# 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:** 13\ **Page:** 2
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 2, 2006, 4:49pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/21 "2006-02-02T16:49:07Z")
There’s a good discussion of software pricing here: > **[Camels and Rubber Duckies](https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/)** > > You’ve just released your latest photo-organizing software. Through some mechanism which will be left as an exercise to the reader, you’ve managed to actually let people know about it. … My favorite quote: “…There’s no software priced between $1000 and $75,000. I’ll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs. You need a line item in their budget. You need purchasing managers and CEO approval and competitive bids and paperwork. So you need to send a salesperson out to the customer to do PowerPoint…” Honestly, $90K may very well be the fair equilibrium price for that software. If volume is low enough and you’re paying good programmers to make a quality product with good documentation, you may only be making an industry standard profit on this product. My employer makes software much more expensive than this company you’re describing. It’s very specialized stuff, and I’m guessing we have a low two-digit number of clients. We do _not_ really make a killing on that product. The per unit price is very nice, but there is a lot of overhead in this kind of operation, and we spend more time than you could imagine providing support under warranty/contract to customers. Some of the clients we support are so good at generating headaches for us that it makes my eyes water. Is your package good? Real good? Is it stable? As much as I support free software, I suggest that if you release it free and open source, it will do the world less good than if you were to release it for $995 with a $695 annual upgrade/maintenance package, and then charge $350 per hour to provide support or consulting for implementations. Are you too socially impaired, like me, to sell the product? That’s fine. At this price point, it will practically sell itself if it is viable. Create, or pay someone to create, a pretty web site with a bunch of screen shots. Put a shopping card on the site. If it takes off, you’ll have the money to farm out support and maybe even development. Or, let the big guys buy you out. If it doesn’t take off, go ahead and release it as freeware in six months. ---
**Author:** ![mazinger\_z](https://avatars.discourse-cdn.com/v4/letter/m/5f9b8f/32.png) [@mazinger\_z](https://boards.straightdope.com/u/mazinger_z)\ **Post date:** [February 2, 2006, 5:05pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/22 "2006-02-02T17:05:00Z")
> [@Bosda Di'Chi of Tricor](#): > > 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. How do you explain Linux then? That’s free. :dubious: Anyway, **bluetrust** , IANYL (standard disclaimers and all that), though I used to deal with this type of stuff all the time. First of all, get your documentation in order. Second, you’re not really a threat if you’re not in market. How is your company supposed to know your product even works? You need demos. Third, patent infringement suits are super-pesky, and I’ve work with companies who will have no issue trying to put you in the poor house. I hope you took good notes/journal, and can readily prove (though, wait for a subpoena) that your source code is independent of your company’s. Fourth, I’m not sure what your employment status is with your company you want to “extort” (which I would call that legally, imo), but if you want to keep your job, I would try to keep that stuff to yourself. Fifth, do you know all those employment agreements you signed when you first started? I’m pretty sure one of them says that they own anything you make. In general, they’re not that broad, but if you’re doing a derivative of their proprietary software, then I can guarantee that their will be issues. Sixth, you might run afoul of your company’s own proprietary/confidential policies. The best way to avoid this is to ensure that your software isn’t based of your company’s. Selling and developing a competing software product isn’t as hard as it looks, imo. My first job after leaving my firm was to work for a startup. I accompanied my sales team to almost all of their sales calls. If those buffoons could do it, anyone with half a brain can do it, too. Your biggest obstacle is going to be getting a sales lead. You need to know procurement people, IT managers, data center managers, (and in your case, marketing managers), etc. Offer to do them demos and take them out to eat and stuff. I’ve seen people who started out of their garage (system security), and they started by giving the stuff away for free. Like you and at least one other have said, you can charge consulting and maintenance. Also, $90k in the software world isn’t that huge of a cost, especially if its enterprise software. ---
**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, 5:51pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/23 "2006-02-02T17:51:29Z")
> [@Bosda Di'Chi of Tricor](#): > > No. \ You mean ‘in your opinion’, because I’m not buying your personal code of ethics, and you already know that you can’t objectively prove this particular scenario is unethical to anyone but yourself. ---
**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, 7:39pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/24 "2006-02-02T19:39:24Z")
> [@mazinger\_z](#): > > How do you explain Linux then? That’s free. :dubious: Yes, but as I understand it, it is also customizable in ways commercially-available programs are not. That is an improvement, ergo it makes people who _want_ a customizable item happy, ergo it is ethical, as it provides that which cannot be had otherwise. 🙂 ---
**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, 7:47pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/25 "2006-02-02T19:47:52Z")
> [@Waverly](#): > > You mean ‘in your opinion’, because I’m not buying your personal code of ethics, and you already know that you can’t objectively prove this particular scenario is unethical to anyone but yourself. Are you capable of proving _anything_ yourself? Ethics are derived in part from one’s personal philosophy. They are therefore not a completely objective phenomina, being influenced by our individual perceptions of life. I provided a link to an article on Utilitarianism. I suggest you read it, & apply it to what I have already written. [Utilitarianism](http://en.wikipedia.org/wiki/Utilitarianism) > [@](#): > > Utilitarianism (from the Latin utilis, useful) is a theory of ethics that prescribes the quantitative maximization of good consequences for a population. It is a single value system and a form of consequentialism and absolutism. This good is often happiness or pleasure, though some utilitarian theories might seek to maximize other consequences. Also– > [@](#): > > From the principle of utility, he found pain and pleasure to be the only absolutes in the world: “nature has put man under the governance of two sovereign masters: pleasure and pain.” From this he derived the rule of utility: that the good is whatever brings the greatest happiness to the greatest number of people. Later, after realizing that the formulation recognized two different and potentially conflicting principles, he dropped the second part and talked simply about “the greatest happiness principle.” Will the introduction of this new program make more people happy than the rather extortive approach in the OP? If “yes”, then it is the more ethical of the two. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 2, 2006, 7:52pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/26 "2006-02-02T19:52:15Z")
> [@Athena](#): > > 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. Go away, little man, we will throw money at you WHEN you start stealing our market share. Until then, you are a low risk and not worth compensating for. ---
**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, 7:56pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/27 "2006-02-02T19:56:24Z")
Bosda, I don’t know about anyone else, but I don’t care about Utilitarianism or your adventures in the ethics of utility. But if you want to flog a particular philosophy, GD is right place to do it. ---
**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, 7:58pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/28 "2006-02-02T19:58:19Z")
> [@Waverly](#): > > Bosda, I don’t know about anyone else, but I don’t care about Utilitarianism or your adventures in the ethics of utility. But if you want to flog a particular philosophy, GD is right place to do it. Perhaps the question should have been asked in Great Debates anyway, as it is an ethical one. ---
**Author:** ![Lissa](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lissa](https://boards.straightdope.com/u/Lissa)\ **Post date:** [February 2, 2006, 9:39pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/29 "2006-02-02T21:39:15Z")
I work in a museum. We want to computerize our inventory-- hundreds of thousands of artifacts-- so that they are searchable by researchers and the general public. We’ve had this plan in the works of years now, but our problem is funding. Just like in the OP, the software which is most commonly used by museums for this purpose is outrageously expensive. We only have five people on staff, and a budget which makes deciding between buying vaccuum cleaner bags and archival materials the subject of a board meeting. We would sing praises to the gods if someone did with museum software what the OP is suggesting. ---
**Author:** ![Cornelius\_Tuggerson](https://avatars.discourse-cdn.com/v4/letter/c/13edae/32.png) [@Cornelius\_Tuggerson](https://boards.straightdope.com/u/Cornelius_Tuggerson)\ **Post date:** [February 2, 2006, 11:25pm UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/30 "2006-02-02T23:25:57Z")
> [@Bosda Di'Chi of Tricor](#): > > I am a [Utilitarian](http://en.wikipedia.org/wiki/Utilitarianism) & have no apologies for it. Ain’t it funny how a philosophical school that does not explicitly mark slavery as a bad thing would find flaw with some honest to god competition in the software industry. ---
**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 3, 2006, 12:03am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/31 "2006-02-03T00:03:38Z")
> [@faldureon](#): > > Ain’t it funny how a philosophical school that does not explicitly mark slavery as a bad thing would find flaw with some honest to god competition in the software industry. Isn’t it funny how the termperature of spit in Wichita has nothing to do with the price of beans in Boston? Next thing you know, he’ll be hooting about Nazis. :rolleyes: BTW–neither Socrates, nor Plato nor Aristotle explicitly marked slavery as a bad thing. Nor did Christ. Nor Buddha. Nor Mohammad. Nor Confucius. Slavery was not condemned until the late 18th Century, as far as I can tell. ---
**Author:** ![bluetrust](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@bluetrust](https://boards.straightdope.com/u/bluetrust)\ **Post date:** [February 3, 2006, 1:30am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/32 "2006-02-03T01:30:12Z")
> [@Mr. Slant](#): > > As much as I support free software, I suggest that if you release it free and open source, it will do the world less good than if you were to release it for $995 with a $695 annual upgrade/maintenance package, and then charge $350 per hour to provide support or consulting for implementations. > Are you too socially impaired, like me, to sell the product? > That’s fine. At this price point, it will practically sell itself if it is viable. Create, or pay someone to create, a pretty web site with a bunch of screen shots. > Put a shopping card on the site. > If it takes off, you’ll have the money to farm out support and maybe even development. Or, let the big guys buy you out. If it doesn’t take off, go ahead and release it as freeware in six months. I like your plan (especially when taking into account the Joel on Software article.) There isn’t anything sacrificed with this approach. It’s a little more work but is pretty great. Thank you for taking the time to offer a different approach. I sincerely appreciate it. When working on the same project for so long, sometimes it’s easy to get stuck in the same train of thought and not realize that other solutions could work better. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 3, 2006, 3:29am UTC](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600/33 "2006-02-03T03:29:47Z")
I really appreciate your thanks. That was probably the biggest thank you I’ve gotten on this board in years. Let us know how this turns out. I’d love to hear! [Previous page](https://boards.straightdope.com/t/economic-extortion-for-fun-and-profit/342600.md?page=1)