Subject: The Free Rider Problem
From: "Russell Nelson" <nelson@crynwr.com>
Date: Wed, 03 Feb 1993 23:54:06 EST

Here is what I believe to be the chief problem with commercial
development of free software: Because no one can be prevented from
using the software, only those people for whom the private gain is
more than the private cost will pay for the software.

Most software is too expensive for a single user to pay the entire
development cost.  One way to lower the cost is for multiple users to
form an association.  But then you have a Prisoner's Dilemma.  If
they defect and don't join the association, they might still get the
software.  On the other hand, if association losts their dollars,
then the association might not be able to afford to develop the
software.  Again, if the association does not drive the private cost
below the private gain, the association will crumble due to mass
defections.

Once the software is created, it will have users, and users have
support needs.  So funding for continued development will probably be
available.  But how to fund the original development?  Cygnus tried
this with its port of gcc to solaris-2 by pre-selling support at a
discount.

[John, how well did this work, and can we get a report?]


The other way to look at this, as Michael Tiemann said, is to look at
it as any other business might.  Every business takes risks, and
FSB's are not immune.  You can use excess current income (profit) to
develop new product.  You can borrow against anticipated future
support income to develop new product.

Hmmm...  You know what that means for my business?  I'm not making
enough of a profit to develop the product to replace packet drivers.
I either have to drive my costs down further, come up with more
business at the same rate of profit, or increase my level of profit.
For damn sure, working more hours is NOT the solution; see the time
on this message.

Maybe I need to get my MBA?  Or hire someone who has?

-- 
-russ <nelson@crynwr.com> What canst *thou* say?
Crynwr Software           Crynwr Software sells packet driver support.
11 Grant St.              315-268-1925 Voice  |  LPF member - ask me about
Potsdam, NY 13676         315-268-9201 FAX    |  the harm software patents do.