On Subscriptiongate and other matters – Ettore Software

You may have seen, last week, that Smile Software, the maker of the utility TextExpander, is moving to a subscription model. Instead of a one-time fee for their app, there will be a monthly fee.

Riccardo Ettore, who develops TypeIt4Me, which was the first snippet expansion tool for Mac, has written a blog post explaining his point of view on this issue. He says:

… our view is that Smile’s new plan constitutes a bold move, albeit not one we would consider making ourselves.

[…]

The one-time $19.99 purchase with optional upgrades model suits us just fine and people seem happy enough with it. So if you’re a TypeIt4Me user alarmed by Smile’s new direction and worried we might follow in their footsteps, you can relax: that’s not going to happen.

Riccardo also points out that:

… we’re mainly a bit spooked by some of the unbridled scorn being poured on a previously well-regarded team that’s successfully marketed a solid, dependable utility for years. Watching a decade’s worth of goodwill unravel in the wake of a surprise decision that alienated a lot of customers has been a sobering lesson that we need to tread carefully ourselves.

While I disagree with Smile Software’s choice, I have been very respectful of the company, which is made up of great people. Others have been much less respectful, and that’s a shame. The company made a business decision, and they are paying a price, because – in my opinion – they didn’t understand their user base. But this is no reason for hostility.

The whole thing might end up like New Coke, and Smile may go back to the way things were before, or at least offer two options: one outright purchase, and one monthly fee for advanced features. We’ll know soon. I know that the people at Smile have been reevaluating their decision.

It does highlight the fragility of any product, and how changing the way a product works, or how it is priced, can cause users to vote with their credit cards. All developers should keep this in mind when they plan to make important changes to their software.

Update: Smile Software has published an article explaining changes they’ve now made to their pricing.

Source: Ettore Software | On Subscriptiongate and other matters.

5 thoughts on “On Subscriptiongate and other matters – Ettore Software

  1. Thanks for posting that update link. It’s nice to see that ‘Smile’ has modified their pricing. It seems they have satisfied one your your main concerns, which was the 100% price increase, at least for existing users. I do wonder, though, how they they were caught off-guard, considering how often we’ve seen this reaction from users when various developers have changed to the subscription model.

    Thanks also for posting those excepts from TypeItForMe. It’s good that they are able to continue with their current revenue model.

    That being said, I would caution against viewing that as any sort of validation of the one-time purchase model.

    A quick look at the LinkedIn profile of Riccardo Ettore and Greg Scown (the developer of TextExpander) shows the companies have different goals. Of course, you can not get the full picture from a LinkedIn profile, but it seems that Mr. Scown has spent the last several years trying to build a sustainable business that generates enough to income to support himself. Mr. Ettore, on the other hand, has spent most of the last several years working various places of employment, while also developing TypeItForMe.

    That’s great for him and his users that he can do that, but it also indicates that TypeItForMe should not be held up as an example of a company “making it work” with the older model, at least not yet.

    • Making it work? It would seem the results speak for themselves.

      Former TextExpander users are adopting TypeItForMe now because of what has transpired over the past week. Something that would not have happened had Smile/Scown properly done their homework. I had zero interest in considering competing options until this situation presented itself. I’ve looked at several. That has cost Smile a price.

      I fail to see how the comparison of the business goals of the two competing utilities matters. If Scown is trying to make a full time living from a utility development … is it the responsibility of his end users to provide that income? … at any cost? … when maybe the market dictates otherwise? Considering other developers can offer a compelling alternatives on a part time basis?

      This whole fiasco is of Smile’s creation. They didn’t perform due diligence in researching their traditional end users expectations before they ventured forth. They shot first, aimed later. Proving that maybe Scown isn’t ready to pursue this avenue as a long term, full time career goal.

      They screwed up and are paying a severe price for their mistake. One they may have great difficulty recovering from or regaining the same level of customer loyalty they once enjoyed.

      In my mind, such blunders do not bode well as similar mistakes in the future are not only possible … but very likely. Eleventh hour price adjustments will only reassure the budget minded users. Those users who are more adept at reading the prospects will not be so confident about the future.

  2. “While I disagree with Smile Software’s choice, I have been very respectful of the company, which is made up of great people. Others have been much less respectful, and that’s a shame.”

    I’m in partial agreement with you, Kirk. I favor respect in discussions, especially when there is disagreement (it’s really easy when everyone agrees). What concerns me about the quoted sentence, is that it misses the lack of respect that initiated this whole fiasco. Smile doubled the price with no warning and no alternative. This was very disrespectful of the customers that have supported them for decades. They indicated that they have no interest in the needs of those customers, and only care about a different class of customers. They also offered an “explanation” of why this was a good thing, and that explanation was also very disrespectful of many customer’s needs, values, and intelligence. They flack that they have collected was reactive, and triggered by the disrespect initiated by Smile.

    “The company made a business decision”. I believe that this justification appears, in almost identical words, in “The Godfather”, when one of Don Corleone’s lieutenants explains why he has sold out the family, and arranged for the murder of the Don and his sons (unsuccessfully, it turns out). And the plot has other similarities with the Smile situation. The person who thinks he is making a clever business decision ends up regretting it.

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