Subject: Re: OSDD?
From: Brian Bartholomew <bb@wv.com>
Date: Tue, 25 Aug 1998 00:02:35 -0400

> The response was that this idea, and most of the other business
> models espoused by the open source community, were "pre-Industrial"
> - that the Industrial Revolution (and I'm paraphrasing here, so be
> gentle) allowed someone with a bright "idea" to be able to reap
> rewards persistantly over time due to having developed that "idea".
> And that this ability was crucial to running a 20th-century
> business, particularly a technology business.  Patents were invented
> to recognize and protect this aspect of business.

Probably once all true.  Back in the middle ages, it took 1,000*
peasants farming their little hearts out to support one nobleman doing
nothing productive all his life -- going overseas for education, then
coming home and goofing off in his lab.  Ideas were rare and precious
and deserved to be rewarded and preserved for the good of society.

Nowadays, nobody with half a brain starves in the US, everybody is
educated and has lots of leisure time.  You hear great new ideas
proposed as idle conversation on the commuter train.  Ideas are a lot
less valuable than they once were, so the values and laws surrounding
them should adjust.

* Made-up number.

> The bright view of this is that it can allow small companies with
> exceptionally bright employees the chance to compete against the big
> boys should they be lucky enough to come up with such a valuable
> idea.

Price a patent lawsuit sometime, either bringing or defending.  The
idea that patents protect the little guy is mostly a fiction.

> Until it can be shown that such a pledge of "capped profits" would
> increase sales, such a pledge would be a pledge to leave money on
> the table, money you've rightfully "earned" under the way business
> works.

Yes, but I expect capped-profit software to be so good and so cheap
that the uncapped competitors will have to change their terms.  To
start a price war, you have to lower prices.  You don't start a war
unless you think you can win.

> It's also unlikely you'll hit your $$ targets, because many people
> will wait until it's free, even if in doing so they prevent it from
> ever becoming free.  Who wants to be the last person to pay?

Reducing the free-rider problem is one of the details I didn't mention
previously.  My answer is to sell to the early adopters for a high
price, then refund the early adopters with money from the late
adopters, who buy at a lower price.  The last time I proposed this
scheme on fsb, the counterarguments were (a) it's new and different
and scary, (b) corporations want the price to be fixed, and (c)
transaction costs make it unviable.  I believe (c) is solvable with an
electronic bank gatewayed to VISA, and (a) and (b) are solvable with
marketing and PR.


League for Programming Freedom (LPF) ftp://ftp.gnu.org/pub/lpf/patents.text
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Brian Bartholomew - bb@wv.com - www.wv.com - Working Version, Cambridge, MA