• Chris ArmstrongChris Armstrong, 8 years ago (edited 8 years ago )

    I run Niice, a moodboarding tool and (I guess) ex-competitor of Octobox. I’m actually really disappointed to see it go though, just as I was with Icebergs.

    That said, I can understand why this happens. It’s one thing to design and build a useful product, another thing entirely to build a sustainable business. The two aren’t necessarily related either: there are plenty of sustainable business with crap products, and plenty of failed businesses that had fantastic products (Everpix springs to mind… may she rest in peace).

    I don’t know Milosz (the creator of Octobox) or why he’s having to shut the service down, but I’m sure the decision wasn’t made lightly. A product like this is your baby, you pour a lot of blood, sweat and tears into it, and you really value people who embrace it as part of their workflow. That said, if you want it to stay alive it needs to at least cover its running costs, and if you want it to grow it needs to cover development, marketing and support costs too. A common conversion rate for freemium services is 2%. That means you can have 10,000 active users, yet only 200 paying customers. If you’re charging $5-$10 per month (which seems to be what most people feel a service like this is worth, when balanced against all their other subscriptions), that means those 200 paying customers make you ~$1,500/month. I’ve heard people describe Amazon S3 as ‘basically free’ because $0.03/GB seems pretty cheap, but on image bookmarking sites it soon gets costly. Add to that Heroku hosting (because it’s cheaper than hiring a system admin, trust me…), an email service (we use Mailgun), Intercom for customer support, Kissmetrics (or Mixpanel) for event tracking (because Intercom doesn’t do ‘analytics’ very well) etc… and the monthly costs add up.

    Long story short: If you’re using an ‘indie’ app that you’d like to be around in a few years, then pay for it. It makes more of a difference than you might think (even just in terms of motivating the developer to keep going), and it definitely costs less than the time you lose switching services each time one shuts down.

    Note: Niice is actually covering its running costs pretty comfortably, so it’s not going anywhere anytime soon. I’m keen for it to still be going strong in 10 years though, which is why we’re doing the following:

    1. Bootstrapping. Not having a pile of money in the bank helps keep things real. It forces you to keep running costs lean, and ensure the app is providing real value (i.e. worth paying for) from Day 1.
    2. Charging for features that cost money to run (for example, only Pro users can upload images). This makes it a lot harder to demo the app’s full capabilities to free users, but it means your running costs don’t increase unless your revenue does too.
    3. Providing a backup. Right now we do this in the form of Two-way Dropbox sync, but I plan to add more options down the line. If worst comes to worst, you’ll still have your stuff.
    13 points
    • Ronan Flynn-CurranRonan Flynn-Curran, 8 years ago

      Thanks for the honest breakdown Chris. I think you're right that costs are the #1 reason why apps like these get shuttered.

      I migrated from Kippt to Niice (via Raindrop) and haven't looked back - great service!

      2 points
    • Milosz FalinskiMilosz Falinski, 8 years ago

      Thank you for writing this and great work on Niice, Chris :)

      For me the reason isn't so much the cost ($20/mo), but just lack of time to develop this app further. I see how much work it would need, even for me to become a paying user, and it's just something out of my reach. Btw, all the code for Octobox is open source.

      1 point
    • Diesel LawsDiesel Laws, 8 years ago

      Thanks for your website. It's been very helpful many times in my career.

      1 point
    • Luis La TorreLuis La Torre, 8 years ago

      This is amazing! Thank you so much! I actually have a Niice account but I haven't use it lately, definitely going to go back to it! This is also good inspiration to use in other business.

      0 points