Movable Type blows a Drag Race

Mena's Corner: Movable Type Developer Edition 3.0. Movable Type is probably the leader in the drag race for blogging tools. Like most classic early stage drag races, there are literally a hundred competitors.

Yes, Still Movable Type did a great job early on by offering more features like multiple authors, etc. They were the darling of the early influential end users in this category.

But, they just introduced pricing that is the classic mistake of early market leaders. They raised their price from essentially free to somewhere in the $100-600 range. That's just amazing given that 99.99% of all tools (that is except for Microsoft Office) aren't priced that high for average consumers.

So, they are going to lose lots of good will even if they correct because they thought they had won the drag race and could just raise prices. Substitution is already happening 24 hours afterwards with folks on the Movable Type page actually recommending competitors! Hows that for free advertising.

What's the lesson:

1. In a drag race, the point is to get to a high share and only then look at differential pricing. Raising prices in face of competition is a good way to lose share.
2. In a drag race, doing anything that alienates your loyal base hurts. Pricing is a good way to hurt the base. For instance not having any upgrade pricing or preferential treatment for early users is a super typical sin amongst drag racers. For instance with Windows, pricing started at $10 and took two decades to get to $100 or so.
3. In a drag race that you want to convert to a platform, getting ubiquity is super important, so have the longer term view. And just that long to eliminate upgrade pricing on Office.
4. Even sadder is that they had a chance to move to a platform play which would feature distinguished pricing. That is, keep it free for the masses, but charge $50 for pro-sumer editions and $1,000 for departmental and $5,000 for enterprise editions. That would actually have gotten them much more revenue. You can charge for new features or new support, but going backwards is super hard, even for the biggest players.