I generally agree that the email client market is a hard, hard market to be in.
One thing I think could have worked to bring in substantially more revenue is price differentiation.
A number of people have claimed that a significant number of Sparrow users were on paid Gmail plans. If Sparrow had split their pricing in a similar way (eg, $3 if you are on the free plan, $20 if you pay to use Gmail) then they might have brought in significantly more revenue. Additionally, the people paying for Gmail are already known to be to be people who spend money on email services.
One thing I think could have worked to bring in substantially more revenue is price differentiation.
A number of people have claimed that a significant number of Sparrow users were on paid Gmail plans. If Sparrow had split their pricing in a similar way (eg, $3 if you are on the free plan, $20 if you pay to use Gmail) then they might have brought in significantly more revenue. Additionally, the people paying for Gmail are already known to be to be people who spend money on email services.
Joel Spolsky's essay is the best resource on this: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...
Of course, some kind of recurring revenue is the real "solution" here.