Pricing is Marketing: Understanding the Pricing Process for Web Apps

By Lincoln Murphy, Managing Director
Sixteen Ventures

“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.” – Peter F. Drucker, Innovation and Entrepreneurship

SaaS and Web App companies often charge their customers based on usage in an ongoing or recurring fashion. This can be subscriptions, usage, credits, etc. and is generally their primary revenue stream. This is the typical “pay as you go” model everyone is familiar with.

It is recurring revenue that is primarily responsible for Software-as-a-Service or SaaS becoming so disruptive against legacy software companies and their outdated licensing and pricing models. The ability to pay for a product or service over time makes it more attractive to the customer and results in more predicable revenue for the company and their investors.

(Recurring Revenue is only one of seven different revenue streams available to SaaS & Web App vendors as identified by Sixteen Ventures – download the 7 SaaS Revenue Streams PDF for details on the other six).

To make recurring revenue work, what a SaaS or Web App company charges the end-customer must be aligned with the market position of the company as well as with the end-customer; how they buy and what they’ll pay. Unfortunately pricing is one of the least understood elements within a SaaS or Web App company. For startups with no time in the market, it is even more difficult to figure out since there is no historical transaction data to analyze.

One common non-market or non-value driven method for developing a price is the bottom-up method. Using this method a company will figure out their cost and try to apply a profit margin to come up with pricing. To illustrate why this isn’t ideal, consider the incredibly simplified idea of trying to get to a 35% net margin because you heard that is a good margin for a SaaS company.

If it costs you one dollar to acquire and support the customer and you add 35% to that, you’ll meet your margin goal. Now scale that up in your spreadsheet and you’re in business, right? No. You’re missing a big piece and here are a few scenarios to illustrate the point:

  1. You charge $1.35 for your service knowing you have a built-in 35% net margin and find that no one will buy your product. It turns out the market will only pay $0.85 for what you have to offer. And they don’t care that it costs you $1.00 to land a customer (Customer Acquisition Cost) and to support them. They will only pay $0.85. How do you deal with that knowing that your cost is $1.00?
  2. You charge $1.35 for your service knowing you have a built in 35% net margin and find that everyone buys your product. It turns out the market would have paid $5.00 for what you have to offer. Since you consulted your spreadsheet and not your market and potential customer base, you left a lot of money on the table and positioned your company as the low-price leader.  Many people think that you can just raise prices, but how does your self-created low-end market position affect your ability to do that?
  3. You charge $1.35 for your service knowing you have a built in 35% net margin and are in-line with how your competitors have priced their solution. But you find that no one will buy your product. In this case you consulted your spreadsheet and the competitors’ websites, but again, not your market and potential customer base. How will you deal with this misstep?

These scenarios can play out all day long. The lesson from all of those is to not only rely on spreadsheets, formulas, or competitive intelligence to come up with pricing. You need to know how your customers will buy, what they’ll pay, and how they’ll pay. If you don’t know those three things intimately, everything else, including your financial modeling is worthless.

Rule number one about pricing: it is marketing. Pricing is one of the 4 P’s that make up the traditional Marketing Mix, along with Product, Promotion, & Place (distribution). This means that your product or service pricing must be part of an overall pricing strategy, which must be part of an overall marketing plan. An effective pricing strategy must go beyond simple financial modeling and include distribution, sales methods, positioning, market segments, etc.

For a SaaS or Web App company that uses an automated sales process where marketing, e-commerce, and application functionality are tightly-coupled, getting your pricing right is even more important since there is not a sales person to negotiate, convince or otherwise defend your pricing. For those companies, the Pricing Page is something by which their company will live or die. To that end, we have recently introduced our Pricing Page Tune-Up™ service to help SaaS & Web App companies optimize the most important page on their marketing site.

The keys to increasing the effectiveness of a pricing strategy are to know and understand the following items before you develop it:

  • Your Pricing Strategy Goals – Market Position, Hyper Growth, something else?
  • Ensure Market Alignment – Know how they buy, what they’ll pay, and how they’ll pay
  • Market Segmentation – Do you have one-size-fits-all pricing, is that the right strategy?
  • Distribution – Will you sell direct or through channel partners or App stores?
  • Sales Model – Do you have a sales force or will you use an automated process?

After you’ve come up with those items and dive back into your spreadsheet to work on your financial model, keep the following in mind:

  1. Pricing is Marketing
  2. The market doesn’t care what profit margin you want to make only what they’ll pay
  3. Don’t copy 37Signals pricing page

Lincoln Murphy (@lincolnmurphy on Twitter) is Managing Director of Sixteen Ventures, where he works with SaaS & Web App companies on Business Strategy, Revenue Modeling, Distribution and Pricing Strategy – including the new Pricing Page Tune-Up™ service.

Three dot Friday

(Various short items in the Startup/MicroISV world I’ve bumped into this week, paying homage to Herb Caen.)

… When Geoffrey Moore talks, startups should listen. Geoffrey, author of Crossing the Chasm, Inside the Tornato and Dealing with Darwin, is a must-read if you want to get your head around the stages of growth for a startup from bedroom to boardroom. Here’s a recently-made available video from last year’s Business of Software Conference. Hope to see you in Boston for the 2010 confab.

… Speaking of reading, do you have too much of it? With ever more books and more ways to get them (think Kindle; iBooks doesn’t yet have a Computer section – sheesh!), sometimes you’ve got to cut to the chase. That’s why Dr. Doug Green is your new best online pal. Doug, an educator for 30 years now with time on his hands, crafts excellent summaries of hot business, technology, and education books, and gives them away for free. I know of at least one author, Dan Pink, who’s endorsed Doug’s summary. Cases in point:

Lean Startups and Startup Visas are two of the hottest topics in the startup world today. Is there a better way of doing a startup that the “tried and true” approach that creates a few winners and multitudes of losers? Should the US change its visa rules making it way easier for startup founders to come here to build their companies? What do they have in common? Eric Ries, who’s Startup Lessons Learned Conference in the City by the Bay next Friday will be simulcast to no less than 20 cities globally. Eric is also a major force in the Startup Visa movement. Busy guy!

Pat and I will be talking to him Monday April 18th to get updates on both hats he wears, and we’re also interviewing Rep. Jared Polis, who’s sponsoring the bill in House re why it’s (presumedly) a good thing and why anyone smart enough to launch, build and sell three Internet startups wants to sit in the same chamber as Rep. Michele Bachmann. Got questions for “the dot-com congressman”? – leave them here or pick up some good karma points over at

… And finally, just when you’ve reached overload with me-too and silly game iPhone apps, there’s this: Autism iPhone breakthrough: from tantrums to app-y days. Seems there are developers out there who want to make real differences for the better in people’s lives. Good on you!


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MicroISV Digest – 04/9/2010

Community News:

  • Eight free scholarships to the “Startup Lessons Learned” Conference – On April 23 the first Lean Startups conference happens in San Francisco, and the organizers have made available eight scholarships to startup professionals who are interested in attending the show. The scholarships cover the full price of conference registration, valued at $699 for the “early-bird” registration. The confirmed speaker list is a who’s who of the Lean Startup movement, including:
    • Eric Ries, The Lean Startup (@ericries)
    • Kent Beck, Three Rivers Institute (@kentbeck)
    • Steve Blank (@sgblank)
    • Randy Komisar, Kleiner Perkins Caufield & Byers
    • Andrew Chen, Futuristic Play (@andrew_chen)
    • David Weekly, PB Works (@dweekly)
    • Hiten Shah, KISSmetrics (@hnshah)

    If you’re interested in applying, send an email to before midnight on Monday, April 12, 2010 describing (in 500 words or less) who you are, how you are using (or intend to use) the lean startup methodology and how the scholarship will help your company. Selected recipients will be notified by Friday, April 16, 2010. More info.

  • Jordan Osher, Meet The Famous, Inc., recently launched this crowdsourcing celebrity photo agency. Get the shot, upload it, they sell it for you and you get paid.
  • Richard Nichols,, has released qikTweet for the iPhone/iPad. qikTweet is for those situations when you want to get your tweet out faster than waiting for your usual Twitter client to start, load your message feed, any new messages and anything else it needs to do.
  • Interesting questions with useful answers:

    News/posts for microISVs and Startups:, The Startup Success Podcast and other plugs:

    • No new Guides at (I’ve been on a programming deathmarch the past month, striving to finish 2.0a):
    • Show #63 [link] [iTunes]. Bob interviews Jason Fried, co-founder and president of 37signals and co-author of Getting Real and now REWORK. Jason is the archetype of a successful web-based software company founder (Basecamp, Highrise, Campfire, Backpack), a strong proponent for a reality-based (versus VC-funded) approach to building a tech company with a point of view, and a strong believer most of the accepted ways of doing business don’t scale down to startups.

      In this interview, we dig into not just Jason and David Heinemeier Hansson’s new book about the business of startups, but why and how they arrived at 37signals’ successful approach to building a software company. Jason generously shares a range of advice and experience about building your startup that is anything but a rehash of all the other advice you’ve heard.

    • Show #62 [link] [iTunes]. Bob and Pat talk with Paul Pluschkell, CEO and cofounder of, an innovative startup that is transforming social media, innovation and idea creation in large enterprises and other companies. What happens when social media reputation building, leaderboards, voting ideas up and down within a company meets companies like AT&T, Walmart and Southwest Airlines? The results may surprise you.

      Paul shares some very useful advice for startups selling to enterprises as well, and offers a perspective from a vantage point few enjoy on how social media is going change the workplace.

    • Show #61 [link] [iTunes]. This week Bob and Pat conclude our interview with Daniel Pink, bestselling author of Drive: The Surprising Truth About What Motivates Us.

      In this show, we quiz Daniel on why public education systems don’t teach how to select your own motivation, how organizations can build that into their business DNA, get some answers for questions for Dan posted by our listeners, how he personally integrates work and personal time, and more.

    • Show #60: [link] [iTunes]. This week Bob and Pat start an interview with Daniel Pink, bestselling author of Drive: The Surprising Truth About What Motivates Us.

      If you’ve ever wondered why sometimes when doing creative work you’re highly motivated and other times unmotivated, this is part 1 of a 2 part interview that may profoundly change your life.

      The scientific research and conclusions Dan brings to the modern business world go a long way to explain why some startups founders succeed, others run out of steam, why some companies will succeed and others fail as we continue moving to an world based on creating ideas, not running assembly lines.

    (If you have an announcement of interest to your fellow microISV, indies or startups, please email me at with the word digest in the subject.)

    Three dot Friday

    (Various short items in the Startup/MicroISV world I’ve bumped into this week, paying homage to Herb Caen, the best damn reason to read a San Francisco newspaper, when people still read newspapers.)

    … March showers have given way to April showers in the soggy San Francisco Bay Area – take a moment to sympathize with all of shivering people who will be in line bright, early and probably very wet to pick up their Apple iPads in person Saturday. Forecast (according to my Weather Channel iPhone App): A mix of clouds, sun, naysayers and media pundits who don’t get it, followed by jaw-dropping shock after your first 10 minutes with your own iPad. Okay, I’m a fanboy. Stephen Fry is a fanboy – and a great writer too (even if Time still does popup ads – sheesh!). But he’s right. And, I think I will be right – welcome to the Revolution.

    … One down, one up: Go Test It, the automated cross-browsing startup we interviewed founder Martin Kleppmann for on the Startup Success Podcast (shows #46 and after he sold the company, #47) has shut down. On the other hand, Martin and two cofounders have fired up – it’s a cool Chrome/Firefox extension that replaces the vertical column of ads in Gmail with a widget that’s part social media lookup and part your own private CRM – something that is immediately useful.

    … Speaking of podcasts, a few listeners recently have taken me to task re my speaking skills (or lack thereof) on a few (many) of the episodes. That hurt. Especially since it’s true. When you’re in pain, you put aside your pride and get to the Doctor, in this case Dr. Ann Utterback, PhD a voice coach to mainstream media. Ann has been turning vocally-challenged people into professional broadcasters for a very long time – and now she’s getting with the times and offering podcasters like me great advice on how to upgrade the noises coming out of our mouths. If you do a podcast, or training/demo screencasts or talk with customers, this is advice worth listening to.


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    There’s an app for even that…

    FOR RELEASE APRIL 1, 2010:
    Corey H Maass, web developer and press contact
    Brooklyn, NY, April 1st, 2010 – A brand new customer-focused, interactive web 2.0 application launches today, offering help to people having a midlife crisis. The site,, is designed to help the 1-in-4 adults over 35 who go through a timely self-examination or identity crisis.
    However instead of “treating” a midlife crisis, the website indulges it. Nicole Harris,’s CEO says, “People are going to have affairs, buy speed boats and date people half their age. Why not help them do it better? We’re leveraging new web technologies to help people get their lives back on track. Or further off track, if that’s what they want.”
    The variety of tools, for managing affairs, budgeting for a sports car, and more, cater to the most common symptoms of the midlife crisis. The site offers three plans, “Divorcee”, “Desperate” and “Bender”, with each offering more features.
    The site was designed by Brooklyn-based web-design company Gelform ( ) as a portfolio piece.
    For questions or comments please contact:
    Corey H Maass, web developer and press contact
    Can’t wait to see the post-midlife app. Happy April Fool’s Day everyone.

    New: 130 Microsoft WebsiteSpark Scholarships.

    Microsoft WebsiteSpark is sponsoring 130 six-month full scholarships to for professional web developers and designers.

    Here’s how it works: if you’re a web designer/developer delivering sites to customers and you have less than 10 employees, I can now sponsor you for the Microsoft WebsiteSpark program. And if you live in the U.S., Microsoft is sponsoring as of today those 130 six-month scholarships to (regular price: $105 for a six month subscription).

    More info at:

    Even if you are perfectly content to be a professional web designer and have no intention of building your own software, I think you’ll find the 50 (and growing) Guides at S2D useful, as well as getting quick, useful feedback when you request Site Reviews from the community. And the Marketing Action Plans coming next month after Version 2 launches will work great for you too.

    And even if you have no intention of leaving open source (I program in Ruby on Rails nowadays… :)), it’s worth having a (nearly) free toehold in the Microsoft World because:

    • You’ll be able to better work with prospective clients using ASP.NET,
    • You’ve seen the new Microsoft Phone demo, and realize there’s going to be a lot of shall we say graphically-challenged (like me) developers looking for professional help soon. Especially if there’s another explosion of mobile apps as there was/is for the Apple iPhone and Google Android platform. (here’s a Mix10 session from Monday on this: Authoring for windows Phone, Silverlight 4 and WPF with Expression Blend)
    • Speaking of Silverlight, version 4 developer release was just announced. If you haven’t looked at Silverlight in a while, things have changed: It prints. It can interact with the user’s desktop (PC or Mac). It supports Google Chrome. And a bunch of other stuff.

    There are limitations on Microsoft WebsiteSpark – for example, you can either be in BizSpark or WebsiteSpark. And you have to reside in the United States to be eligible for the scholarships WebsiteSpark is sponsoring. And, there’s 130 scholarships available – when they’re filled, that’s it.

    If you’re wondering if I can sponsor you instead for Microsoft BizSpark – I can and will. Just check out the requirements, email me or pick me as your Network Partner when you apply through the BizSpark site. You just might be 377th startup I’ll have sponsored for BizSpark .

    That said, I’ve been working pretty hard to making the Microsoft WebsiteSpark Scholarships a reality because sometimes, all you need is just a bit of help and someone to believe in you to get your startup off the runway.

    MicroISV Digest – 03/13/2010

    Community News:

    • Pretty quiet out there…

    Interesting questions with useful answers:

    News/posts for microISVs and Startups:, The Startup Success Podcast and other plugs:

    • No new Guides at (I’ve had my coder hat on, finishing 2.0a):
    • Show #59 of the Startup Success Podcast is up:  [link] [iTunes]. Should there be a special immigration visa for non-U.S. startup founders? We grill Eric Ries of about the federal bill he and thousands of VCs, Angels, Silicon Valley notables, IT people, and others are supporting, tweeting and advocating.

      Pat and Bob robustly question Eric on exactly how the Startup Visa would work, what it will and won’t do, how this VC/tech community political movement got started, and can social media become political action and even national policy.

    • Show #58 of the Startup Success Podcast:  [link] [iTunes]. Bob and Pat talk nuts and bolts, billing and bookkeeping with Greg Jones, CEO of Bookkeeping Express. A startup is a business and an outsourced, tech-aware, certified bookkeeper using a state-of-the-art online accounting system can do bookkeeping tasks better, and save you money at the same time

    (If you have an announcement of interest to your fellow microISV, indies or startups, please email me at with the word digest in the subject.)

    Stop hitting your Invisible Wall.

    The Invisible Wall stopped you creating your startup today. That damn wall stands between you and what you know you can create.  That wall you hit, that something, that changes you into a totally unmotivated blob.

    Why, when you know you should be motivated to write the code, go to the networking event, make those calls, write the blog, do you sit there instead, with the motivation sucked out of you, reading Twitter?

    Remember when you were all fired up to build your own startup? It was a totally cool challenge that could become anything, it was going to change the world, or at least a part of it you cared about. So what happened? You hit the Invisible Wall. And touching that wall turns all that fire you into dead ash.

    What happened is your intrinsic motivations to be your own boss (autonomy) , master the challenge of writing a real commercial app (mastery) and change the world (meaning) got swapped out for extrinsic motivation.

    You slipped from “oh Wow!” to “oh Shit!” – tumbling back into the Carrots and Sticks extrinsic motivation you’ve known at every job. Work harder, longer, faster, smarter! Get done or get fired. You’ll make a ton of money, but only if you work. Get to work and create, or you’ll go broke.

    Carrots and Sticks de-motivate creative work. It’s like passing the wrong type of arguments to that part of your brain that creates. Intrinsic, self-directed motivations – the desire to be your own boss, to beat tough business and IT challenges, to do something that matters, not just exist, that’s the fuel you need.

    Of course the bills don’t go away, nor does the giant pot of gold you might just get. But the more you focus on those sticks and carrots, the thicker, higher and harder the Invisible Wall gets. You can yell at your self, kick your own butt around the block – “You’re Worthless!” -  reorg you office, revamp your task tracking system, declare email bankruptcy, light a candle, say a prayer – and it doesn’t work.

    Don’t believe me? Try this thought experiment the next time you’re about to sit down to write code, a blog post for your business, or do whatever you do that builds your startup. Forget about the money. Forget about the bills. Forget about whether you deserve or are capable or are too slow or whatever carrots and sticks you’ve been using on yourself.

    Instead, think about the challenge of making the code work, writing the post a post that connects. Think about how every line you write brings you closer to deciding your own fate and not taking “suggestions” from managers. Think about the difference you’re going to make in the lives of the people who use your software.

    That’s the motivation you need – it’s like rocket fuel.

    I didn’t somehow discover this myself out of the clear blue – I read Dan Pink’s book, Drive: The Surprising Truth About What Motivates Us It radically changed my daily battle with my Invisible Wall. And then Pat and I interviewed Dan 3/7 for an amazing 80 minutes – and the first (of three!) parts of that interview we hope to have out tomorrow for the Startup Success Podcast.

    Sometimes you get lucky in life – and sharing that with others quickly in the same boat is a good thing to do.

    Three dot Friday

    (Various short items in the Startup/MicroISV world I’ve bumped into this week, paying homage to Herb Caen, the best damn reason to read a San Francisco newspaper, when people still read newspapers.)

    … Over at A Smart Bear, Mike Schoeffler, founder of iPhone running application Roadbud has an excellent column about Startup Fitness with some easy online ways to start and some excellent comments. If you think VC/Angels fund overweight/obese developers, think again.

    InfluAds is Anibal Damiao’s, new advertising network where one small ad runs on your startup or web development site, and you make enough to fund your iTunes habit. Anibal, Portuguese, went up to Denmark 3 years ago for his MBA and is now launching this cool and tasteful ad network. He hates the weather in Denmark, but says it builds character. Since I’m signing on to run an ad here and the Startup Success Podcast starting in April, and I hate advertising with a passion, there may be something to this character building via freezing weather stuff.

    Ever been to an O’Reilly Ignite event? Me neither – I had no idea what to expect. But since O’Reilly is based here in non-tech Sonoma County, and I hoped to meet some of the people on the book side of their company (the author itch is starting up again), I figured why not, at least there would be beer available.

    What I got were cool tech and non-tech people into creating and sharing ideas, a chance to meet a personal hero of mine, uber-podcaster Leo Laporte (who gave one of the 5 minute/20 slides/go presentations, on Advertising is the Sickness and New Media is the Cure.), a special guest for the podcast soon and a great tavern, Hopmonk, to recommend. Nice!

    Customer Dis-service and its antidote. I live up on a hill  that has no cable, no gas and a tenuous link to the AT&T DeathStar through one box at the foot of the hill, the inside of which is has about 10x more curcuits than it should. If someone adds a DSL line, a second telephone line or bluejay alights on this box, somebody else gets grief. This morning as I was about to welcome the newest member of to the fold (plan on personally connecting to your first 10,000 customers), dead goes my business landline, dead goes my connectivity.

    So, I do what we all are stuck doing – first I get AT&T repair line’s # via my iPhone, because after all, no one would use their AT&T mobile to call AT&T business, they should go to the web site… then spend 20 minutes on hold and 2 minutes talking to the nice lady who agreed with me there actually was something wrong with my landline and I wasn’t a congenital liar, but could do nothing but schedule a service call and then subverted The System by connecting me to the DSL repair line because “they can do things we can’t.”

    After 60 minutes of listening to dueling/overlapping pronouncements that I should visit AT&T’s web site for “faster service” and did I know you can put parental controls on you Internet service?, I get a nice AT&T DSL Service Representative who mournfully,firmly and repeatedly informs me first AT&T has to fix my phone service before he can do a thing. Click.

    To say I was in a piping hot, road-rage state by this time is an understatement. So I did the un-consumer thing  – drove down the hill to see if there was an actual competent repairperson who, you know, did things. I can’t tell you the glee in my heart and the words I was yelling in my car as I spotted not one, but two repair trucks at the switch box. I wanted satisfaction, answers, service damnit!

    “We know,” was what the repairwomen who got out of her truck and came over to me before I could say a word said. “Our supervisor is dispatching a DSL tech to fix this since we can’t, but wanted us to stay here and answer questions until they arrive – about 25 homes are knocked out. Sorry about that.” My boiling rage at being treated like I was nothing by human robots mouthing scripts evaporated instantly because here was a person treating me like a person. Stuff happens, fuses pop, no big deal when you don’t add insult to injury. It’s high time large companies remember that.

    (Like this post, hate it – let me now now. Thanks.)


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    The 10,000 Most Tempting Software Startup Categories

    Dharmesh Shah has a great post up today at OnStartups: The 10 Most Tempting Software Startup Categories. I won’t steal his punchline by quoting all ten here, but the first 5 are:

    • Project Management / Time Tracking / Bug Tracking
    • Community / Discussion Forums
    • Personalized News Aggregation/Filtering
    • Content Management (website, blog)
    • Social Voting and Reviews

    These 5 – and the other 5 – are the low hanging fruit, the low barrier to entry app categories that are a easy first grab for the firsttime startup (my first app fit squarely under project management; is a variant of #2). People will say these kinds of apps have for the most part been done to death, but paradoxically that these are the only kinds of apps that will reliably sell, so stick with the “tried and true”.

    So how do you explain a Various VC’s seem to be bitching and moaning that Mint founder, Aaron Patzer cashed out for “only” $170 million when he sold to Intuit (“Don’t “Pull A Patzer” And Other Lessons Learned On Our Trip Down Sand Hill Road“).

    Why is this so bad? “Here’s why: with large funds being raised on Sand Hill Road and returns from previous funds underperforming, investors are becoming increasingly desperate for that single homerun investment that returns $1B or greater. Even though was a huge success for the founder and team, generating $60 million in equity value per year, many VCs believe they sold too early and left too much potential value on the table.” (props to Rob Hayes at First Round Capital for having a good laugh at this kind of nonsense.)

    And how do you explain all those iPhone Apps? One news report puts the number at 189,000.

    I think that what the VC Mavens are missing, and why Dharmesh’s list of 10 Tempting Software Startup Categories is good but incomplete, is it’s 2010, not 2005 or 1999 anymore. Three forces made possible by the Internet today means there are literally thousands of Most Tempting Software Startup Categories out there for the taking. Those forces are:

    • The demassification of the more developed societies. Which is a fancy way of saying that markets, categories, conventions, convictions and all the other “mass” things that worked throughout the 1900’s are increasingly irrelevant to more and more people.
    • The changing nature of software: a decade ago, would I have paid an extra $50 bucks when I bought a digital camera that had the option of doing a cat growl so my cats would look at my camera? Of course not, nor would I have found it for sale. Yet I bought exactly that app for my iPhone a month ago – for $1.99. The great secret of the iPhone’s success is not AT&T (which sucks), or Apple’s “specialness”, it’s that my iPhone is a Kindle reader, Mint interface that let’s me set what will record from DirecTV while I’m brewing my premium tea and entering my calories for lunch device. And you iPhone is something entirely different. The Apple iPad is the next generation of whatever you want it to be computers.
    • Digital people have digital problems and need digital solutions. Whether it’s remote support for my cranky copy of WordPress or coping with Twitter, or doing cash flow when I sell nothing tangible, let alone have a “real job”, more and more people live in the Digital World, and care very little and connect with only minimally to the old industrial economy/society. Want to sell me a new toothpaste? It had better be on, come with a social network and have an iPhone app. Mass apps – spreadsheets, word processors etc. made sense then. They don’t now.

    It’s time for “traditional” VCs and the (now online) trade press to understand they need to get with the times, and it’s a great time for developers to become startups who neither want or need to play by the old rules.