David Emery Online

Marketing or Developing

21 November 2006

You may or may not have seen that Carson Systems is selling it’s poster-boy web-app, Drop Send. This is made all the more interesting as they’re charting the progress of the sale on their behind the scenes blog, Bare Naked App.

They’ve revealed a few interesting tidbits, including how many users they have and their current monthly profit – $6,941.81. Not too bad for a web app in a competitive space (http://www.yousendit.com/ I think does better, based on anecdotal evidence), but nothing that special.

The other thing they’ve revealed is the minimum selling price: $900,000.

Those two figures just don’t add up, if you ask me.

For $900,000 you could easily develop and market an app to a similar position in the marketplace; better then that, though – you could develop an app that has much more potential to expand and grow then Drop Send ever does. The market for a file sending app is a small one, and it’s only going to get smaller over time as technology progresses (when broadband is ubiquitous and email/IM have better large file support). Don’t get me wrong, Drop Send is a great niche product, and there’s a lot to be said for doing one thing, but doing it well.

It’s just not worth that much.

However, the purchase price is a tip of an interesting ice-burg; Carson Systems are not developers – they’re marketers. If you take a look at their home page, you’ll see they make another app – Amigo – which again is a very small, niche app, but also that they organise conferences and workshops.

These events are really popular, and by all accounts very successful (I’m trying to bag a pass to Future of Web Apps 2007 from work as we speak). These are obviously where they make there money (and I’m sure they’ll readily admit it), so why bother with the web apps?

Credibility.

The fact that they make their own apps gives them a huge amount of credibility amongst the developer community, and enables them to hook in and connect with a much wider range of developers then they would be able to otherwise. It’s not a focus (although I’m sure it was historically), but it adds so much to their story – “Hey, we’re developers too – come to our little workshop!”.

This all comes back round to the high selling price of Drop Send; because they’re all about marketing and publicity – which they have to do for their conferences to be successful – means they already have a captive audience ready to be sold things.

Yes, this even means companies.

It’s a pretty impressive story to be telling, but the Carsons seem to have pulled it off – and more power to them. It really shows both the power of having a believable story behind your brand and also the benefits of diversifying beyond your original area of buisness