If the dream team couldn’t make it work, who can?
In my mind, the challenge faced by productivity app developers can be traced to the Jekyll and Hyde personas of a capitalist citizen:
- Joe Seller wants a monopoly market
- Joe Buyer wants a commodity market
In most markets, profits spike initially then dissipate as #1 moves to #2. With modern software, this transition happens at the speed of thought. It doesn’t matter how prolific an app team might be. Never before have so many people known how to code. Never before have software products been so accessible to so many.
The decentralization of software development and distribution makes establishing monopolies or seller-controlled markets virtually impossible. Software is an extreme opposite to a product category like pharmaceuticals. An app developer can’t pull off an EpiPen. As soon as a great app appears, clones abound.
I could go into the App Store right now and find 20 great note taking apps whose pros and cons cancel out. Any one of them would be great for me, but I can’t use them all.
Pricing apps as non-digital goods is hopeless in the long run. If you’ve read the Internet at all, you’ve seen what I call “the latte rationalization,” which goes something like this:
If you spend $5 a day on coffee, why can’t you spend $5 one time on an app that benefits you every day?
This is a great example of an argument that holds up from a rational perspective but fails spectacularly from a behavioral perspective.
Most people who buy apps do so in response to the pleasurable feeling of experiencing something new. It’s a sensation—a very fleeting one. This is extremely different from the recurring pleasure people get from regularly consuming caffeine and sugar—substances that please a much more primitive part of the brain than cerebral software-based productivity can ever hope to in the current version of the human mind.
As I’ve written here before, software is simply a form of encoded human information. People are willing to purchase information, but they will only spend so much, and they will only purchase the same information so many times. There is no pleasure center in the brain for redundancy.
A service model might be the answer, but only if buyers believe the service is unique and essential. That is, it must provide new and useful information on an ongoing basis. For most successful business models, this means the real product is not the app, but the thoughts that pass through the app.
We may step back one day and realize that the software economy was humankind’s first (inadvertent) success at valuing knowledge. For now, we’re learning the hard way that few thoughts are original.