Subject: Re: Order entry application user group
From: Bernie Thompson <bernie@cosource.com>
Date: Mon, 29 Nov 1999 08:31:34 -0800


Brian Bartholomew wrote:

> Let's imagine Tim's project will cost $100K for the highest value
> programmers he can find to work on it.  Will your incentive and
> contractual system work when the payments are $10K, made by the most
> profit-maximizing, free-rider-dumping payers out there?

If 

(1) there are more than a few buyers (say 5 or more) to split the costs,
resulting in a great savings vs. doing it all yourself and
(2) those buyers are comfortable with the free-rider issue (big if!).

Then, yes, cooperative marketplaces can work for $100K or $1M projects
(like Tim's order entry program).

The free-rider issue is a big one for any contribution back into the
free software pool.  What we've focused on is asking the customer "This
software solves a problem you are struggling with.  What is a solution
worth to you, even if others get it for free?"  Because we aggregate
buyers, we don't need to find a single buyer for whom it's worth the
whole cost.  We can cobble together a lot of smaller $ amounts.

Of course, many customers will have the mindset that if others get it
for free, the value to them is zero -- even if it made their lives
easier.  But our experience is that there are customers more
sophisticated that this, and recognize there is SOME value in the
solution for them.  And we hope to increase that proportion of customers
over time by proving ourselves and through better evangelism.

It certainly helps our argument that not EVERYBODY else is a free rider
in a cooperative marketplace -- the customer knows exactly what they're
paying, and (based on the price of the project) know that there'll be
(many/several) others sharing the cost.

Now, so far our biggest funded project is $1290.00 (USD).  So we don't
have any proof yet that a $100K project can work, but we'll be a failure
(conceptually and financially) if we don't get there!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Bernie Thompson             bernie@cosource.com
Free Market. Free Software  http://www.cosource.com/