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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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More Fun With Subscription-Based Pricing

Comments (4)

Nick Bradbury put up a post earlier this week about FeedDemon going to a subscription model.  FeedDemon was acquired by NewsGator several months ago and – as part of NewsGator’s effort to “normalize” (and simplify) our product sales approach, we started the process of shifting FeedDemon to subscription pricing to match up with NewsGator’s pricing model.  This was in advance of a point release of FeedDemon (1.6) which will have the NewsGator synchronization engine fully integrated along with a other features

None of us expected 100 comments within 48 hours.  A few clear themes emerged from the comments.  A group of us, including me, Nick, Greg, and JB, had several long conversations over the past few days to both synthesize the comments as well as figure out the most effective and user-responsive approach going forward.

The result was a significant change in the way FeedDemon will work if someone’s subscription runs out – most notably – the software will continue to work, just with some of the subscription-oriented features disabled.  We also sharpened our thinking and point of view on the separation in the extended NewsGator product line between the software components and the service components.  Fortunately, we have plenty of models to build on (e.g. Symantec, McAfee) so we aren’t reinventing anything; however, we made progress getting clarity around how this works across all of our products.

The feedback to Nick’s second announcement has been uniformally positive.  It’s great to have users that have strong points of view, even when they are different (or of a much greater magnitude) than what you expected.  As a result of Nick’s blog, we were able to engage in a rapid, very public, and constructive feedback loop.  Assuming we are successful listeners, I’d hope this will lead to even better solutions for our customers.

Of course, there are several interesting sociological things at play here.  Historically, if users didn’t like what a manufacture of a product was doing (even if they loved the product), they were usually limited to one of two choices: (a) suck it up and live with it or (b) stop using the products.  The tempo and dynamics of blogging clearly has impact on these communication patterns in new and exciting ways, which will logically impact how products get created and evolve – hopefully to incorporate even more user feedback. 

  • http://www.scripting.com/ Dave Winer

    Hi Brad — For what it’s worth I started subscription-based pricing at UserLand in 1998, with good results. Our policy worked as followed:

    1. Pay $X to get started, download the software, install it.

    2. Every year pay $Y to renew, guaranteed not to change (for you, we may raise the price, but your renewal price will always be $Y) and you’ll get all new versions, updates and fixes.

    3. If you choose not to renew, keep using the software, but no updates or fixes.

    4. You can get back on board at any time for the annual fee, you don’t pay the fee for intervening years.

    There was some resistence to paying for fixes, but we stood firm on that, fixes cost as much as features, and we argued it wasn’t in the users’ interest that we be financially incentivized to add features but not fix bugs (guess how may fixes you’d get under that system).

    Most people seemed to be happy with the system.

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