost of a quality one from Monoprice.

> But at the same time I never would have bought the app if I didn't use "free" for several weeks and got the idea it was useful.

There's a middle ground between only having a Paid app and giving a way a full featured, Free, ad-supported version. For example, you can create a Trial version that stops working after a certain amount of time. If you're making a game, you can only have the first few levels in the Free version. If your app creates content, then you can make a Free version that works exactly as the Paid version but does not allow for saving the users work. [I'm assuming these tactics are not forbidden by some EULA or whatever.]

Anyway you get the idea: there are alternatives that let the user see if they think your software is worth buying that don't involve giving the entire thing away and hoping to get enough ad impressions / conversions to make it worth while. Why so many iOS developers go this route instead of the above and just give away their app with some low eCPM ads is beyond me, though I've only dabbled in iOS development so maybe that's just what works for people :)

The time-limited demo idea is forbidden by Apple's TOS.

Does anyone know why? That seems fairly petty and arbitrary.

I'd assume it's got something to do with user satisfaction. Users hate when things are taken away from them.

The free version of instapaper was feature-limited, not just ad supported (at least at the time before I bought the full version)

  But at the same time I never would have bought the app if
  I didn't use "free" for several weeks and got the idea it 
  was useful.

I second this. Having experienced the free app and having bought the full app as a result has also resulted in two other people directly purchasing the app. There's a network effect that starts at the free app. The free app may not be necessary anymore, but I doubt it was never necessary in the first place. I think that would have flattened the sales curve quite a bit.

I think what is happening is there's a threshold for successful applications. Every application and website has a vetting period where momentum and marketing can advance to certain levels where a reputation is attained. This is where Instapaper is right now. Marco wouldn't have the audience he has now if it wasn't a free service to begin with. Now that the service has a reputation and a successful following you are allowed to charge a premium.

I am sad about this since I was an Instapaper Free to Instapaper paid convert. In fact, I would never have used it if I hadn't used the free app.

I know I'm in a minority of users, but I still think the free is useful.

Having initially spent many months using my iPhone and not paying for any apps at all (only downloading free apps), I took my first step into paid apps with a cheap $0.99 app, and realized that for the small price, it made my app (and phone) experience a whole lot better. After that, I was always willing to spend money on apps (even if it was just for experimentation) and Instapaper became one of the first apps I bought.

I don't know if this is an unusual thing, but I've noticed a lot of my friends act in a similar manner. After paying for that first app, they are very willing to pay for more. And you'd be losing some very good customers if you removed the free app.

I suppose I understand Marco's decision even after all this, I'm still unhappy that we might see it go.

And you'd be losing some very good customers if you removed the free app.

He's presented empirical evidence that he's not losing any, the exact opposite happens, he gains customers by not having a free app.

You've presented your gut feeling.

There might be something behind the 'critical mass' argument that some are saying, but that's impossible to test. Yours seems very wooly though.

That critical mass was likely there from Instapaper the web app. I went straight to paid since I was a fan of the service. I suspect there were many others

Instapaper fan here. Used the web app like crazy, wanted to support Marco so I bought the $5 app. No regrets.

First, "I did X, then Y increased, then I did X again right before Z, which clearly increases Y, happened, and Y increased again!" is not empirical evidence, and many of Marco's conclusions were very dependent on (I think unreasonable) assumptions that were based on his gut feelings.

More importantly, the argument of "he'd lose customers if he removed the free app" is about long-term, future effects. I perceive that Matt is trying to say that, say 1 year from now, the paid Instapaper app will have fewer customers if there is no free app in that interval than it would have if the free app had existed in that interval. Of course, this is fundamentally impossible to test, and is based on gut feelings, but it was not disproven by any "empirical evidence" presented by Marco. But it's no more unreasonable for any of us to have a gut feeling in this respect. Personally, I believe a lot of Marco's rationale, and do think that he's better off now without a free app, but he certainly did not prove this conclusion.

I agree that I've not presented the best argument. And to be honest that was not my intention. I was just stating what I felt (as you acknowledge).

But I stand by what I said earlier: he will lose some very good customers. I didn't mean he will lose all, but some. He knows that, and is willing to accept it and is betting on the fact that the number is very low.

From the article: "If I don’t have a free app for a long time, I’m certainly going to miss out on some potential long-term conversions. But how many, really, and what would it cost to chase them?"

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