An app for your toaster

Upselling extra features might make it possible to sell a simpler base model and let customers choose more later. It’s a hardware idea I play with in this 2011 video.

Upselling extra features after the first purchase

My iPhone got me thinking that you don’t only pay for the phone. There’s also a subscription and the apps you choose to buy.

I also remembered an old CD player where a cheap and a more expensive model looked very similar inside. It made me ask whether more products could offer features in different stages.

A washing machine or a camera

I imagined a simple washing machine where customers could choose an extra programme later. Or a camera where you could buy access to more options after starting to use it.

I’d just bought a camera for my trip interviewing Danish entrepreneurs. Some menu features weren’t available, and that set me thinking.

I hadn’t investigated why they were greyed out in the menu or whether they could actually be sold as software extras. It was inspiration for an idea, not a technical specification.

The need can become clearer as you use the product

I compare it with choosing a cheap hotel room from home and later wanting a better view when you’re there. You can discover that an extra is valuable after making the initial choice.

My thought was that you could make the first purchase cheaper and give customers the chance to expand afterwards. The amounts and products in the video were rough examples from 2011.

I didn’t know how far the idea could go. But I thought it was exciting to consider whether a base model and optional features could be used in more kinds of product.

Upselling extra features: The CD player sparked the thought

I remembered a CD player I’d bought many years earlier. I had the small model, while one of my friends had the big one. They looked similar, but the expensive one could do more.

When we opened them and looked inside, we discovered they were completely identical. The difference was that the buttons for advanced features hadn’t been brought through to the front panel on the cheap model. If I drilled a hole in the casing, I could actually reach in with a nail and access the extras.

That was the experience I remembered while sitting with my iPhone. You buy the phone, but quickly spend more: A data and phone subscription, apps and various things you want along the way. Why couldn’t you use that thinking with more physical products?

A cheap washing machine with extra programmes to buy

Imagine a lovely washing machine for DKK 2,000. That was my hypothetical example, not a specific product. The base model might just cover costs and a small profit. It had a display and the sensors needed.

Once customers had it home and started using it, you could offer an extra energy-saving programme. In my example, that might cost DKK 75 once or perhaps DKK 10 a month if it could save the customer a few hundred kroner a year in return.

I thought sensors and things like that were gradually becoming so cheap that much could be built in from the start but only made available when the customer chose it. That was the idea I was interested in: A lower initial purchase and the chance to expand later.

The camera’s greyed-out menu items looked like temptations

I’d just bought a new Canon HD camera for my travels and interviews with Danish entrepreneurs for Amino. It was a small professional camera you could take with you. I remembered the price as around DKK 11,000–12,000.

As I browsed the on-screen menu, some features were crossed out. I hadn’t investigated why. Perhaps some sound settings required another microphone or other equipment. Of course I could read the manual, but it made me think: What if I could simply buy access to those options?

Let’s say the camera instead cost DKK 10,000 and said: Martin, for DKK 500 you can now use two microphones with separate channels. Or you could buy an infrared function or something else entirely. Those were hypothetical options I invented while talking, but couldn’t that become part of the future?

Planes, computers and perhaps a toaster

Airlines already did something similar. You got a very stripped-down price, then paid extra for luggage, food and other things. We knew it from computers too: You bought the machine and could expand it afterwards with software.

I mentioned computer suppliers’ opportunity to earn from the trial software included. If customers bought an image-editing program, for example, the supplier could get part of the price. Or there were accessories such as printer cables, where I thought the gap between production and selling price could be enormous.

Why not take the idea all the way down to a toaster? The base model could toast for three minutes. But if customers wanted it to detect automatically when the bread had the right golden colour, they could buy that feature. I played with one krone a month or DKK 50 once as examples.

The point was to sell the basic product more cheaply than competitors and upsell afterwards. I thought people would eventually want to pay extra once they had the product and could see the value of the add-on. I discuss my own experiences of developing businesses in Iværksætter til jeg dør.

The last DKK 75 feels different at home

When planning a holiday at home, you might choose the room facing the courtyard because it’s cheaper. Once you’re there, you might think: Why the hell did I save that money when I could have been sitting looking over the Mediterranean?

I also used a Swiss Army knife as an image. In the shop, DKK 300 might feel expensive, so you choose the smaller one for DKK 225. But once you’ve had it home and used it, an offer to get the big one for another DKK 75 can be really tempting. It’s the same money, but you see the upgrade differently.

That was the experience I thought manufacturers could use. More products could communicate through Bluetooth or Wi-Fi. My own scales had already had Wi-Fi for a couple of years and hadn’t been particularly expensive. So I thought it seemed possible to give more things access to new features through the internet.

Perhaps the idea wasn’t new. But I was getting a little carried away with it: Could we get cheaper, simpler products, then gradually buy access to the sensors and features we actually needed? I believed we could.

Have a great weekend. Best wishes, Martin