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Ask HN: What is a good price for software that you license to schools?

5 points by wahwah ↗ HN
I have an idea for a piece of software that could be utilized by middle and high schools. The software would be run on my server. Basically I would charge each school a fee to let all of their students use the software. I was thinking of charging them a monthly or annual fee, what do you think a reasonable price would be?

I really have no idea how much companies charge for this sort of thing.

9 comments

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masterzora
This is impossibly little information to go on. What's the idea? What kind of competition exists? Are you targeting the more moneyed schools, the less moneyed, the in between, all of them? What are the costs to you? Is this something schools need (or can you convince them it is), is it just a "nice to have", or is it more of a "well, we need to spend this year's budget somehow"? There's not nearly enough information here to remotely begin answering that question.
plasma
I'd first work out how much its costing you to produce / maintain / support :)
mindcrime
My advice: go read @sgblank's The Four Steps to the Epiphany first.

That said, pricing is a very complex subject... volumes (literally) have been written on pricing theory. There isn't any easy, off-the-cuff answer.

abbasmehdi
There is one easy answer: optimize revenue by tweaking this differential: revenue = profit margin * volume.
fractallyte
Find out how school budgets work, and know who you're selling to.

If you intend to enter at the whole-school level, you'll probably be dealing with school managers or the school district, and annual software subscriptions are often in the range of hundreds of dollars, or greater. It can be tough to deal in this area (politics, 'preferred' partners, etc.).

Particular departments (math, science, history, etc.) have more limited capitation, but there's usually less bureaucracy. So if you're marketing toward a particular subject, it may make sense to approach a department head and find out what their needs and resources are.

(Note that this is not country-specific, so it really depends on where you are...)

In any case, you must know your market! Find out how much other educational software companies charge, attend expos, and (if possible) try to meet teachers or school managers as part of your effort to set a realistic (affordable) price.

b1twise_
I've worked at a fairly affluent private school, so I'll give you feedback based on that. However, you don't really give enough information for me to tell you what your product might be worth to a school.

- Charge annually. Schools are full of paperwork and approval processes. A once a year ritual of approval is easier than agreeing to a monthly bill.

- If it's less than 1k there's a lot less friction towards approval.

Caveats are that schools do prefer to host their own software (usually on windows) and can be willing to shell out large amounts of money for the right product (Blackbaud).

wrjrpn
What's the value of your product?