[jawns]

> What you charge for your product should be based on the value that the customer gets from it and not the amount work that you've put in to it.

Go one level deeper. How much effort would a competitor have to put into building a competing product and undercutting you?

If the answer is "one afternoon," then you either need to figure out a way to make competition less likely or set a more realistic price.

[onion2k]

Maximising revenue while the isn't a competing product is a good idea though. Why would you reduce your price before there's any competition? That would just be giving money away.

Also, people often trust a product they pay for more than something that's free. A plugin that's free could be doing all manner of nefarious things under the hood. A paid product comes with a level of implicit trust (wrongly, in my opinion, but still).

[Crinus]

One interesting piece of advice i heard some time ago is that you shouldn't worry about what your competitors are doing or might do since you have no control over them nor over how your customers perceive them, so any time spent dealing with competition is time wasted not working on your own product.

(note that this was in the context of smaller developers / indies / MicroISVs / etc, it might make sense to do the above if you are a big company with a dedicated marketing department)

[jakear]

If it really takes the competition a whole afternoon to implement this, $20 is an incredible price. Even just an hour for any in-house SWE in America is going to cost the company at least $20.

[jawns]

Replace "competition" with "user" and you have a point.

But what I mean is that if it takes only an afternoon to replicate 95% of what this tool offers, then a competitor could knock it out and start charging $10, or $5, or $1, or heaven forbid, release it as a free tool.

If that happens, the only people who are going to pay $20 are those who have no idea that the other tools exist.

There are certainly companies who operate solely on marketing power and get people to pay for things they could otherwise get for free -- see ProPublica's TurboTax investigation -- but for a tool like this, I can't see how it could work out in the long term.