The iPad drawing app Paper has gotten a lot of attention in the past week. One of the interesting bits about Paper is that the app is free, and gives you access to one of the 5 available drawing tools. To access the others, you have to buy them for $1.99 each. So to get the full functionality of the app, it costs $8.

This doesn’t bother me, in fact I kind of like this model. You can try out the app for free, which is nice since there are no trials on the app store, and is preferable to me than having Paper Free or Paper Lite. If you don’t use the watercolor brush, you don’t pay for it, so the app is cheaper than it would be otherwise. This all makes sense to me as a user and developer, and seems like a good approach.

But there is a reason we don’t see this model more, and it’s because most users seem to hate this. They feel like they’re being ripped off, nickel and dimed for each piece of functionality.

A post on Macdrifter sums this up nicely:

I would have simply preferred an honest version of the app with all of the tools for a single price. Yes, through IAP, I can get all of the “essential” tools for one price. It feels sneaky to me though…

Here’s the rub with IAP: I’m left wondering if cut-and-paste as well as zoom were omitted only to be added as additional purchases. When an App is dependent on IAP, I’m doubtful that much attention will be given to updating the core functionality.

It’s a valid criticism, and I can see why it would make some users uneasy. Next time they release a new tool, I may have to cough up another $2. This free app might cost $50 after a while. If you look at the app store reviews, you’ll find the majority of the negative reviews of the app are really about the business model, which is a shame.

I’m a bit torn on this, between a better experience for the user and making things sustainable for the developer. Releasing a $0.99 app and supporting it for free forever is not feasible. Maybe the solution is in-app purchases or maybe paid upgrades or maybe built-in support for free trials. Regardless, it’s good to see developers experimenting, and hopefully we’ll find a nice middle ground.

I’ve been thinking for a while that the app store – both Mac and iOS – might be the perfect way to make money creating open source apps. For the average user, they don’t care about the code. They don’t know what open source is, and couldn’t care if it’s written in Cocoa or Flash or Java¹. They buy an app that solves a problem, and that’s it. Other developers can dig a little deeper, and look at the source, either to learn from, or customize the app for their own purposes.

It looks like LiveReload is currently proving this model can be successful. It’s available for $9.99 in the Mac App Store, and also open source. Over the weekend, it was the #1 paid app in developer tools, and currently #3.

So, why open source it?

That’s a good question, and LiveReload’s developer, Andrey Tarantsov, gives the following reason:

Why? Because curiosity is the most basic and important quality of good developers. I believe that everyone benefits from being able to study and tinker with other people’s software.

There is no formal license attached. You are free to tinker with it and share the results with your friends, but please don’t distribute binaries publicly without my permission. I still expect every user to pay for a license, unless you have a good reason not to.

Sounds like a good enough reason to me. I would love to be able to see the source of all the apps I use. I’m sure there is a lot I could learn, and maybe there is one little thing I need the app to do, and with the source, I can make that change. Plus, purchasing the app from the store gives me a way to easily and directly support the developer.

Licensing

The only downside is licensing. It seems like there a lot of potential issues there. What if I fork the app, make some UI changes, and release under a new name, though it’s essentially LiveReload? What if I add a big feature, create a pull request, and the change gets merged into the app? Am I then entitled to some portion of the revenue?

I’m not a lawyer, so I honestly don’t know the answer. But after seeing Clear get completely ripped off before even being released. I can only imagine how many Clear clones would be out there if it was open source. Regardless, I’d like to see more of this.

¹ Assuming the app actually works well, which is a big assumption.

A complement is a product that you usually buy together with another product. Gas and cars are complements. Computer hardware is a classic complement of computer operating systems…

All else being equal, demand for a product increases when the prices of its complements decrease.
– Joel Spolsky

I definitely recommend reading the whole article. It’s 10 years old, but still just as interesting and relevant. Decisions start to make a lot more sense when looking at a company’s strategic moves through this lens, especially for a company like Google. They’re commoditizing everything from browsers to operating systems to increase web usage so they can increase ad revenue.

I’m not sure how exactly to take advantage of this as an app developer, but my first thought is this line from Rounders:

If you can’t spot the sucker in the first half hour at the table, then you are the sucker.

If you’re not doing the commoditizing, then most likely you are the commodity. Apps are a complement to Apple’s hardware. Driving the cost of apps towards $0 increases the demand for iPhones and iPads. Not sure if this is an intentional strategy on Apple’s part, but certainly seems to fit.