It's important to understand that there are a lot of non-monetary costs associated with paying for things, such as entering payment info and deciding whether it's actually worth paying for in the first place.
I've actually never read anyone discussing the elasticity of demand for web services. Here's a thank-you to my econ teacher in college!<p>Sobering quote: "The biggest gap in any venture is that between a service that is free and one that costs a penny."
It's kind of funny- I think about web apps constantly. After reading this, though, I decided to make a list of the web applications that I have actually paid for. I could only think of one- it was one of the ediet ones that lets you pick your diet (out of many popular ones) then emails you meal plans and shopping lists each week. I'm not even on a diet.<p>The fact that it saved me time and thought thinking through healthy meals was what got me to pay. And it made me realize also how few web apps actually end up saving me time in the end (which is the make-it or break-it factor for me, but I realize probably not for others).<p>So here's my question- what web apps have you other news.YC'ers ever actually paid money for? Any?
It may just be me but I didn't really get much from this article. The author states that it's hard to get users to pay for something, and then doesn't offer any advice as to how to fix the problem.
It is true that making your users pay to try your product is the best way to keep your userbase small. I think that offering a free version and then a pay version with extra features is the only real way to expect users to pay. The problem is what happens when someone else comes along and offers all of your features for free? Google was really smart with Gmail because they started out offering people 2 gig of space, which seemed insane. What was even better is that they then made it constantly 'increase' so it seems like you have as much space as you'll ever need. But if you actually watch that ticker it's increasing so slowly that it probably isn't costing them any more money, and in fact their cost probably goes down, to give each user that much space.I guess my point is that once you have a user offering them a better 'precieved' value, even if it's not better than someone else, will get them to stick with you, or get them to consider a pay account.
The key objective is to develop an solution that would either generate revenue or save time and money for the user. If you cover that in your app, your group got a winner. Remember the key is to develop solutions not "stuff". An old economy rule for consultants. Be a problem solver.