Many people have been disappointed as of late because a favorite email client of theirs, Sparrow, has been acquired by Google and the team has announced that no future development will take place on Sparrow itself. The web has been lit up by people debating whether or not the move was good for Sparrow’s customers, but what about the Sparrow team? Was it good for them?
Most consumers could care less how a product gets made. They just want to love it. And with Sparrow, love it they did. But, if something is unsustainable, it’s unsustainable. Period. While some Sparrow investors were reportedly upset that the team sold out so quickly, especially given the energetic user base, many people actually saw the move as a good one for the people who made Sparrow in the first place.
The debate over acqui-hires, or talent acquisitions, is going to rage on far into the future and will continue strong after people forget all about Sparrow. There will always be one more exciting company that comes to an earlier-than-expected exit as the founding team gets snapped up by a behemoth who wants to focus their talents elsewhere. Where do you stand on the issue? Maybe these insights will help you clarify your position or at least give you a little insight into this bubbling topic.
$3 Per Sale Doesn’t Pay the Bills
Contributed by: Drew Crawford, Owner, DrewCrawfordApps
With the advent of the App Store, consumers are seeing lower prices than ever for software, a fall in price of about 10-15 fold. But the costs of making the software have not decreased, and have even gone up in some cases. Even with the high-volume of consumer purchases, software markers are squeezed for margin. Apps like Sparrow require outside investment. These investors know that margins are tight and they are skeptical of the business model of merely selling software to customers, and so they often push for aqui-hires so that they make their return.
As someone who bought Sparrow myself, I am saddened that Sparrow is shutting down, but as a developer I know that $3 per sale often does not produce enough revenue for software makers to pay competitive salaries to their employees. If we want to end aqui-hiring, we must be prepared to return to the purchase prices of five years ago. As long as we continue to pay a few dollars ...