It creates goodwill which generates recommendations.
Ed the Millwright
Free upgrades have one advantage for Fog Creek.
Bernard Vander Beken
I would imagine that the special 'loophole' mentioned on Joel's site is intended to sway more people who were on the fence due to 2.0's price jump. If he takes a hit on each sale, but generates enough extra sales, it looks like charity to us, while giving them a better bottom line.
> If he takes a hit on each sale
Remember that 1.0 was basically not marketed at all, except for via his blog and word of mouth. While it's tempting to believe that a popular blog like Joel's means EVERYBODY has heard about it, well... that's just not the case. :)
Brad Wilson (dotnetguy.techieswithcats.com)
It also creates 'buy-in', is that a term? Users have a $400 product and are more likely to buy CD 3,4 etc. than switch.
How much was the pro version of 1.0? People who just paid full price for it will feel ripped off.
$300 - some people do, but people understand his motives & his reasoning and go along with it. They know he's not ripping anyone off.
> How do you cope to get profit from CityDesk
Marktaw: "Takes a hit" as in "less dollars to keep in his pocket per sale", as in the "$270" he calculated for you on his post, as in "$270 that won't go into his pocket".
right... because you know those $70 guys - especially the existing $70 customers - really were willing to pay $300, but were holding out on Joel until he made a deal like this.
Personally, I think it's going to generate a one-time jump in sales from anyone who was on the fence (I've already got one person to buy it now). Joel's written something about the effectiveness of "limited-time" offers -- and in fact, when you download the free version of CD, you get a coupon for 20% off if you buy within 72 hours. (At least, that used to be the case. I'm not sure if they're continuing that right now.)
artificial scarcity. Gotta love the idea of scarcity with a product that can be reproduced an infinite number of times.
It won't be long and there'll be nothing artificial about the scarcity of CD for $70.
Dave, it's a marketing term. Look it up.
I have no doubt that they're doing well by it as well. I've been in touch with a couple of CD fence sitters. Don't know if they've taken the bait or not but I'd expect it's having an effect.
What Joel is really doing is removing the home edition.
Good point Ged. He's not giving something away for a lesser price, becuase he was already selling the product at that price point.
marktaw: my point *exactly*, sorry it sounded otherwise
=P no problem Patrick. It's simple misunderstandings that get blown out of proportion that make the world go around.
I seriously wonder if Joel makes any money selling software. I bet he makes it all on consulting, and he runs fog creek on some stock option money he made at uSoft and maybe juno during the dot.com boom.
On the other hand, it would only take 2000 people @ 350 to meet that.
I read somewhere on Joel's site that FogCreek does do consulting -- I've suspected this consulting work was a big part of their revenue.
Re: the comments on scarcity...
Joel said fog no longer does consulting becuase it's not profitable for them & takes them away from developing software.
he actually only has to sell 100 hundred-user packs of fog bugz to make $800K a year.
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