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then the different versions of Access as they came out. What happened was we started getting a very good reputation for support, and the newsgroups spoke well of us. So any time anybody ran into this issue we actually had customers acting as our representatives, recommending us to other programmers. Pretty well everything was word of mouth, which is one of the nice things about the programming community. Smolin: So you pretty much started this thing on a shoestring. Did you have to put any hard dollars into this before it began to sell Matfield: I left Mobil with a year s salary. So both my wife and I had a year s salary from our jobs in Calgary. So the whole thing was bootstrapped by ourselves. Smolin: What do you do about copy protection or pirating Matfield: Well, you know, I thought about that for a while. And my philosophy was that people were buying a service, not a product. You know, I didn t do much about that apart from taking a couple of license agreements I looked at the one at Wise and one from InstallShield and merging them together and made one up for this product. I found that the customer base I was dealing with was honest and ethical. And so I don t think we have a lot of trouble about people stealing the product. You do get a small amount of people who try sometimes to buy the product with bad credit cards. Occasionally, we get calls in for support from people who haven t purchased it. We priced the product reasonably, and the support we offer is part of the price, and that s what people want, they want a solution. I would like to say though that there are different bands of customers. There was an experiment that IBM ran in the 70s which had an unexpected result. Back in the 70s, IBM owned a large part of the computer market, and they were supplying hardware and software and turnkey solutions. And some areas, some business areas, some sales areas were high-performing areas and cooking, and other ones were low-performing areas and lagging. So they would flip the salespeople over. They d take the high-performing salespeople and put them in low-performing areas, and they d put low-performing salesmen in high-performing areas. What happened was that the sales after two or three years were about the same, and then the people the high-performing salespeople had mortgages and car payments and so forth and had an expectation, a set salary, and so they did whatever it took to get the salary back up to their previous levels. What they didn t expect is that the low-performing people would actually sabotage the sales accounts to get their salaries down to the levels that they were comfortable with. So this introduced the idea of comfort zones to IBM that everybody operates within a band of comfort, be it around how much they re willing to pay for something to provide for them with a solution. That s where areas of comfort zones come into play in pricing software.
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What I observed when we started up is that at $195, we tended to attract the nickel-and-dime crowd. People in that comfort band might navigate to shareware, want something for nothing, people that have a kind of hobbyist kind of attitude. We used to get a lot of credit card vouchers. Now we hardly get any credit card vouchers since raising the price people who pay by credit card and they don t have the funds. But back then you know it wasn t uncommon for us to have somebody buy a product, and then you know their credit card would be tapped out. Smolin: So you raised the price and found that you had fewer problems doing business Matfield: Well, yeah. We actually after about a year and half, I hired a business analyst/consultant. He was a generic business analyst. He didn t know the software industry per se, but he had a good reputation in the valley for helping businesses improve themselves, and he did a thorough analysis of our business. Anyway, one of the recommendations that the consultant made was to raise our product price. I was actually quite terrified to do that. I thought our customers would just disappear overnight. I was surprised to find that it didn t even have a blip on our sales volume. So we went from $195 to about $325 overnight, and you know, there wasn t even a blip in the sales volume. Smolin: But you were working with a better class of people. Matfield: Well, essentially that s what happened. We filtered out the nickel-and-dime crowd and we attracted people who were looking for a more serious product Smolin: Serious developers. Matfield: Yeah, and we since then increased our prices more than once and generally have found that we have not changed the sale volume. Well, in some cases actually an increase in price has increased the volume. Smolin: So you ve expanded the product line quite a bit, as I see on the web site. Have you had any that have tanked Matfield: Oh yeah, and you know, they ve not so much tanked that, you know, they probably haven t even paid the cost of the development. I didn t see that as necessarily a failure. I just saw it as, you know, I was interested in trying this or that concept, and some of them had less blatant need than others. Smolin: Was it because it was a smaller market, or did you misgauge the market size or segment Matfield: Well, one good example is the Palm Pilot. They were kicking out so many versions, we ended up with half-a-dozen different versions of the Palm Pilot runtime script. I m sure we didn t break even on those, but we learned a lot about the Palm.
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