Product strategy and pricing strategy for startups

March 6, 2023

The BusyBox team likes to share stories about starting and running our business. Here's one in our series for entrepreneurs.

When we started BusyBox we had a choice to make regarding pricing models.  Do we try to charge for updates and upgrades?  Or do we charge a bit more up front, and offer free updates and upgrades for a lifetime?

We decided to go with an Apple-like strategy. Here's what we mean, and why we like this style of business for BusyBox customers.

Apple and PC have been two of the biggest competitors in the technology industry for decades. While both companies offer excellent products, their strategies for hardware and software differ significantly.

Apple's strategy is to provide premium hardware at a premium price and offer free software and updates to its customers. On the other hand, the PC strategy is to offer lower-cost hardware and charge customers for software and security updates.

Let's take a closer look at Apple's strategy. Apple is known for its high-end, premium products such as the MacBook Pro and the iPhone. These products are priced higher than their PC counterparts, and Apple has positioned itself as a luxury brand. Apple's focus is on delivering exceptional user experiences, and their products are designed to provide a seamless experience across all devices.

Apple's software is also free, including the operating system, macOS, and iOS. These updates come with new features and bug fixes, and Apple ensures that its customers and products always have access to the latest software. This approach helps Apple build a loyal customer base who appreciate the value of having the latest and greatest technology without additional costs.

Apple also emphasizes security and privacy, and this is evident in the company's approach to software updates. Apple provides security updates to its devices regularly, and these updates are free. Apple's focus on security helps ensure that its customers are protected from potential cyber threats.

In contrast, the PC strategy is to provide lower-cost hardware and charge customers for software and security updates. PC manufacturers such as Dell, HP, and Lenovo offer a range of devices at various price points, from entry-level laptops to high-end gaming computers.

Unlike Apple, PC manufacturers charge for software and security updates. For example, Microsoft charges customers for its operating system, Windows, and users must pay for additional software such as Microsoft Office. Additionally, customers must pay for security software to protect their devices from malware and other threats.

This approach makes sense for customers who are cost-conscious and want to do their own tech support, and want to control the latest software updates, revisions, interoperability, and timing on their products. Furthermore, PC owners may decide to defer installing a security patches if it costs them money, leaving the customer at risk of cyber threats.

Given both approaches, we decided on going with the Apple style model.  One of our co-founders spent years at BOSE and experienced how the pre-paid support model influenced product design and life-long support. Leaving him with the feeling that long-term support is what he wanted to provide to BusyBox owners.

Many of us are subscribed to many different services, and it is easy to tire of the constant draw of money needed to keep your devices operating as it did on day one.  Choosing to cancel an update subscription can lead to a product not working well, which leads to a less satisfying user experience.  That's something we want to avoid for BusyBox customers.

Subscribing for additional services, like upgrades or additional features, and other optional utilities are often more palatable, since an owner is opting in to the services.  Things like iCloud for backups, or DropBox for additional storage, make sense to us, since the improve the experience, and the product works perfectly without them added.  

To us, Apple's strategy of offering premium hardware and free software and updates helped the company to build a loyal customer base that keeps their hardware in tip-top working order. Apple's focus on providing exceptional user experiences, security, and privacy has helped position the company as a reliable brand. In contrast, the PC strategy of providing lower-cost hardware and charging for software and security updates may appeal to some customers, but it may not be the best approach for everyone, especially if you are not into doing your own technical support.

Ultimately, we want BusyBox owners to always have a product that is secure, works well, and is bug free.  To do that, we build the cost of a lifetime of support and features into the price our customers pay on day one.   A little more up front, means a lifetime of worry-free operation.

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