Joel Spolsky on pricing strategies

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Camel_1 It is hard to imagine that I would enjoy reading a 5,000 word essay on the nuances of software pricing strategies, especially since it includes graphs, bar charts and terms like "Net present value."  But Joel Spolsky, CEO of Fog Creek Software and writer about software development, management, business and the Internet is the ultimate "edu-tainer" in his post Camels and Rubber Duckies.

He is an excellent and hilarious writer who reminds me of a Dave Barry for engineers.  And despite his inconclusive recommendations, "Charge $0.05 for your software.  Unless it does bug tracking in which case the correct price is $30,000,000," I learned a ton about pricing that will help me in my business.

Take a read.  I guarantee you will laugh out loud and learn something useful in the process.

2 Responses to “Joel Spolsky on pricing strategies”

  1. Paul says:

    >And despite his inconclusive
    >recommendations, “Charge $0.05 for
    >your software. Unless it does bug
    >tracking in which case the correct
    >price is $30,000,000,”

    Umm, that statement is a joke. Fog Creek Software, Joel’s company, sells bug tracking software, so the joke is that he’s trying to sabotage his naive competitors by getting them to overprice their product.

    Not so funny when you have to explain it, but there it is…

  2. This is a GREAT article! Thanks for pointing it out. I haven’t thought NPV or cost accounting since I graduated with a BS in accounting that I rarely used since (except when I fight with Quickbooks, but that is more like software rage).

    Nice to know even the experts struggle so much with pricing because goodness knows I do. Perhaps the best way to price a product is to follow the approach my high school history teacher used to grade papers. Throw them down the steps. First step – A’s, 2nd step A-‘s, 3rd step B’s, etc. While he didn’t ACUTALLY do it — it was pretty funny & might actually work for product pricing based on the Camels & Duckies….