It is so true, and so weird at the same time. Why the investment in research time for the app and the disdain for the coffee which will pass through your system roughly 45 minutes later? Makes me wonder if they should charge $19.99 for the app and offer a 'trial version' for $4.99 which lets you see if you want to buy it with no expiration date.

With Coffee you know what you are getting and know that at a minimum it will supply enough caffeine to give you a mid-morning perk. Almost all coffee shops provide coffee that is consistently good enough that it won't taste disgusting so the process is an evolutionary one, if you find a better coffee shop that is only slightly further away you will just go there from that point on.

The problem with buying apps, especially on mobile stores is that I've bought several (even well rated ones) that either do not work at all on my device or are close to useless for my purposes. Since many apps don't offer trials and the android store return policy doesn't give you enough time often to make an informed decision of whether or not to keep an app you do have to do your homework or you risk throwing $2 away.

$2 isn't allot of money but it is for something which is 0 use to me, a $4 coffee even if it's not the most delicious will at minimum provide a caffeine fix. I can think of a few occasions on the android market where I have spent $10-15 just buying a variety of $2-5 apps that supposedly do the same job in order to find one that I actually want to use. I can reduce this cost significantly by doing some research although an hour would seem excessive in most occasions 15-20 minutes may be reasonable.

There's basically no opportunity cost to picking the "wrong" coffee. It won't take you longer to drink, will probably give you the same amount of caffeine and just won't taste quite as good as the "right" one.

Apps can require a significant time investment to learn/use them. There's also a potentially large opportunity cost to picking the wrong app. App store searching kind of blows, without some invested time, you can't even know which one is the "right" app for you to spend some time on. Though I also agree that 15-20 minutes is much more likely than hours of research.

The $2 isn't the point, it's the cost after the purchase that you're spending time to make sure it isn't wasted.

My hypothesis is that the bigger question is really one of expectation -- whether the app accomplishes exactly what the user expects it to do (not what the app markets itself to do). The more complex the expected result (ie. coffee -> coffee hit, fart app -> laughs, conversion calculator -> converts stuff, your nifty social app -> ?) the more doubt people have in just throwing down money (regardless of how "small" the amount).

Starting with the latter: people who drink coffee mostly see it as near-daily consumption. If they're thinking about it at all, they're not thinking about "will I have coffee", but rather "which coffee to have". On the other hand, many software buyers have "don't buy anything" as a very real possibility in their minds. If I "have to buy it anyway", the difference between $2 and $4 per day doesn't seem important because people are surprisingly bad at multiplying by 365.

Coffee also presents a much less complex competitive landscape than software (which is not to say it is less competitive; I strongly suspect the reverse is true). As far as I can tell coffee shops can compete on price, location, ambience, brand, and flavor. My guess is that, above a fairly low bar for flavor, location is the dominant competitive attribute. "Am I going to walk an extra block to save $1?" Again, people don't know how to multiply by 365. I suspect coffee shops strategize thusly: "I'll get whatever customer base is closer to me than to competitors, and fighting on price is pointless. I might get some marginal purchases by improving branding and ambience, thus persuading people to stay longer and buy more." So everyone pays $4 at the nearest half-decent coffee shop and all is peaceful in the universe.

Software, on the other hand, is an incredibly complex offering and I think that complexity leads to a perception that diligent consumer research will be rewarded with enhanced satisfaction or reduced expenditure. The problem here is that the reduced expenditure is easy to quantify and guaranteed prior to purchase, whereas the enhanced satisfaction is poorly quantified and feels uncertain unless you're dealing with a market-leading strongly-branded product like Angry Birds. So, unless your'e buying Angry Birds, you'll spend some time looking to see what other apps are cheaper with "the same" features.

Hm. I feel like even after three rounds of editing I've achieved a very low insight-to-sentences ratio. Sorry :-)

A paid app might or might not deliver the functionality, and if it doesn't, after one $1.99 app purchase you need to buy another app, and the first one is a realized loss. Psychologically we don't react well to realized losses.

As humans we are more comfortable fitting in or following. When you go to a coffee shop or a crowded store, you're buying something because you actually see others buying it. The decision-making aspect is "taken away" from you, as it was already done by people at large. There is also the element of human interaction with the barista. It's much easier to spend $4 this way.

Yes, at the coffee shop you also might have an immediate purpose -- like chat with a friend. But even when I am alone, spending $4 doesn't seem like a big investment. It feels and seems normal. And note that this doesn't have to do with the quality of the product.

In the meantime, when you're at alone and are browsing an app store, the burden of decision making is on you. In essence, the thought process is "am I making a good decision? is it normal to buy something like this? do I really need this?" With that, $1 can seem like quite a bit when you have time and solitude to decide.

Buying coffee is not only a social activity, it's something that's seen as a sociable thing to do.

Buying apps is indeed a solitary activity, and - despite the burgenoing marketplace - is still something slightly outside of the mainstream.

I suspect there is trust issues here - the average app isn't well trusted as opposed to the average cup of coffee - as well as exchanging money for a virtual thing as opposed to a physical.

edit : thinking further about this - the top n listings are just like the coffee queue. It's self reinforcing because you see other people are buying the app, which overcomes some of the trust issues. We all think - well, all these other people bought it, must be something OK about it.

The problem this brings about is the self-reinforcing top of the market which becomes harder for others to break into.

The apps that have been successful on a grand scale are typically ones you want to immediately show off to your friends. You are not buying entertainment or utility, you are buying a conversation starter. That is where the value lies.

I see more hospitality industry sites are doing this in the last years, e.g. booking.com.

That's not to say that buying an app can't become a daily routine, of course. Anything is possible. But it seems unlikely for most people.

For me, part of the problem is family budgeting. As long as I only do it a few times a month, I won't have to justify $10 for lunch to my wife. Even though going with a $2 lunch and buying the $8 album would be spending the same amount of money, in practice I'd still be trying to justify the album purchase.

Clearly that sucks. But there's a pretty good reason for it. If we weren't budgeting, my wife and I would probably buy 20-30 albums a month, and that we cannot afford. So clamping limits on albums makes very good sense. But it definitely feels like it leads to non-optimal use of money overall -- we're keeping to a budget, but perhaps not spending the money as well as we could.

Got to ask - you don't budget Wendy's? (Hardees is a better choice anyway:)

I don't think it's anything to do with marketing. I just grabbed Wendy's as an example, but I also recently ended up at a relatively fancy restaurant I'd never heard of before walking in their front door, and I spent more on a single glass of wine there than that album would have cost. On some level, I think it comes down to feeling like food is a necessity and buying more music is not. But at the same time, if you'd offered me the choice ("Don't buy the wine and you can buy the album") I'd have taken the album for sure.

BTW - I did buy Shift Jelly's PocketCasts app from the Android Market for something like $2.99. I highly recommend it, the app has un-tethered me from iTunes podcast syncing. Now I just download/stream exactly the episodes I want to listen to.

The app has some rough UX edges regarding behaviors of the back button, etc, but I'm going to write the developers about that.

They'll drive all over town just to save $20 off their grocery bill by using coupons.

But many won't spend 15 minutes haggling over the purchase of a car where you could gain thousands just by doing some research and getting the best deal for yourself. They'd rather just get the unpleasantess over with as quickly as possible.

The key, of course, is to enter markets where people value their time more than their money. As soon as you start dealing with customers who value their money more than their time, you've hit the treacherous shoals of business.

It makes some amount of sense. If I were to impulse-buy every app I saw under $5 that looked like it might be fun or useful, I'd be spending many thousands of dollars a year.

Before World of Warcraft came out, I budgeted $50/month on computer games. In the sense the budget was 'committed' in that I had already taken into account spending it, and treated it like an entertainment expense. So spending up to my budget in any given month (with up to one month carry over) I found one could 'impulse' buy without a lot of guilt while not losing control of ones budget. Worked pretty well.

Of course now I don't have a system to play those Win98 games :-(

You also have a shop full of other patrons purchasing and appearing to enjoy the coffee.

Shopping online, you normally have neither of those cues. Reviews help somewhat with the latter. Strong refund policies (including the case of "didn't do what I needed it to do") would help with the former.

Apart from that, I don't see it as particularly rational to research a $2 purchase extensively, but on the other hand, when you care about specific functionality, it might make sense to do a bit of research rather than buy every plausible-looking app on the market and see if it has the feature you want.

I wish all reviews on the app store showed how long the reviewer used the app and how many times for this reason.

Maybe the fact that there is so much choice available, be it apps or websites, that it makes it much more tempting to shop around - or just being baffled by choice. You can't make a bad decision if there's no alternative.

Secondly, a bad app is not the equivalent of just bad tasting coffee, it's coffee that tastes like lemon and makes you puke. It's hard to make coffee that doesnt taste like coffee, while it's easy to make an app that promises one thing and delivers a completely different one.

Third, an app can be malicious, will stay in your system for ever, and the endorphic rewards from it are usually long-term and come in bits. Caffeine reaches your brain within minutes.

The only way I might do that is if the app also requires a large time investment. Or if I'm trying to find a new game to play from among thousands. In either case, I'm clearly getting a lot more than $2 of value from the research.

Frequently though, I will just buy a game after hearing about it somewhere and then spending a few minutes looking at the screenshots reviews.

So maybe not $2. But consider the most valuable asset anyone has: their time. So easy to squander, an hour is much more valuable than $100.

Value comes from the amount paid vs the perceived value gained from getting the object. Something along that line. I learned it in a marketing class.

Just because you can afford a $100 watermelon doesn't mean you have to. Same thing as a $4 coffee or a $2 app.

The concept of perceived value is very important, more so for luxury goods and services.

I really hate when I buy a cheap item that breaks either as a gift or that's hard to get rid of... cash outlay isn't the only cost in purchases.

No, I don't care much about software devs not making enough money in the banks. No, I am not rich, though I have more saving than most people my age. In fact, they're probably in debt.

I don't feel particularly bad for writing open source software for free or scratching my itch for free, even though I am a horrible competitor. They probably can beat me in sales technique and make more money than I ever will.

I recognize being in the software field is an honor, a blessing. It's not something that we have a right to be in. We die or live by solving people's problem and then making money off of them.

I don't recognize piracy as a moral issue, but simply a business model problem, no matter how big of a problem it is.

Additionally, it's pretty clearly not an outright lie: you only have to look at the successful ecosystem of free/open source software, and the companies which live on it, to see that it does work. Perhaps it is an exaggeration, but it is no lie.

When push come to shove, I'll probably stays on android even if the world around me all use iphone just like I use archlinux everyday. Granted, I am in the minority.

However, there is actually a way he could have made money: if somebody wanted a weather app, they could have hired him to write it. This could plausibly either be a carrier seeking to make their phone more attractive or whatever service provides the weather data seeking to make it more accessible. On the one hand, the amount he could possibly make from something like this is limited; on the other hand, the risk is also limited.

The problem with your argument is that you're starting with the assumption that a weather app--particularly one which, I assume, does not get its own data--should be worth a significant amount of money. Just because it would not necessarily be practical to sell the app does not me it would be impractical to make a living as a programmer.

Nobody will pay the 15k or whatever it costs to have a custom app developed just for a weather app, even if people find it useful. So, the traditional (and common sense) model was to split the costs over all people who would be interested in such an app. The developer would take the risk, develop and market it, and people would pay for it; and once the development costs were covered, the profit was for the developer. Simple and, if I may say, quite reasonable.

But now you come and start with an assumption that the app should be free, then the business becomes untenable and the app won't be developed in the first place, and you say that maybe that's how it's supposed to be? How does that make sense?

Secondly, my point about money was based on the fact that, in the same article, he admitted to being in the red. If he is losing money on this model, the assumption that any reasonable model will lead to his making money is unwarranted.

Finally, I don't see why nobody would pay to have a weather app. Plenty of companies give such things away for free right now; I see no reason it would not be carried over to Android. For an example, just search for "weather" on Google. While this is not open source, it is free so from an economic stand-point it is almost equivalent. Additionally, I could definitely see somebody like Samsung funding this in order to add a "feature" to their phone. Besides, there are actually several free and open source weather widgets for KDE, so it's clearly practical to have them.

On a completely unrelated note, there really seems to be something about the free software movement that engenders straw man arguments. Perhaps some of its supporters are too zealous, or maybe the arguments behind it are insufficiently clear. Or maybe it's just that most people don't really understand what it's all about.

In essence, you're paying for the convenience and the UI over the free version of the same data on the internet.

That's valuable, up to a certain point, but not $50 valuable.

In this instance, I know, because I have that same app.

I think selling upgrades to apps would partially help, as it would encourage updates due to the possibility of recouping the costs from an existing customer base as well as allow the app to meet multiple points along a price/functionality curve.

They could release source code and sell it anyways. The problem there is that someone else could compile it and sell it on the app store to undercut him. I'm not sure what kind of recourse (if any) the developer would have in such a situation, thus I doubt releasing source is viable.

The rich benefactor idea is clearly in jest, since such arrangements are rare. Yet, corporations pay people to work on open source code. As long as the business can get their value out of a piece of software and it isn't core to their business model, there is very little reason why the code shouldn't be able to be open.

Regardless, I don't think the indie developer cares about software freedom, they just don't want to be pestered by free software advocates. They don't see anything wrong with their business model so even if there was an alternative (and there is very little in the way of alternatives except to look for customers to pay and then develop the app instead of the other way around), I doubt this indie developer would care.

I'm not going to say that the free/open source software ecosystem is not successful, but I will say it is orders of magnitude less successful that commercial software.

So why not go make your own fart or sex app? There's a reason why these apps make it to the top; it's what people really want. Sadly or not, there's always going to be a bigger potential market for dumb, entertaining apps than your average practical app. I'd even go so far to say there's an art to producing the kind of apps that satisfy this segment of the market.

Scipy is a monumental and long-running effort of creating a scientific library for Python. It's an incredibly advanced piece of software that quite possibly saves lives (literally), and has 207 watchers and 78 forks.

It's just what people really want. I'd even go so far to say there's an art to producing the kind of apps that satisfy this segment of HN.

It doesn't mean that they are necessarily better, but the time spent on understanding them are at a complete minimum.

You don't even need to be a technical person to get a grasp of why the spark graphs do.

The challenge of a private business is having to strike a balance between "important" and "intelligible".

Extract data [legally, now!] from some source (eg wikipedia), and skin it with some boilerplate and some generated UI elements. I think it'd be a more interesting project to implement the more general version, and once it's nailed down it's probably a better source of revenue too.

I think Apple as a monopolist intermediary (assuming we are talking about the iPhone market) has more of a role here than this invisible-hand argument implies.

It's Apple's choice to promote a top-N listing, which means that the already most popular apps get even more downloads. Fair enough, you might think, but it's Apple's choice how they count the top N. If they count number of purchases, then throwaway $1 apps will be favored over more substantial, more expensive apps; whereas if they count highest grossing, the more expensive apps will fare better.

- Piracy of Pocket Casts on iOS is about 30% - Piracy of Pocket Casts on Android is about 20%

moving into Android development was a very smart (some might say lucky) move which has enabled us to stay profitable

We definitely need to focus more, but moving into Android was the smartest thing we ever did. We now earn more money there (consistently) than iOS.

When you go to McDonald's (or anyone for that matter) do you get something different every time, or do you get your favorite thing? Same goes for Olive Garden or Cheesecake Factory, did you get the burger last time and the fresh fish catch this time?

Probably not.

To some degree, those fart apps are a known quantity; they make fart noises, so they have the advantage over your app of having their foot in the door for everyone interested.

It seems unfair, but there has to be a strategy there for riding that wave. Hollywood has always done it, did you enjoy Superman 7 or Harry Potter 14?

It doesn't matter, it was a known quantity and eleventeen million people went and saw it.

It seems like SJ is being forced to learn this lesson over-and-over again[2] and I've already shared my thoughts with you about that[3].

Your expectations of what you want SJ to do and exactly how you want it to do it may be too tight. You guys are clearly talented and I wonder if you need some step-back-and-get-a-better-perspective time.

Tom's comment[4] is a great example of what I mean. Does ShiftyJelly want to get into the gun or fart-app business? Probably not... does SJ want $50k? Probably yes.

It feels to me like there is some unexpected pivot in here for you guys to extract; one that you didn't see coming, but one that works out surprisingly well for you.

NOTE: Make the two app references at the end of the article links to the appstore.

[1] http://news.ycombinator.com/item?id=3285771

[2] http://shiftyjelly.wordpress.com/2011/08/02/amazon-app-store...

[3] http://news.ycombinator.com/item?id=2837439

[4] http://news.ycombinator.com/item?id=3284450

I found this comment to be quite insightful. An interesting way to look at it.

Take a look through Github or Sourceforge. Many, many of the projects are people scratching an itch or just building something for fun. We can argue about the exact percentage, but it's definitely more than "very few bits".

The point isn't that all software isn't paid for. Rather, that somewhere, it's costing someone money. And I think that was the point (or at least, that's what I got from it, which is the important part).

Some software costs someone money. Lots of it is built for the sake of building it though. You could argue that time people spend building software could have been billable hours, but I think the author totally misunderstands the spirit of building software for the enjoyment of it.

So was I. And this software is being supported by SF and Github.

> I think the author totally misunderstands the spirit of building software for the enjoyment of it.

Which means nothing.

Consider Linus and Linux. Linux wasn't paid for directly, but don't for a minute think it wasn't supported by someone's cash.

In fact, I challenge you to find me software that didn't use someone's real money (not this billable hours thing you brought to the table for some reason) to get developed at some point.

You picked one example in which someone gets paid to write software, but there are hundreds of thousands of software projects that were written in people's spare time, either for fun or to learn to code or to scratch their own (non-monetary) itch.

Here's a random one from the HN frontpage last week:

https://github.com/holman/spark

I'm not sure whether we're arguing some kind of objectivist semantics game, or if we're talking past each other.

Excellent post!

Psychologically, I find it much more satisfying to be rewarding friends & associates with more tangible things than some dollar amount.

Does anyone know if this model has been attempted before?

I know a dev or two with "buy me a beer" buttons. Anecdotally, one of those buttons plus $5 will buy you a beer.

Plus, how much does it really help? There are so many people with 'donate' buttons on their website who don't get enough 'donations' each year to even eat a single meal.

A far better proposition is just charging what you think it is worth and advertising the benefits to the buyer. Telling the buyer you're going to get a sushi roll doesn't assist them. Telling them they save x hours a week, or avoid situation y - now that's better marketing.

You're not even talking about the same thing: the parent talks about piracy from an ethical point of view. Meanwhile, you reply with the physical point of view, saying the item is an exact duplicate that cost nothing to produce.

Representation doesn't mean a damn thing. It doesn't justify behavior.

Ethics is grounded in physical reality, that is sort-of where the buck stops -- at least it seems a better place than anywhere else. Surely an ethical evalution of an act depends on what the act is.

What makes an act bad? If, for example, you say stealing is bad, and are asked why, you can reply that someone loses something -- they could do things with it before, but no longer can. There is a sense of harm, in basic physical terms that we can all pretty much agree upon, simply because we all share the same basic physical condition.

But what if it were possible to steal something without taking anything away from someone -- i.e. the basic physical effect is different. Is that still bad? In what way could it be? You could just institute a rule proscribing such an act anyway, and so breaking the rule might seem bad superficially. But that would be like ruling that no-one can go out in the sun on wednesdays -- surely at some point someone will ask why. And there would not seem to be a good answer.

That is the way copying is different from taking. Because, at bottom, it does not do anything harmful, and is in fact positive. And that is why people are probably likely to have some underlying sense that copying is morally OK.

Sure there will, but it depends on whether you are empathetic to the condition of other human beings. A small software vendor sells their product. In effect, they're saying, either pay for a piece of software, or do without it. I could violate that contract, but then I'd be an asshole, because they asked for payment, yet I went and took it without paying.

I wish to treat other human beings with respect, especially creators. I may hate copyright, but that doesn't mean I take it out on creators. Their works enrich my life in ways I never would have imagined, and I'm pleased to be able to support them. Jason Fried of 37Signals had a quote recently where he mentioned that, in the case of good products, people are happy to pay for them.

I say this as a software developer and one who is not libertarian in the least.

Competent business owners, managers and technical people making decisions about the implementation of software are very interested in the value of that software and its value to business is exactly why we have an economy that exchanges money for these things.

There are some cases where it is possible to limit the supply of digital goods, and this is best seen in software where access to the code can be limited or the code can be written to be restricted in some way, especially in compiled software or web applications. But this, too, can often be hacked.

Note, I'm no fan of free markets. I think they are an enormously clumsy tool for linking 'price' to 'value'.

Wouldn't books, then, only be "worth" the cost of the paper on which they're printed? How does making something digital automatically destroy any inherent value?

But look at it this way, for anything digital the supply is infinite. We currently have legal methods of restricting the supply and some attempts at software or digital methods of restricting it. But even so, the difficulty we've had stamping out illegal piracy is a testament to how artificial and fragile these methods are. With truly infinite supply, the price will always be zero. Why should I pay for something I can create copies of with 'cntrl+c' and 'cntrl+v' ? The only thing that leads me to pay for basically anything is that I can't simply recreate it on my own. The day 3D printers reach the versatility of Star Trek replicators is the day a price based market economy will collapse completely. With infinite supply, there's no need to pay for anything.

The only reason price based markets even work for any other sort of exchange is because there is limited supply. With anything digital the supply is inherently unlimited.

So why don't people have the same mindset about currency?

It's just ink and paper that represents a perceived value...very similar to the way digital items work.

How about art? It's just paint and paper.

Digital copies may cost nothing, but the original usually costs thousands of man-hours and or lots of money.

"The idea that you should not be allowed to make copies, but must pay for them, is very unnatural"

In the programming community, it seems only unnatural when it involves proprietary software. If a company uses GNU software without giving back to the community (the currency involved with OSS), people here want heads to roll. Just look at any discussion here in HN that involved the thesis theme. Many, many people called him a "thief" and that he "stole" code from Wordpress. In reality, nothing was "stolen" (using your logic).

Your mindset will eventually cause the following:

1) Developer wages will decrease over time 2) Most companies will just have a web service as opposed to an app. It means you will be paying a monthly fee for software and it will cost more to the end-user in the long-run.

If you were to sell the software as a download, people would demand lower prices, since 'after all' they're doing all the work (and hosting is cheap). It's an interesting dichotomy.