Max Freeman is Alibre’s Vice President of Marketing and is probably the person who I have had the most number of beers with during my stay in Richardson, Texas, for the past five days. I sat down with Max and asked him a few questions about Alibre’s marketing and some other issues.
Deelip: Marketing is the main part of Alibre that I have been most critical about in my writings. I asked Paul Grayson this question earlier and would like your take on it as well since you are the person responsible for the messaging. The bulk of the messaging coming out from Alibre is almost always about price. Is this something that is going to change?
Max: We have been experimenting with a lot ways to promote ourselves and get the message across to our customers and prospects. As you know the free Alibre Design Express was the most successful marketing campaign that we ever had. It got literally hundreds of thousands of people to come take a look at us. We have been listening to people, especially the kind of stuff that you have been writing on your blog about us concentrating our messaging on price and not on functionality and we have already begun the process of changing that a little. For example, I am in the process of designing a whole new email campaign whose focus has very little to do with the cost of our software. And that is direction that we probably want to keep in going.
The point of the recent price adjustments and discounts was to find a price point that we thought was stable for our entire product line – Standard, Pro and Expert. We are now at a point where we can concentrate on spending our efforts and marketing money on conveying what can be done with our software and let the price speak for itself. This will obviously help us because the more our customers and prospects begin to realize what our software can do given its price, the more they will be interested in us. At the end of the day, a lot of people really do not need a lot of that high end stuff and we are really not going after those people anyways. We are after people who are cost conscious. They do not have an unlimited budget but they have the need to get something out of the door. So we plan on doing a better job at explaining what our software can do to help them accomplish that. The price will be more of a side note, although it will be an important one. In the last month we have actually started putting into place things that will help us achieve this.
Deelip: Do you want to always position Alibre Design as a low end MCAD product or do you have plans on offering more advanced capabilities?
Max: The low cost factor really blows down to our mission statement. Its not us trying to be a really high end software package and then just saying that we are low cost. I mean, who we are, what we do, what we try to accomplish and how we make decisions in terms of what do we go ahead and develop, who are we developing for, all of that ties in to the general premise behind our company. And that is for about 80% of the people out there, we want to provide a 100% of what they need.
Deelip: That’s interesting because earlier you used to say that you offer 80% of the functionality for 20% of the price. So are you now saying that you have changed things a little. Is that still valid? Do you still stand by the 80-20 thing?
Max: Yeah, we used that 80-20 for a while and I guess internally we were thinking about the revised version because we realized that we were not really saying the right way. Basically we are look at asking the questions like can you get something done? Can you do it efficiently? And you do need to spend an arm and a leg on it? So what we found from talking to people is that the vast majority of the people out there really do not need to do really complicated things. Very few need to design assemblies that contain thousands of parts or do high end surfacing.
Deelip: A lot of people, including me, have been wondering how many customers did you get after you slashed your priced to $99. I know that Alibre is not a public company and is not required to disclose its numbers. But is there some kind of a percentage that you can disclose for me and my readers?
Max: I will need to look it up but it probably something like we increased our customer base by about 12% almost overnight. I mean, it was a really huge spike.
Deelip: I guess the next question is whether the increased levels are sustainable?
Max: Well, obviously the high numbers at the start of the offer were not going to stay up there. But we are definitely selling far more than we need to make up for the decrease in price.
Deelip: Are we going to see a gradual increase in price? I ask because first Alibre Design Standard was $97 and not you need to compulsorily buy maintenance which makes it $197. I understand that you have not locked prices for life, but I am curious to know whether we will see prices of Alibre Design Standard go back to $1000 levels in say a year or so?
Max: No. That is not going to happen. And this just goes back to the question of sustainability. One thing that people do not realize is that the majority of our customers are users of Pro and Expert, not Standard. A lot of people came and bought the $99 Standard and a lot of them are already upgrading to Pro and Expert.
Deelip: When you formalized the price of Standard to $97 you sweetened the deal by adding Alibre Translate for free. Now we see that Datakit, the company whose technology was used in Alibre Translate, has thrown a fit and has asked you to remove Alibre Translate from Standard. This raises some questions on how dependent you are on your partners. I mean, is it possible that Spatial will one day throw a fit and ask you not to ship their ACIS modeling kernel in a $97 product or maybe Siemens PLM will not allow you to use their 2D DCM?
Max: Well, we have been giving Alibre Design Express for about five years now for zero dollars. And Express contains all the core technologies that all the other versions have. The thing with Alibre Translate was that it was an add-on and not a part of the core technology. Rest assured, the core technologies are in not in jeopardy in any way.
Deelip: Another criticism of Alibre has been that with such low prices how can the company spend money on R&D and improve the product. What do you say to that?
Max: Well, like I said earlier, we have been giving away free stuff for a long time now. So we are real good at doing that. We are also very good at staying as lean as a company can be. And this is in stark contrast to our competitors. They are huge corporations and they have a lot of bloat and they need to pay for it. That’s how our prices can be so low.
However, in all these years we have been constantly adding new stuff to our software. We are already posting stuff on our forums about the new stuff that we are working on and what will be part of 2011. My point is its much easier for us to run our company and have money to spend on R&D than people may give us credit for.