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So now you ve got your product deep into Beta testing. You re frantically fixing bugs and adding features that your testers insist are needed (they re probably right), because you want to keep them from bailing out on you. This is a good time to start thinking ahead about sales and marketing. And your first consideration the first thing many prospects will ask you is how much you re going to charge for this jewel. There are a lot of things that can make or break your business. The price of the product is right up there on the top ten list. Overcharge and you won t sell many. All you ll hear is crickets. Undercharge and you ll do a land office business. But, you won t cover your costs. The more you sell, the broker you ll get. So I think, even though there s a lot of words and not many pictures in this section, it s worth devoting an entire chapter to the question of how much to charge for your product.

Livingston: How d you come up with Apple Wozniak: Steve came up with it. I do remember that one. I picked him up at the San Francisco airport and I was driving down the Bay on 101 and then on 85, and it was on 85 that he said, Oh, I ve got a name for the company. Apple Computer. Both of us were sitting there trying to come up with techie names that were clever, but nothing was going to be better than Apple. And I said, But what about Apple Records (Which is funny because we re still having problems with them.) And he said, They re a different company.

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So we said, OK, we ll do Apple Computer. In those days there was no money yet in this microcomputer business, and big experienced companies and investors, analysts those kind of people, that are trained in business and much smarter than we were they didn t think that this was going to be a real big market. They thought it was going to be a little hobby thing, like home robots or ham radios, that a few techie people would get into and really it wasn t going to go to the masses. In the Homebrew Computer Club, we felt it was going to affect every home in the country. But we felt it for the wrong reasons. We felt that everybody was technical enough to really use it and write their own programs and solve their problems that way. Even when we started Apple, we had very mistaken ideas about where the market was going to be that big. We didn t foresee the VisiCalc spreadsheet.

Livingston: Had you quit Hewlett-Packard Wozniak: That was very tough We started selling the Apple Is, and I stayed at Hewlett-Packard I still intended to be at that company forever Our calculator division moved up to Corvallis, Oregon, and my wife didn t want to move to Corvallis and I did, so that was lucky because otherwise I would have been up in Oregon and Apple never would have happened So I stayed here and I moved into another division of Hewlett-Packard across the street that made the Hewlett-Packard 3000 minicomputers I was working there for a while getting educated on the HP 3000 for the Apple II, we knew it was so good that was a product that broke ground in every which way.

The Apple I, oddly enough, was probably more important, because it said that a computer of the future is going to have a keyboard and a video display and it s going to look like a typewriter It s going to be roughly that size And it s funny, but every computer since the Apple I, including the Polymorphics technology Sol computer that came next (it was out of our club), had a keyboard and a video display No computer had done this before that No small computer was coming with a keyboard yet The Apple I was the first and the Apple II was the third Basically every computer since then had a keyboard and a video display The world has never gone back from that day Now the Apple II was the great design I designed it very efficiently with very few parts amazing design We added color.

In order to answer the question of what price to put on your product, we have to talk a little business and economics. (Please try to suppress the yawn. This is important stuff.) First, some definitions. You probably know something about these concepts, either explicitly or intuitively, but a little review never hurts. Revenue: Revenue is all the money that folks pay you for the privilege of buying your product, plus any other money that comes in from other activities. For example, to keep the cash flow going while you get your product ready for market, you may be doing a little consulting or custom programming. After you start selling, you might have a revenue stream from extended annual support and maintenance fees. This all falls under the heading of revenue.

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