Why we charged users to pre-order our alpha

(and why we’d do it again)

When we first unveiled Alive, we decided to charge customers before our product was even finished. We announced Alive on reddit where reactions ranged from skeptical to outright hostile:

skeptical

outright hostile

Tough crowd.

From reading these threads one might get the impression that we completely botched our release. Today I’m going to take some time to explain why we charged early and why we’d do it again.

If you’re not embarassed by the first dollar you charged, you charged too late.

The first thing to understand about programmers is that we’re naturally skeptical of new products (especially ones that seem to come out of nowhere). This is doubly true when we’re asked to pay for something and we can’t even try it. We’ve all heard the Kickstarter horror stories and can probably point to some sort of vaporware that let us down in the past.

So with this in mind: Why did we do it?

It boils down to three reasons:

  1. Immediate validation of product-market fit
  2. Allowed us to focus 100% on the product
  3. Manageable growth

Immediate validation of product-market fit

Alive is Code Connect’s third project. Our first two products the self-title Code Connect and Source Browser were both offered as free betas that we had hoped to monetize later. From working on these products we learned there was a huge difference between asking:

Would you pay for this?

and

Will you pay for this now?

Every founder sees their product through rose-colored lens and only by asking the second question do you gain any insight into whether or not you’re truly creating value for someone. We want to create a product that our users love and if no one is willing to pay for it then it it’s pretty clear that no one truly loves it.

Asking for money forced our users to be completely honest with us.

Allows us to focus 100% on the product

When we announced Alive, we’d been running Code Connect for about a year. During this time we’d managed to keep our burn rate very low, but ultimately everyone has to pay rent and eat. With no income, we occasionally consulted on the side.

Charging early allowed us to focus 100% on building and improving Alive. The best outcome is one that benefits everyone. This approach allowed us to deliver a better product to our users and made it easier for us to make ends end meet. On top of it all, income from pre-orders and beta sales have funded (in part) the hiring of our first co-op student! He starts in September and we’re very confident he’s going to be able to help us make Alive even better.

Manageable Growth

Alive still have a number of rough edges that our customers are going to run into. Offering a free alpha would have been a great way to gain a lot of users quickly, but we likely would have been inundated with bug reports and feature requests. Controlled growth has allowed us to respond quickly to the bugs reported by our paying customers.

Charging early has also meant every one of our customers truly believes in the long-term vision of Alive. This means they’re more tolerant of mistakes and willing to work closely with us to help iron out bugs. Many of our customers take time out of their days to track down bugs and provide us with complete repro instructions and sample projects.

Conclusion

You certainly need a thick skin if you’re going to go out there and ask people for money, especially without letting them try your product first. However, when you’re trying to validate your product there’s no substitute for just asking “Will you pay for this now?”

P.S. - The reactions elsewhere were not all negative. Here’s some of our favorite responses: