Dan Provost of Studio Neat:

Studio Neat is in a unique position. We are not just app developers, we also sell physical products. Products that are meant to work with the apps in a way that enhances both, as is the case with the Glif and Slow Fast Slow or Frameographer. What if we make apps that are free with “ads”, but the ad is simply for our other products? You know, the products that actually make money?

What a clever business model. It’s similar to what I’ve thought bands and musicians should have been doing for years — give the music away and sell merchandise and concert tickets in order to pay the bills.

There’s no shortage of application developers that are willing to give their software away for free, but you’re never going to build best-in-class software unless you charge for it. That is, unless you can subsidize the cost of development with the money you make from another business.

How can other developers compete with you if all of their apps cost the same as yours (free), but you’re the only one actually making enough money to put in the time to make your app great?