We had the audacity to charge $9.99 for a piece of software. And we make no apologies for doing so.
That’s when we started thinking about price. We’re a rare company in the Web-based software business — we actually charge for things. We think free is a business cancer. Offering some stuff for free is fine as long as you have something else to sell. But “we’ll give it all away for free and figure out how to make money later” isn’t much of a business model in our minds. We provide our software like a restaurant provides its food, a cabby provides transportation, and a clothing store offers a shirt — in exchange for money.
At 37signals, we don’t want lots of customers. We want lots of the right customers. Our goal is to maximize profits, not market share. We also want to maximize happiness — for the customers and for ourselves.
What about $1.99? Or $2.99? We could have gone there, but we wanted to use price as a tool to reduce customer demand for Draft, not increase it. That’s right: We wanted fewer customers to buy Draft.