This - rewarding deviousness - troubled me about the system too.

Perhaps, instead of explicitly mentioning the Scholarship accounts on the homepage, there could be text along lines of "Struggling to get by and can't afford it? Email us and we'll see what we can do."

TL;DR - this is a shrewd play for a number of reasons.

You don't understand, it's just business.

Furthermore, the conversion of requiring people to beg via email to explain they're broke is next to zero. People won't do it. They'll take the POLR: fake accounts. Kicking them out also won't help: they can attack the brand and also if they succeed, the service looks like the bad guys. Furthermore, it builds stats by having more accounts registered on the platform. Whether those fake accounts get killed off is up to the business owner. Is padding stats worth the liability and cost of junk accounts?

We're still talking about DistroKid, so it just bought them free PR.

The point is everyone can make more money by taking a calculated gamble on positive ROI giveaways. The unit cost of an app is often pennies. Any concern about mass defection of paid users to unpaid is unlikely if the service is good and shows trying to take the high road. And that adds goodwill valuation to the brand. These intangibles make the service of higher value than a formulaic subscription service that thinks short-term only. It's not quite the same as selling gym memberships. :)

The meta is that when a service is small, keeping CAC low and getting as many users as possible while maintaining cool is hard. The churn between paid, unpaid and closed accounts is also a delicate dance to keep satisficing toward $. Sometimes giving accounts away in exchange for something non-monetary is a way go (real friends or not).

And also, don't forget gangster marketing: http://youtu.be/t73Q3f4YjwQ

I dunno... I've used an open-source license for IntelliJ in the past, and that took a lot more work than just sending an email. (Kudos, btw, to JetBrains for their great open-source licensing program!)

It's probably less work for me to send an email explaining why I think I deserve a free account than to tell the system to send emails to five email addresses that route to me, and then do whatever I need to do to validate them.

"Furthermore, the conversion of requiring people to beg via email to explain they're broke is next to zero. People won't do it."

Entirely true. But it would remove the conflict of offering the scholarship option only to people who cheat, which is the whole point. They can of course continue to also offer it to those who do, just like now.

"Any concern about mass defection of paid users to unpaid is unlikely if the service is good and shows trying to take the high road."

In my experience, this works until a user hits a moment of hardship or "meh". Then they cancel and find it's easier to reallocate those consumption dollars to something new than reboot the subscription.

But if you're not providing an essential (Mazlow) for life, isn't this going to happen anyway?

"Maslow"[1]

[1]: https://en.wikipedia.org/wiki/Abraham_Maslow

Thanks

True. Money and life are brutally efficient: but also stochastic processes. Value might exist, but it's utility waxes, wanes and sometimes waxes again. Hence the principle of letting go totally willingly... Having that much confidence in the value when it's needed again. ;)

I wasn't suggesting doing this instead of offering Scholarships to detected referral cheaters - I was suggesting doing it in addition to that.

This sounds like a good option. It's along the lines of their original approach, and by adding the friction and personal contact of an email, much less likely to be abused.

"seems to be rewarding deviousness" There is a common misalignment of values, between that which is 'practical' and that which is 'right'. You see this with arguments about such things as safe injecting rooms or wahtever.

I think this is a great practical solution. They are not being rewarded with a free product (they have that already), they are being rewarded with shame and/or understanding.

The shame of being caught out may make them stop stealing. The understanding may encourage them to stick with the product and buy when they do have the money, or recommend it to others. Win / win solutions are rare and beautiful and should not be discarded for spurious moral values.

Many people will cheat until they think someone can see them, and then stop[1]. By just reminding people that someone is watching, you'll vastly increase the proportion of people who pay.

I think this is the best way to combat hidden "just data-copying" computer crimes - because people think they can't be seen while doing them, they just need to be shown that someone can see and they'll stop. (This should work on all but the small fraction of people who will steal whatever you do - again, see [1]!)

[1] "The honest truth about dishonesty", Dan Ariely http://www.amazon.co.uk/dp/0007477333

> Having said that, no homepage mention may be turning away the honest users who might genuinely be unable to afford it.

That reminds me of Airbrake.io, whose lowest-cost pricing plan was higher than I wanted to spend on a toy site I made recently. On my phone I can't find the text on their site, but in small print on the pricing page it said something like "or, we have a developer plan, which is free for one site and one user."

It was exactly what I was looking for, and I wish there were more ultra barebones plans available for otherwise-paid services.