Subject: Re: the walls have ears
From: Paul Rohr <paul@abisource.com>
Date: Mon, 07 Jun 1999 20:11:50 -0700

At 10:08 AM 6/3/99 +0900, Stephen J. Turnbull wrote:
>To be argumentative, my friends in real estate economics tell me that
>the best way to insure that your own mortgage gets paid is to go for
>the big win.  You may end up with negative net worth for substantial
>amounts of time, but the bank will let you ride until you do get that
>big win if your trend looks positive (or at least less negative than
>everybody else's!)  

If we're talking about hypothetical business models in the age of Mary 
Meeker, I know how I'd pitch this version of our story to someone with deep 
pockets.  :-)

>Support-oriented FSB's may not need to go that
>way, but despite selling support, AbiSource looks to me to be
>dependent on a single product, thus they need a fairly big win in the
>development arena.  

I think I'm missing your point here.  

Sure, if it costs $100 million in paid development time to develop a 
bug-compatible clone of Word (hint -- it most definitely does not), then you 
may never be able to sell enough "support" for gratis versions of that 
product to recoup that up-front investment.  That would be a dumb business 
model. 

MSFT brings in $5 billion a year for the entire suite (not just Word).  
Customers are willing to pay them that much, which makes it a cash cow for 
them.  However, they're proprietary, so a libre competitor would be unable 
to charge that much for an equivalent product.  

Software economics are fun -- big losses are easy to envision, big wins are 
hard to plan for, but they happen.  :-)

Paul