# Economic Extortion for Fun and Profit **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 2, 2006, 12:12am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600 "2006-02-02T00:12:26Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 2, 2006, 12:12am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/1 "2006-02-02T00:12:26Z")
There’s a big company with offices in sixty countries. They make software which the market research industry world-wide depends on. It’s not great software, but it works okay. The problem is that, being aware of their near-monopoly, they charge $90,000 for their program (for a one year lease, additional years are $70,000/year.) Then there’s me. I’m a simple computer programmer and ticked off at the situation, spent the last year of my life (well, 20 hours a week for a year) creating a competitor to their software. It’s done! I intend to give it away to the people as open-source (i.e. free), so they would no longer be dependent upon the big monolithic company. Fast forward to today. I’m suddenly feeling a little, you know, greedy. Do you think it would be a good idea to contact the big company looking for money? I was thinking of saying (in essence), “Here is a copy of my software to evaluate. In two weeks, I’m giving it away free to the world. However, for the right amount, you could purchase the rights to to it and keep it from damaging your marketshare.” ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [February 2, 2006, 12:56am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/2 "2006-02-02T00:56:55Z")
Your action would be, at the very least, unethical. ---
**Author:** ![Absolute](https://avatars.discourse-cdn.com/v4/letter/a/b2d939/32.png) [@Absolute](https://boards.straightdope.com/u/Absolute)\ **Post date:** [February 2, 2006, 1:21am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/3 "2006-02-02T01:21:22Z")
> [@Bosda Di'Chi of Tricor](#): > > Your action would be, at the very least, unethical. No it wouldn’t. It’s not unethical, much less illegal. I’m curious as to why you think this is unethical. **bluetrust** put the effort into making this product. He can do whatever he wants with it. Sure, he’s threatening this company. Tough shit for them, that’s how the world works. They should be glad he’s giving them the opportunity to prevent the destruction of their business model, rather than just sending this out into the wild and watching the fireworks. As for the marketplace, he’s leaving them at the mercy of this monopoly. Tough shit for them as well. He is under no obligation to make their lives easier. If they get sick of it, they can pay someone to custom-development their own software. **bluetrust** , go for it. I wish you luck. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [February 2, 2006, 1:48am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/4 "2006-02-02T01:48:33Z")
\*\* bluetrust\*\*, I have worked in software for 6 years. The reason that big companies spend big bucks on software isn’t just for the software itself. It is for service, upgrades, training, documentation, and for someone to turn to if the shit hits the fan. $90,000 sounds like a lot of money to an individual but it may be a drop in the bucket for a big company especially if it runs critical business processes. Say a company decided to “save” $90,000 and ended up with an inferior product with poor support that causes 500 employee making $50,000 a year to lose productivity every day. That isn’t to say that free or open source software is always inferior. Things associated with Linux have done quite well. Don’t expect established companies to just drop the expensive software and grab yours. That isn’t the way things usually work and $$$$ to you may be $ to them. You will have to find a way to document and support and release upgrades. That brings us to the larger question. If you did all that work, why don’t you charge for it? That would benefit you and the software and you could devote time to making it better. Who has ever heard of a version 1.0a that was any good no matter how talented the developer? Plenty of software companies started the same way you just did. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [February 2, 2006, 2:12am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/5 "2006-02-02T02:12:26Z")
Or… they could sue you for patent infringment. I’m sure some obscure process related to their software would be patented for just this reason. ---
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 2, 2006, 2:51am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/6 "2006-02-02T02:51:22Z")
> [@Shagnasty](#): > > \*\* bluetrust\*\*, I have worked in software for 6 years. The reason that big companies spend big bucks on software isn’t just for the software itself. It is for service, upgrades, training, documentation, and for someone to turn to if the shit hits the fan. $90,000 sounds like a lot of money to an individual but it may be a drop in the bucket for a big company especially if it runs critical business processes. Say a company decided to “save” $90,000 and ended up with an inferior product with poor support that causes 500 employee making $50,000 a year to lose productivity every day. > > That isn’t to say that free or open source software is always inferior. Things associated with Linux have done quite well. > > Don’t expect established companies to just drop the expensive software and grab yours. That isn’t the way things usually work and $$$$ to you may be $ to them. You will have to find a way to document and support and release upgrades. I wasn’t saying that it would destroy their business. Just that some of their customers will inevitably make the switch to a free alternative because $90k/year is still a lot of money to smaller companies. And it only takes a few of them to switch before the big company notices that sales are down 3 - 4% a quarter. > [@](#): > > That brings us to the larger question. If you did all that work, why don’t you charge for it? That would benefit you and the software and you could devote time to making it better. Who has ever heard of a version 1.0a that was any good no matter how talented the developer? Plenty of software companies started the same way you just did. Well, I’m terrible at sales. I couldn’t compete with the big company at their level, they fly sales reps out to potential clients and do a question and answer / powerpoint session. The alternative, being the “discount” leader, sounds relatively unsexy. That’s why I thought open-source would be good, at least I’d get the kudos in the industry for being an expert and could charge more for consulting. ---
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 2, 2006, 3:07am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/7 "2006-02-02T03:07:18Z")
> [@Bosda Di'Chi of Tricor](#): > > Your action would be, at the very least, unethical. Well, I didn’t say it was nice. From their perspective, it’s quite mean. I was just thinking that given a potential loss of a million dollars or more in sales, if they had an opportunity to pay $300K to stop the work (before it became a problem), it almost sounds like a prudent investment. I think if I created the software with the aim to ruin them, it would be unethical. But I didn’t, my main motivation at the time was that I couldn’t afford the prices these guys were charging and thought, “I could do that. Heck, my software already does that. I just need to spend some time polishing it.” ---
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 2, 2006, 3:10am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/8 "2006-02-02T03:10:07Z")
> [@Shalmanese](#): > > Or… they could sue you for patent infringment. I’m sure some obscure process related to their software would be patented for just this reason. I’ve thought about that. Good thing I’m poor! They’d lose money by hitting me with a lawsuit. ---
**Author:** ![saoirse](https://avatars.discourse-cdn.com/v4/letter/s/5daacb/32.png) [@saoirse](https://boards.straightdope.com/u/saoirse)\ **Post date:** [February 2, 2006, 6:15am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/9 "2006-02-02T06:15:47Z")
Perhaps if you made it sound less like extortion? Just tell them, “I’m giving you the first chance at byuing this. Otherwise I’ll shop it around.” That way they feel like you’re doing them a favor, rather than twisting arms. Even in the no-nonsense world of business, you can’t go around delivering ultimatums. ---
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 2, 2006, 6:32am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/10 "2006-02-02T06:32:43Z")
> [@saoirse](#): > > Perhaps if you made it sound less like extortion? Just tell them, “I’m giving you the first chance at byuing this. Otherwise I’ll shop it around.” That way they feel like you’re doing them a favor, rather than twisting arms. Even in the no-nonsense world of business, you can’t go around delivering ultimatums. I agree. That would be a better approach 🙂 ---
**Author:** ![Snooooopy](https://avatars.discourse-cdn.com/v4/letter/s/ee7513/32.png) [@Snooooopy](https://boards.straightdope.com/u/Snooooopy)\ **Post date:** [February 2, 2006, 7:27am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/11 "2006-02-02T07:27:52Z")
> [@bluetrust](#): > > I wasn’t saying that it would destroy their business. Just that some of their customers will inevitably make the switch to a free alternative because $90k/year is still a lot of money to smaller companies. And it only takes a few of them to switch before the big company notices that sales are down 3 - 4% a quarter. If your software really is good enough to take a big bite out of their bottom line, I would imagine that they would come find you and throw some money at you to make their problem go away. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [February 2, 2006, 9:35am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/12 "2006-02-02T09:35:25Z")
> [@bluetrust](#): > > I’ve thought about that. Good thing I’m poor! They’d lose money by hitting me with a lawsuit. It doesn’t matter how much money you have. Paying you off would mean that they’re held at mercy y every two bit programmer with a bit of spare time and a bright idea. Suing you would be a way to scare off any potential competitors without deep pockets. Any big company will have lawyers on staff already so it’s barely going to cost them anything to send out threatening letters and you don’t have the money to take it much further than that. ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [February 2, 2006, 10:24am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/13 "2006-02-02T10:24:55Z")
You might be better off releasing your software as a lower-priced commercial offering, then let the high-priced competitor buy you out. ---
**Author:** ![Harmonious\_Discord](https://avatars.discourse-cdn.com/v4/letter/h/74df32/32.png) [@Harmonious\_Discord](https://boards.straightdope.com/u/Harmonious_Discord)\ **Post date:** [February 2, 2006, 1:23pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/14 "2006-02-02T13:23:46Z")
Selling it is what the sales repeps do, let them. The representative of a device their company makes, is always happy to offer a choice that saves a client money. It helps if they get a cut too, but the cheaper software can be the defference between a sale of their equipment or no sale. Going to a multinational company and offering not to sell can fail in many ways. They’re huge and hard to get someone’s attention that matters. Once you get their attention the person will then try to stop up from releasing the product, by financialy ruining you. Lawsuits cost a lot of money, to fight even if you are not guilty of anything. ---
**Author:** ![Athena](https://avatars.discourse-cdn.com/v4/letter/a/35a633/32.png) [@Athena](https://boards.straightdope.com/u/Athena)\ **Post date:** [February 2, 2006, 3:20pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/15 "2006-02-02T15:20:13Z")
There’s a long way between writing a piece of software and having it become successful. Unless it’s actually being used and people like it, I doubt the big company will give you the time of day. Sales, support, bug fixes, etc etc are just as important as writing the code. OK, with open-source, sales maybe are not that important. But most open source projects have a team of developers working on them, and can thus respond faster to bugs and feature requests. One guy working 20 hours a week is not the same. That’s not to say that you can’t get there. But for now, even if the software is written, you’re not a competitor to the big company. ---
**Author:** ![Waverly](https://avatars.discourse-cdn.com/v4/letter/w/57b2e6/32.png) [@Waverly](https://boards.straightdope.com/u/Waverly)\ **Post date:** [February 2, 2006, 3:38pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/16 "2006-02-02T15:38:41Z")
> [@Bosda Di'Chi of Tricor](#): > > Your action would be, at the very least, unethical. That’s a heavy accusation, and one that should come with an explanation. By the way it happens to be wrong. It is no longer altruistic, but there isn’t anything even slightly unethical about it. He has developed a product. He can choose to give it away, choose to sell it, or even choose to let the potential buyer know that he’ll market it another way if they don’t come to an agreement. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 2, 2006, 4:09pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/17 "2006-02-02T16:09:20Z")
> [@bluetrust](#): > > There’s a big company with offices in sixty countries. They make software which the market research industry world-wide depends on. It’s not great software, but it works okay. The problem is that, being aware of their near-monopoly, they charge $90,000 for their program (for a one year lease, additional years are $70,000/year.) > > Then there’s me. I’m a simple computer programmer and ticked off at the situation, spent the last year of my life (well, 20 hours a week for a year) creating a competitor to their software. It’s done! I intend to give it away to the people as open-source (i.e. free), so they would no longer be dependent upon the big monolithic company. > > Fast forward to today. I’m suddenly feeling a little, you know, greedy. > > Do you think it would be a good idea to contact the big company looking for money? I was thinking of saying (in essence), “Here is a copy of my software to evaluate. In two weeks, I’m giving it away free to the world. However, for the right amount, you could purchase the rights to to it and keep it from damaging your marketshare.” There’s nothing unethical about what you’re doing, regardless of what _Bosa_ said. It’s a business proposition, nothing more, nothing less. There are tons of people in many industries who do precisely what you are contemplating - it’s one of the reasons why non-competes are so sought after by companies and so feared by leaving employees. I know a guy in my industry who starts a company, competes against a larger competitor, and then sells out after 3 years to the very same competitor. He has done this no less than 5 times since the mid-1980’s and has done very well for himself. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 2, 2006, 4:10pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/18 "2006-02-02T16:10:41Z")
Er, **Bosa’s** name should’ve been in bold, not italics - it looks rather smarmy the way it’s written. Sorry 'bout that! ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [February 2, 2006, 4:20pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/19 "2006-02-02T16:20:05Z")
> [@Snooooopy](#): > > If your software really is good enough to take a big bite out of their bottom line, I would imagine that they would come find you and throw some money at you to make their problem go away. Or some goons. [Bill Gates on The Simpsons, while removing Homer as a competitor] I didn’t get rich by writing checks. ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [February 2, 2006, 4:34pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/20 "2006-02-02T16:34:32Z")
> [@Waverly](#): > > That’s a heavy accusation, and one that should come with an explanation. > > By the way it happens to be wrong. It is no longer altruistic, but there isn’t anything even slightly unethical about it. He has developed a product. He can choose to give it away, choose to sell it, or even choose to let the potential buyer know that he’ll market it another way if they don’t come to an agreement. No. What you do with anything that you create is _always_ an ethical issue. If he were to market this item, & then solicit bids, or offer the rights to the program, that’s fine. _ **However** _, to create an item solely to deprive someone else of their livelyhood, with no intention or effort towards sell it yourself, is to take something _out_ of our society, without making a worthy contribution. If he had created an _improved_ item, that’s different. If he creates a business, thus creating jobs (rather than damaging another firm, costing jobs without creating any), that is different. But if his _sum total contribution_ leave the world worse off than before, then it is unethical. I am a [Utilitarian](http://en.wikipedia.org/wiki/Utilitarianism) & have no apologies for it. [Next page](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600.md?page=2)