Lessons Learned: Developing Your Product And Pricing
Editorial note: This post is a guest post written by Ossi Marko, a lawyer who jumped ships and founded Signom, a company working with electronic signatures. Full disclosure as well - Signom is a current advertiser at ArcticStartup, but this post was in no way paid for.
I've heard and read a lot of comments about startups being afraid to launch their products. Or to put it another way, having a lot of problems determining when the product is good enough for launch. We usually tend to think that the product needs to be somewhat spectacular from the very beginning. Otherwise someone big comes and steals it and we don't have a competitive edge OR we make fools of ourselves and hang our heads in shame.
Signom Launches - Looking to Ease Signing Contracts
Back in May we wrote about Signom (full disclosure: Signom is an advertiser with ArcticStartup), a Finnish company looking to revolutionize the way we work with signatures. They've created an online service where you're able to go about and basically sign your contracts within seconds. Ossi Marko, the CEO and founder of the company, used to work as a lawyer before setting forward with Signom.
XIHA Life Drops Prices To Attract Sales
XIha Life has just lowered prices in all it's games to 6.99 and 10 euros to attract better sales. This means that more than 1000 of their games have been lowered into more affordable price groups. This is something, having a casual gaming background, I've been waiting for. Xiha Life is growing strong, according to Jani Penttinen - one of the founders. Xiha Life received a nice investment some time back from some Chinese investors and are building their network with that, they already have 4 international offices open.
If you look at pricing on a larger scale - it doesn't make much sense to try and sell casual games at 20-30 dollars. Even World of Warcraft is priced at 13-15 dollars a month (depending on contract). Even with low prices, its extremely hard to build a healthy consumer base. Habbo Hotel for example has some 10% of its users paying for its services at around 10€ a month. With such figures, Habbo is considered to be one of the benchmarks in the industry.
Furthermore, looking at the price distribution of the iPhone appstore (data from July 2008), you can see clearly that most products are priced extremely modestly. With such competition, it's very difficult to build a sustainable business. Then again, pricing online is relatively simple as you can find out the elasticity over time and thus price your products accordingly.
What's the most you're willing to pay for an service online and do you differentiate your willingness between service genres - entertainment, music/videos and others?
