Subject: Re: Successful FSBs
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Sat, 21 Sep 2002 01:02:59 +0900

>>>>> "Adam" == Adam Turoff <ziggy@panix.com> writes:

    Adam> On Fri, Sep 20, 2002 at 07:19:01PM +0900, Stephen
    Adam> J. Turnbull wrote:

    >> The supportive reply is "hmm ... you've got something there: it
    >> may be a small piece of software (# KLOC) but if it integrates
    >> well into the client's operations, it's as big as the client is
    >> (# workstations)".

    Adam> I don't understand your supportive reply.

From the VC's point of view, if you have (say) a content management
package, even if it's only a small part of the full solution, you
still have a fair amount of growth prospect by selling more "seats".
The small scope means that support effort can be managable even as you
grow.  As the clients grow (and need more seats), the FSB grows, too.
This doesn't necessarily require a lot more development effort.

On the other hand, the VC can supply some help with management.  A
good VC can help place your software at a big company by making the
claim that you can manage growth (and thus serve the client's future
needs) more credible.

However, this does mean that a small, development-oriented company is
going to have to go through a "phase change" as it grows, tilting from
development to service.  Once it does it can also broaden its product
line to bigger items that require more resources to put in place.

    Adam> If one of those open source packages isn't quite working
    Adam> right, there's a clear path to getting support, paying for

Is that "no clear path"?

    Adam> features or training (absent an O'Reilly title or a healthy
    Adam> training industry for that product).

[...]
    Adam> Projects like CUPS, Ghostscript, Snort and RT seem to be
    Adam> doing a good job to be supporting their authors through
    Adam> lifestyle FSBs,

I don't know much about the others, but Ghostscript doesn't seem to be
a lifestyle business to me.  Sure, Peter believes in free software and
has done a lot to support it in many ways.  And he obviously enjoyed
and is proud of his work there.  But isn't everybody who manages their
own successful business?

OTOH, Aladdin has a licensing program which gets a reasonable return
from the customers who have sizable revenues to fund Artifex license
fees, while taking advantage of the "many eyes" with the AFPL and GNU
GPL versions.  It's arguable that most of the latter users would never
have paid a dime to Aladdin/Artifex anyway---but they submit lots of
bug reports, patches, and drivers.  Seems to me that Aladdin's
business model can easily be justified as "we bill the clients who
budget in units of $1000, not those who budget by $.01".


-- 
Institute of Policy and Planning Sciences     http://turnbull.sk.tsukuba.ac.jp
University of Tsukuba                    Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
 My nostalgia for Icon makes me forget about any of the bad things.  I don't
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