CyberFOX Software Inc.

Greetings,

This is a very informal, off-the-cuff survey of some web applications in the Rails ecosystem that have varying payment plans, how they present them, and some of the differences among them.  The idea is not to compare the services, but to start to get a handle on how to price services on the web.

Background

I’m working on launching a small, very niche Rails-based web application in the near future, and am looking to charge a small amount per-month for it.  Mostly as a way to make ends meet while I’m unemployed, but also because I’d like to provide a few extra features to those users who already donate to the free JBidwatcher application, and because the web application uses S3 and I have to defray those costs.  While I’m very grateful my users are contributing because JBidwatcher itself is useful to them, I’d like to offer a ‘premium’ value both for folks who have already donated, and for people who don’t feel comfortable just sending money, and want to see something extra for it.

This led me to be curious about pricing.  I pay for several web applications already, and expect that eventually I’ll have to pay for more if Google starts actually asking for money.   I decided to dig into the applications that are out there, and see what kind of pricing models I should be looking at.

From my informal survey, a lot of the subscription plan models used by Rails-oriented companies naturally grew out of 37signals and their fanatic devotion to the concept that web applications should be good enough to charge for, and should be charged for.

The products I’ve looked at for this are Lighthouse, Tender, GitHub, Highrise, Basecamp, Campfire, NewRelic RPM, CrazyEgg, Hoptoad, Thunder Thimble, and Pingdom.  I’m sure there are many others out there, but those are the ones I deal with on a semi-regular basis.  I have paid accounts with GitHub and Pingdom, and have used (at other companies) paid accounts on Hoptoad and NewRelic RPM.

One specific attribute of all of these applications is that they have varying levels of paid accounts, not just a free/paid[/lifetime] like many other services (LiveJournal, Flickr, LibraryThing, to pick a few that I personally use).  I like the spectrum approach as it gives users a choice as to how much services they’ll need, and what the amount they’re willing to pay for it is.

Raw Pricing Plans

First I want to present the ‘raw data’, a link to the plans and a brief table with the plan names and the monthly cost.  Then I’ll point out a few things I found interesting about the data.

So what’s interesting here?

Lighthouse, Tender, GitHub, Highrise, Basecamp and Campfire all differentiate on disk space used.

Lighthouse, Tender, GitHub, Highrise, Campfire, Hoptoad and Thunder Thimble all have some variation on the concept of ‘user’ that you can pay more for more of.

In everything except NewRelic and to a lesser extent Hoptoad, all the capabilities of each application are available to all user levels, just at varying quantities.  Feature distinction only exists in those two applications.  In Hoptoads case, the distinction is between free/non-free; if you’re paying, you get all the services.  This leaves NewRelic as the only one that deeply distinguishes between features available to different paid levels.

GitHub, Highrise, Campfire, and Hoptoad all have SSL support as an ‘add-on’ feature; it’s not part of the free accounts, and in some cases it’s not part of the basic level paid accounts either.

Discounts

When I signed up for Pingdom, they sent me a ‘70% off the first year’ invitation, which reduced the price to roughly $3/mo. for all the basic plan amenities; presumably under the theory that they will be able to re-subscribe me in a year at full price.

NewRelic is running a 20% off discount currently, which lasts as long as you have a paid account.

Pricing Plan Layout

Historically I seem to recall most of these sites had the table style of comparison chart (still used by NewRelic, Hoptoad, Thunder Thimble, and CrazyEgg), but most have converted to the ‘box’ style of comparisons.  GitHub still has the table when you view the plan chart from your account settings, but other than that Lighthouse, Tender, GitHub, all the 37signals products, and Pingdom are using separate boxes for each plan level.

The 37signals products and Pingdom use an outsized box to emphasize one of the plans, presumably to drive signups to that plan.  CrazyEgg does the same thing within their table style, also.

I kept the order the various products displayed their prices, and it’s noteworthy that all the 37signals products, CrazyEgg and Lighthouse start with the larger plans on the left, and go down from there.

It’s also interesting that all the ones marked as ‘and a free plan’ de-emphasize the free plan by putting it in small text under the large table of paid options.  Two of them, Tender and Thunder Thimble offer a 30 day free trial, but no ongoing free plan.

GitHub and NewRelic are the only ones whose plan details go below the fold.  GitHub’s plan upgrade doesn’t, but their new sign-up plan list does.

Disk Usage

So for the applications which differentiate on disk usage, how much does $50/mo. get you?

This pattern is roughly the same for the $24 price point for all of them. 500MB for Lighthouse and Tender, 2.4GB for GitHub, and 3GB for the 37signals products. This suggests that limiting on disk usage ranges from 20MB-200MB per dollar per month, a pretty wide range. Estimating based on S3 costs suggests a per dollar per month storage amount of around 2.3GB, but that relies on one upload, one download, and ongoing storage. If your usage is asymmetric, or storage is temporary, the S3 based cost can vary a lot.

Users

For the applications which vary pricing based on users, how much does around $24/mo. get you (I chose this number since Hoptoad doesn’t have a $50 price point)?

I believe this is a wide range mainly because per-user data is usually relatively light, and so it has more to do with how complex the application’s interaction between users is, rather than a real per-user cost. Still, some numbers do come out of this. The cost/user ranges from $0.78 to $4. At the $50 price point, the cost/user for qualifying apps is $0.82 to $3.27.

Summary

I don’t pretend to know pricing, or sales, but I like to believe that in aggregate the people putting these sites together do.  I see a pretty good argument here for feature parity among price points, but finding quantities that can vary between prices.  There is a clear value to users and disk space used, so those are early things to look at when pricing an application.  SSL support is a common feature of paid plans, and not of free plans.

There’s a definite movement towards boxed plan details, over tabular feature comparisons.  Ongoing free plans still exist in the majority of applications, but are de-emphasized in most, guiding users towards the paid plans.  Overall, the plans are simple, only falling below the fold in two cases, and relatively easily consumable in all.

The lowest payment point plans are $5-40, with a bare majority falling in the $5-12 range, and all the rest but NewRelic falling in the $19-$25 range.

Closing

I hope this has been an interesting and potentially useful survey of a few pricing plans for applications generally in the Rails ecosystem.  Any mistakes are mine, and I’d very much like to hear about them so I can fix them.  Other data points are welcome, and points I might have missed that would be valuable to folks thinking about pricing are welcome, and even encouraged!

I did this for my own edification, but I’d also very much like to know if others find it interesting!

Best of luck, and may figuring out pricing not be as much of a pain for you as it is for me!

–  Morgan Schweers, CyberFOX!

Greetings,

What alternative do you suggest for using models in migrations? I was in several situations where I had to not only change the underlying db structure but change the contained data, too.

Data changes, especially moving data around, are almost always rake task-worthy in my experience.

The other side of that, populating large amounts of seed data into new databases, is a difficult task no matter the method; seed_fu attempted to deal with it, but it’s not an optimal solution and pretty old. I’m not even sure if it works anymore. It’s worse if you need the seed data to be from a legacy database in tests (e.g. a nutritional database). Reloading lots of data each time a clone_structure_to_test is done makes your tests very slow.

I break down migrations into three kinds; structural (tables, columns, indices, etc.), data (pre-populating tables, etc.) and procedural (moving data around, recalculating counts, etc.). The first is what I strive to limit migrations to. I feel like there should be a good answer for the second and Rails 3.0 has a ‘Simplest Thing That Can Work’ feature in Rails commit #4932f7b. The third, I try to relegate to rake tasks that are usually run once, on deployment of the branch.

The procedural tasks don’t need to be run when building a fresh database, because there isn’t legacy data to correct. That’s why you can usually define the model in the migration to force it to work even if the real model is gone or renamed; there’s no data, so the operations often don’t matter. If they don’t NEED to be run when building a fresh database, I try not to put them in the migrations.

It’s not ‘hard and fast’, because I usually work in startups to small companies, where dogma doesn’t work so well. Imagine, though, a large and thin piece of foam. It’s flexible, and you can make it into all sorts of shapes, and yet it’s simple. Each time you add code that makes reasonable changes in the future painful, it’s like putting a thin glass rod into the foam. It’s still flexible, but there’s some bends you can’t do without breaking. Add too many and you’ve got an inflexible and brittle object, no matter how dynamic the base material is.

The fear of breaking things by changing the code is deeply demotivating for everyone.

I know I waterboarded that analogy, but hopefully it makes sense…

— Morgan Schweers, CyberFOX!

Greetings,

[Edit: Since writing this article up back in early March, I've moved on from this job. The folks who are now maintaining it at least know where the pain points are, can run migrations safely, deploy it locally, and to dev servers, and to the main deployment area.  It's a working app, although I never got code coverage above about 45% at least the coverage was decent in the core app areas by the time I left.]

Mike Gunderloy had an interesting article entitled ‘Batting Clean-up‘, which was very timely for me.  I’ve just started maintaining and trying to improve a Rails app developed by an ‘outsourced’ group. The only tests were the ones generated automatically by ‘restful authentication’, and they were never maintained, so they didn’t come close to passing. Swaths of the program are written in terribly complex (and sometimes computed) SQL, migrations didn’t bring up a fresh database (poor use of acts_as_enumerated causes great hurt), and vendor/plugins should have just had one named ‘kitchen_sink’.

It hurts to see Rails abused like that; you want to take the poor application under your arm and say, ‘It’ll be okay…we’ll add some tests and get you right as rain in no time!’, but you know you’d be lying…

I did much of what Mike described (half the gems it used were config.gem’ed, the other half weren’t), vendor’ed rails (it breaks on newer than 2.1.0), and brought the development database kicking and screaming into life. There was no schema.rb, it had been .gitignore’d, and the migrations added data, used models, and everything else you can imagine doing wrong. (Including using a field on a model after adding that column in the previous line…I don’t know what version of Rails that ever worked on…) I didn’t want a production database; who knows what’s been done to that by hand. I want to know what the database is _supposed_ to look like; I can figure out the difference with production later.

Once the clean (only data inserted by migrations) dev database was up, I brought the site up to see if it worked. Surprisingly enough, it did; apparently they used manual QA as their only testing methodology. I appreciate their QA a lot; it means it’s a working application, even if it’s not going to help me refactor it.

I ran flog and flay and looked at the pain points they found to get an idea how bad things might be. I picked an innocuous join table (with some extra data and functionality) to build the first set of tests for, which gave me insight into both sides of the join without having to REALLY dig into the ball of fur on either side. I viciously stripped all the ‘test_truth’ tests. I looked for large files that flog and flay hadn’t picked up to pore over. Check out custom rake tasks, because those often are clear stories and easy to quickly understand in a small context.

Checking out the deployment process tells you a lot also, although it turns out this was stock engine yard capistrano.

Skimming views (sort by size!) will tell you a lot also, especially when you find SQL queries being run in them…

Use the site for a little while, and watch the log in another window. Just let it skim by; if you’ve looked at log files much, things that seem wrong will jump out even if it’s going faster than you can really read.

In my case, the code’s mine now, so it’s my responsibility to make it better before anybody else has to touch it. I’ve got about a week of ‘free fix-it-up time’ before I need to start actually implementing new features and (thankfully) stripping out old ones… At my previous company, I was the guy pushing folks to test, now I’ve inherited a codebase with zero tests. Poetic justice, I suppose…

Good luck!

— Morgan Schweers, CyberFOX!

Greetings,

‘@workon‘ is a brutally simple time tracker; it’s mainly to scratch my own itch, but I’d like to open it up to others.  Twitter has opened up it to 20,000 API calls per hour, which is 19,800 more than I think it’ll need.    It’s a Rails application, listening to email via IMAP in order to recognize followers, and using the Twitter API in order to listen and send direct messages.

The simplest use is to follow ‘workon‘, wait until it sends you a direct message, then ‘d workon {what I’m doing}’, and ‘d workon done’ to mark the most recent one as finished.  It keeps a page (by default a semi-private URL it direct messages to you, but the user can make it visible by their handle) of currently open tasks, and the time information for recently closed tasks.

Right now it polls for direct messages and new followers once every minute.

I created this because I’ve started contracting recently, and I have to keep track of my time for the first time ever.  Since I’ve always got TwitterFox in my browser, I thought it might be a good way to keep track of my status there.  There will be more features to come; I only started to work on it from Saturday at 3:45am, until Monday at around 3am, and most of Sunday I was ‘active parent’ letting my wife have a day off, but it already does what I’ve described above.

It also has the ability to support Jabber, and I’m thinking about how to improve that cleanly…

If you find it interesting, or want any features, let me know!

–  Morgan Schweers, @cyberfox / @workon

Greetings,
The JBidwatcher home page, forums, and svn are all down for a few hours while my hosting service fixes some power problems in their data center.

I’m really sorry I didn’t set up a fallback DNS, or something else, beforehand. Offhand, I don’t know a good way to handle my sole host being powered off…

— Morgan Schweers, CyberFOX!

Greetings,

I’m definitely not an artist, and there’s not much to work with from gotAPI. No logo on the blog, Twitter, and the site’s main logo is textual. The favicon is the only piece of abstract iconography to work from, so that’s what the Fluid icon is based on.

It works for me, because I’m a heavy-duty tab-user, there are often so many tabs that icons are all that’s left, so I’m used to looking for the gotapi favicon.

With those caveats in mind, this png is what I’m using as my Fluid icon.

— Morgan Schweers, CyberFOX!

Greetings,
That quote is from a Treasury spokeswoman, quoted by Forbes, on why the bank bailout will need $700 billion.  A spokeswoman who probably has joined the unemployed today.

There’s a lot of people suggesting that we should let them all die (including me, in a fit of deep fury, when the bailout first was proposed).  Others have suggested that simply improving the more stable banks ability to give mortgages would help, so folks could refi with those, and leave the bad financial companies to wither.

Unfortunately it’s long past being just a mortgages issue.

The original sub-prime mortgages have been securitized into investments which returned a good percentage with an aggregated low risk, and were part of the formula that many companies used to approximate future revenues.  They loaned and invested based on that approximation.  Several relatively small companies sold ‘insurance policies’ (its more complex than that, but it comes down to hedging against risk) that they weren’t sufficiently collateralized to back.  It turns out there was a lot more risk involved than was visible.  When the bad loans became endemic, these insurance policies were called in by the major companies to preserve capital.  The small companies folded, not able to actually provide the liquid assets needed to back the policies.

Where we are now is that there have been huge losses, and companies who offered hedges against those losses are backing out of their obligations because they don’t have the liquid funds to meet them.  Those companies will close, bankrupt, and because nobody will ever want to do business with them again (and there’s probably quite a bit of legal action that will happen).  They are mostly small to medium sized hedge funds and independent insurers, basically.

This leaves the larger companies holding the bag for billions in risky, unhedged investments.  They want to get rid of them, not because they are all going to go to $0 worth, but because there’s NOBODY who’s willing to provide insurance on them right now, and in the financial market an uninsurable investment is not acceptable.

The bailout plan is to allow the government to acquire these securitized mortgages and hold onto them while the financial system rebuilds itself, and companies who are sufficiently capitalized to insure against the (now recognized to be higher) risks.  Then the government can re-sell them back into the system slowly, hopefully recouping a percentage of the amount that ends up being spent.

The problem right now is that EVERYBODY wants to sell, and NOBODY wants to buy.  In that kind of a market, even good quality doesn’t protect you from being pounded flat.

The reason for the government investment is to provide the market time to come to its senses, and breathing room to realize that these are not universally bad investments, the risk was just underpriced.  To make up a homily on the spot, if everybody’s terrified into immobility of the mouse in the room, nobody’s able to go and bring the cat in.

The reason this is far beyond mortgages is that when all these big companies have a large amount of risky investments that they can’t hedge against, they don’t lend money, because they aren’t comfortable knowing how much spare they have.

When these large financial institutions don’t lend money, people can’t get home loans, home improvement loans, student loans, car loans, business loans.  This trickles down to every single segment of society, from CEOs to greeters at Home Depot to startups to teachers to mechanics.

That’s the disaster that we need to avert.  And it pisses me off to no end that we’re in the situation where we HAVE to hand money over.  I’ve railed against this in public and private, but of all the insane things about it that make me deeply infuriated, the worst of all is that now that it’s gotten to this point, we have no real choice.  We’re forced to make a move like this.

I too want heads to roll.  The most common phrase around the office regarding this is ‘Heads.  On.  Pikes.’  There must be accountability, and it must be large and visible, not detail-oriented and generally annoying like Sarbanes-Oxley.  Several CEOs should lose their jobs, sans parachutes.  Several of the regulations which were eliminated in 1999 will be reinstated.  Maybe there’ll even be CEO compensation limits, and some government ownership of these companies in exchange for government assistance.

The reason that ‘700 Billion’ was picked out of the air, is not because there’s some knowledge of how much of these securitized mortgages there are out there (there isn’t, and if there was, I bet it’d be a lot more than $1T).  It’s because what is needed, far more than anything else, is a symbol of motion.  It’s for one person to come into that room of fear-frozen people, and corner the mouse for a few minutes while someone else goes and grabs the cat.  It had to be a number that shocks the conscience, because otherwise people would be asking nervously, ‘Is..that going to be enough…?’  And calming fear is, in the end, what this is really about.

That all said, one political party has de-regulation as an express political plank of their platform.  I know I’m generally preaching to the choir here, but they should learn just how out-of-touch that particular political plank is on November 4th.

–  Morgan Schweers, CyberFOX!

Greetings,

So I’ve had this in my playlist for years,  but shuffle just brought it up again, and the need to push it welled up.  It may only make sense to folks who’ve lived in New York and California, but…

Dar Williams – Southern California wants to be Western New York

It’s not my usual fare (leaning more towards meaningless high energy pop, techno, etc., and the occasional story-rock), but it makes me oddly nostalgic. 

–  Morgan Schweers, CyberFOX!

Greetings,
There’s an interesting few blog posts going on about folks who work really hard. It started from Jason Calacanis’s article of tips on how to save money when running a startup (many of which are good, but #11 is ‘Fire people who are not workaholics…’) and that was picked up at the 37signals SvN blog which comes out strongly against workaholics.

As with everything else, it’s not that simple…

In the successful startups I’ve worked at, a core of people staying late, working long hours, was a symptom of having an idea that people can believe in.

I have not seen any very successful startups where the developers weren’t at least a little monomaniacal about their work.

On the contrary, I’ve been at two successful startups (defined here as wildly successful IPO’s) where having those fanatic developers was a core reason of why they were successful.

The people who were putting in overwhelming hours at those companies weren’t doing it because they’re workaholics. They were doing it because they were true believers. Both in the company itself and the product they were building.

It’s not about the workaholics making the company successful, it’s about the company being one that the employees can believe in, to the point of _wanting_ to be there, wanting to be making it better.

In those cases, you don’t fire the people who are passionate about building your company. You support them, and accept that they’re going to crash occasionally, and try to nerf the crash some…

In my experience, it’s the fervent employees who are the core of successful startups. This was true at McAfee Associates (went public in 1992), and PayPal (went public in 2002), both successful startups that I was part of.

You also need people who aren’t as fervent, who can see a wider view, so it’s always a balance. So you can’t really ‘fire’ either of them, out of hand.

I’ve been that true believer, focusing everything into a job or project that I deeply care about. I’m a much calmer, more balanced person now, though. We’ll see what happens in 2012…

– Morgan

Greetings,

I have an important personal announcement!

My wife and I have a baby on the way; he is due in early May!

(The linked post also includes details on what I’m working on for JBidwatcher2.)

As I say in the post, we’re incredibly excited, and a bit scared. It’s going to be an amazing journey.

I’ll post more about it later, but it’s…well, it’s been incredible and wonderful, and terrifying and astonishing.

I’m not entirely sure I’ll know how to be a good father, having lacked that particular role model in my own life, but I’m sure going to try.

The joy and thankfulness of a new year is upon me, and the vast majority of it surrounds my wonderful wife and our growing baby-to-be.

Happy New Year to all, and best wishes for a great 2008!

– Morgan Schweers, CyberFOX!