A New Software Business Model for Scripting Stuff

The deeper I get into Radio and blogging the more interesting and troubling that I find the possible business model associated with it for third party developers.  People are writing really, really good tools like Jon Udell's title stuff, Mark P's stapler, Paolo's design tools and more.  Right now people are giving them away but what if they want to make money from them?  There's nothing wrong with that.  Here's the problem:

When products are cheap, there is a limited amount that people will pay for tools associated with it.  Think about it -- if something costs $39 annually (i.e. Radio), how much will you spend for a tool?  $100?  Probably not. 

It's probably more like $5 or $10 and then the real problem is that getting people to make a credit card or PayPal transaction this is this small is hard.  They just don't want to go to the trouble of filling out the form.

Here's the suggestion: Create a business model where third party authors can be regularly added to a product like Radio and get a cut of the proceeds.  Here are the steps:

1. Create a new product called Radio Pro.  Give it a price of $69 annual.  This gives a $30 margin to share with third party developers.  UserLand should take $10 of that as their cut as a "distributor".
2. UserLand needs to publish a coding spec that developers have to adhere to for their product to be bundled into Radio Pro.
3. Create a web page where developers can upload scripts and descriptions.  Let users comment on them "that's worth some extra money" or "Nah...".  Ultimately UserLand must make the decision of course but capture the user input since Radio is a highly user driven product.
4. Let UserLand assign a percentage of the $20 to each bundled tool.  For example RSS Stapler might get 10% of the $20 or $2 at the start.  As new third party tools enter the Radio fold the actual $ would go down but, presumably, the added features would increase UserLand's overall Radio sales and thus higher revenues to the individual tool vendors.
5. Put a revised help screen that states "For help on stapler email staplerhelp@userland.com which redirects to Mark P" and require vendors to answer all questions in the UserLand forums on their stuff.  And, if the vendor fails to provide adequate support, pull them from Radio Pro.
6. Require the vendors to contribute web based documentation that Lawrence at UserLand has to approve with a criteria of "This is documented well enough that it won't cause too much support".
7. Remember Radio is an annual license fee that is renewed every year.  This means that script authors get paid their cut every year!  And gives them an incentive to keep working on their tools (Stapler version 13 anyone?).
8. Allow vendors to offer a higher end version of their tool as well so they keep their options open.

Works for Web Services Too!

This extends to Web Services as well.  Think about a search service like Atomz but blog aware that gets pung (past tense of ping???) whenever your blog is updated and then indexes it in real time.  Here are some other services that could be implemented: http://www.fuzzygroup.com/scottsradio/#services.  Some of the services located on this page are free but the bandwidth intensive ones could easily be distributed with this model 

NOTE: Even if people distribute some of these scripts and such for free also there is a benefit to having them bundled -- they work out of the box and there's support.

NOTE: I'm a huge believer in Open Source but I also develop and sell software for $.  There's nothing wrong with it and both models can and will co-exist for a long time to come.

© Copyright 2002 The FuzzyStuff. Last update: 5/8/2002; 9:41:04 AM.