Subject: Re: Revenue and business models
From: DV Henkel-Wallace <gumby@henkel-wallace.org>
Date: Tue, 13 Jun 2006 20:29:41 -0700

I'm not making myself clear to at least Stephen and Tom so I'll  
blather on  little more, at least until the train gets to my  
station.  Press "D" if you don't care.

First of all: your customer doesn't care what you think.  Stephen  
says, 'of course: that's what business is all about'.  But Tom (and I  
doubt he's completely alone in this) worries about a complicated  
"Warranty" for her to sign.

Let me repeat: YOUR CUSTOMER DOESN'T CARE WHAT YOU THINK!

How about you offer your customer a choice:  "I'll offer you the  
software you want (presumably modified -- ed)" and you choose from  
the following three options:
  1 - you give me $300K upon delivery.
  2 - you give me $30K a month for the 12 months after delivery.
  3 - you give me $.35 per unit until your $400K bill is paid off.

You could offer her some support over 12 months too for any of the  
three options.

You don't take away any of her freedoms by offering this -- she can  
still give the software to someone else if she wants -- but frankly  
most people are too busy making widgets to bother.  You've just  
offered her a like-to-like comparison with your competitor on terms,  
and so your cust can now compare money and features, which is easier  
for her and for you.

Skip the clever agreements and stick to value.

Here's some more perspective:

I remember Matthew J. Szulik telling me just before Red Hat announced  
that their server edition would cost the same as Windows' server  
edition (to paraphrase), "<some people in the company> were worried  
that with a price so high nobody would buy it.  I said if we claim  
our product is as good or better then it's worth at least that much.   
If you think people won't pay, do you really believe it's worth that  
much?"

-g