The Right Way to Buy on Price During a Recession

Published on 12th December, 2008

The current economic downturn, and an ever-growing deadpool of internet startups, has had a noticeable effect on the way I assess products and services. I’ve started buying on price, but not in the way you might expect.

In addition to the usual assessment of whether a product or service (hereafter, simply “product”) meets my functional requirements, and fits in with the way I work, I’m increasingly concerned with how the company behind the product is making its money; in short, is it charging enough to survive as a business?

Show me (how you make) the money

One recent example of this in practise is Cornerstone.

For those unfamiliar with it, Cornerstone is a piece of Mac software that shields sensitive types (such as myself) from all the command line shenanigans typically associated with using Subversion.

Cornerstone’s principal competitor is Versions, and there’s not a lot to choose between them. They both look good, and work well. Versions has received the lion’s share of publicity and buzz, and is even a bit cheaper, but I went with Cornerstone.

Why? Because they shipped.

For months Versions appeared to be little more than vapourware. Finally, a beta version was released, and legions of eager Mac developers started using it on a regular basis. No mention was made of likely price, and any forum questions on the subject were studiously ignored by the Sofa (the company behind Versions).

Months passed. Versions appeared to work just fine — no crashing or other beta unpleasantness — but still Sofa kept adding features, and ignoring questions about price.

In the meantime, Zennaware shipped Cornerstone. I tried it out, and it was very, very slow. I went back to using my beta copy of Versions.

More months passed, and I (along with many others) started getting a bit twitchy regarding the perpetual Versions beta, and in particular the lack of pricing information.

In the meantime, Zennaware shipped version 1.1 of Cornerstone. I tried it out, and it was much, much quicker. This, and several other improvements in 1.1, prompted several comparison reviews to favour Cornerstone over Versions.

I began to wonder how the hell Sofa were making their money. I also began doubting their commitment to Versions, and their ability to actually ship updated versions of the software in the future.

Whether this was a fair appraisal of Sofa is irrelevant; their unwillingness to ship their product, and persistent silence regarding a release date or price, made the long-term viability of their company as much of a concern as any feature or GUI widget.

Finally, after 5 months in public beta, Versions shipped.

I downloaded the trial and used it alongside Cornerstone for a couple of weeks. They both worked well. Versions was prettier. Versions was cheaper. The company behind Versions was still, rightly or wrongly, a concern. I chose Cornerstone.

Financial stability is a feature

I now think of financial stability in the same way I do any other product feature; in fact, I give it more weight than most features.

A superb product today, from a company that will be gone in 12 months, is of less use to me than an adequate product from a company that will still be making improvements, and releasing new versions, several years down the line.

It could be that I’m alone in this thinking, but I doubt it.

It could also be that this rationale applies only to software and web services, and not to service companies such as mine; but I doubt it.

A cut-throat business

If you cut your own throat to get new business, don’t be surprised if people notice the blood on the floor.

In the words of Chuck Palahniuk, “No matter how much you think you love somebody, you’ll step back when the pool of their blood edges up too close”.

Some clients will have a short-term view of your working relationship. They won’t care if you go out of business next week, just so long as you finish their job first.

We prefer to build ongoing relationships with our clients, and luckily they seem to share our long-term view.