Reinventing PowerOne #2: Don’t Screw Customers

This is the second in a series of articles discussing the reinvention of the award-winning calculator, PowerOne. Read the entire series here.

There has been a steady stream of companies moving from a one-time payment model to a subscription model. And in pretty much every one of these cases it is clear that, even though the company says it is doing this for the customer, they are not. In almost every case they screw their existing customers.

Whoa, you say, that’s harsh. Doesn’t the company have a right to make money?

Of course it does – that’s what a company does – but not at the expense of breaking the promise it made to its customers.

The promise we developers make to our customer is that in exchange for their money (or in the case of a free app, their time) we provide an app or service for them to use.

The app stores have added a second clause to this implied contract as well, the one that gets too many developers in trouble as they don’t consider it when building their wares: the developer will continue to ensure that the app runs on future versions of the operating system.

This is what the customer signed up for and all too often this is the promise that developers break.

But if the company is no longer making enough money to continue supporting the product then how can customers hold the developer to this deal? Don’t companies have the right to change the deal?

Absolutely not. The contract with existing customers has only one out clause: go out of business. The contract with new customers, however, has not been written yet. With them we can create a completely different deal.

Developers: we knew the terms going in. In fact, we wrote the contract. We don’t get to change the terms later.

When we set out to rethink PowerOne we knew that screwing our customers wasn’t an option. I set the terms of the contract and millions accepted those terms over 20 years.

I felt I had two choices. We could either:

  1. Change the terms for new customers while maintaining the products for our old customers.
  2. Make the new product free for (almost) all of the functionality we had before.

We chose the latter. After our first week, I am thankful we did.

Reinventing PowerOne #1

This is the first in a series of articles discussing the reinvention of the award-winning calculator, PowerOne.

It’s hard to rethink a 20-year old product in its entirety, but that’s exactly what we have done over the past few years.

To understand how hard this is, understand that PowerOne (originally called FCPlus) started in the old world of software. It was a time before we could guarantee each of our customers had an email address. There was no ordering online so we established an 800 number for our customers to call. We shipped physical products and worried about retail distribution. We charged a purchase price, anywhere from $60 to $160 per copy, plus upgrades. Our customers didn’t even complain!

It was a different era.

The beginning of the end occurred in the mid-2000s with the rise of cheap servers and web services. Free+subscription and free with ads became the new norm. Then the old era officially died on July 10, 2008, the day the iPhone App Store launched. Upgrades were dead. Prices of software dropped to pennies on the dollar. There were suddenly thousands of competitors with little ability to differentiate at the point of sale, with prices too low to advertise.

We plugged away with the old model originally thinking that volume could make up for lower prices. We had a nice blip when the iPad launched. We were featured a bunch and the competition was less, but that faded, too. We were stuck in a spiral: PowerOne got older and older and we couldn’t afford to put the resources into updating it for the money we were making.

Our backs were against the wall.

Either we needed to completely rethink the product and the way we were marketing it, or we needed to say PowerOne had run its course and it was time to move on.

Frankly, we questioned everything. What made PowerOne unique? What did the customers that loved the product really love about it? What were modern customers willing to pay for? What did we expect PowerOne to do for us? Who was using it and were these people even our customers? Was it the right presentation on the right platforms?

I even went back to school, taking a marketing seminar course through Seth Godin that gave me insight and a framework to think about this transformation.

Over time, a few truths emerged:

  • The templates make repetitive calculations faster, easier, and more error-free.
  • The “value” of the calculations we used to charge for, though, had dropped to zero as there were so many other options to answer the same questions.
  • The calculator for doing one-off calculations was important but not a differentiator.
  • In the modern era, we expect ours apps to stay up-to-date across devices, make it possible to share with others, and take advantage of modern device features.
  • Creating templates was way too painful.
  • One-time pricing has been replaced by free or free+subscription.

So we went back to the drawing board, painstakingly making progress. We completely rethought the language for creating templates, focusing on defining them as if they were math sentences and eliminating as many “rules” as possible.

We iterated on the business model 25 times.

We tried throwing out features to see how it worked then adding them back in when the product became unusable.

We constantly questioned our own assumptions, over and over and over and over again.

We even completely developed and threw out three products, going so far as to name it something else to free us of the mental bounds created by years of PowerOne.

Five years later, the new PowerOne emerges today.

PowerOne is a different kind of calculator focused on automating repetitive calculations. We have over a hundred pre-created templates ready to use for everything from finance to engineering, investing to mathematics, business to construction.

Even better, you can create your own and share them with your team. We have versions that run online in any desktop or mobile browser, or offline on an iPhone or iPad. (Please tell us if you’d like an offline Android version.)

And everything but team sharing is absolutely free.

Create your free account and download for iPhone and iPad, available now.

And please, keep paying attention to these pages. Each week I will add a new chapter to the story of reinventing PowerOne.