Paying for Beta Software

After my review of Cha-Ching, the concept of paying for beta software has surfaced in my head a few times. It seems strange on the surface, but the more I let the idea marinate, the more sense it makes to me.

Paying the Bills

Traditionally, you put together an engineering team, pay the engineers to develop a piece of software over the course of months or years, and sell it at the end.



Things changed quite a bit with Mac OS X. Because Apple gives away high-quality tools at no cost, it's possible for a very small group of people to start working with very little initial investment. All you need is a computer.

(This is, of course, how it was in the beginning of personal computing. But as software development became more complex, a small team became less practical.)

The catch is that if you actually want to finish and ship, you might need some sort of funding. Apple lowers the barrier of entry enough to put self-funding into realm of plausible, but everything moves a lot smoother with a little bit of support.

One option is to find a private investor who will pay your bills while you work on the software. In this case, you push your unpaid time into the future since the investor will want more than just the original cut back — you'll have to give up percentage of total sales and perhaps a voice in the company's direction.

In a way, this is inherently backwards because you're giving up what you were after in the first place: your own show. Giving up control of your idea might make the whole effort moot. Not to mention the challenge of trying to convince somebody who doesn't necessary "get" the Mac design ethic to part with their money.

Conundrum! How can we solve this?

Split the Difference

So if you're not already wealthy and you don't want somebody hanging over your shoulder telling you how to run your company, what options do you have?

Users can fund development, but it's not easy to get somebody to pay for something that doesn't exist. You could release an extremely stripped-down version of your app and call it 1.0, but that might send the wrong message. Those are the two extremes. What about something in the middle?

Selling a beta is a way to split the difference. With this approach, you can be clear about your intentions. Users understand that you haven't yet implemented the complete "base level" functionality, but you're willing to compensate for that by reducing the price and providing free upgrades for the 1.x series.

With this approach, developers and users both sacrifice a bit. The community funds the developer's efforts, and gets something to use in the meantime. There's some element of instant gratification, and users can feel they're helping to make something happen. Distributed funding.

I don't know how many people remember, but Apple charged $30 for the public beta of Mac OS X. That case is a bit different because Apple didn't need the funding, but the fact is they did sell software which wasn't ready to be put on store shelves.

By selling betas at a discount, not only are you funded by the people who actually matter and understand what you're doing, but you have a product out in the market much earlier than you would otherwise.

I realize not everyone agrees with this, and it's certainly not a perfect fit for every developer. But what I like about this concept is it's a creative and simple solution which doesn't involve parties that don't fit in the equation. It's at least another option on the table.

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