Thursday, May 29, 2003

This is intended as a response to Dave Winer's recent 'editorials'

Who will pay for software?

Who will pay, part 2

about getting paid for software development. I really wish people would stop writing things like this which are so obviously self-concerned and poorly thought through so that I wouldn't have to waste my time with responses like this that no one cares about anyway just to settle my brain.

Not surprisingly, these articles read like they were written by a software developer with a lot of money (for those of you who don't know, Dave Winer is a software developer with a lot of money... I don't think anyone would argue with that).

I want to start with the observation that great software engineers make great software engineers for the same reasons that they make lousy philosophers, and are lousy for support and documentation as well... because they are so involved with themselves and what they're doing, almost obsessively so, that they are really incapable getting outside of themselves and looking at what they're doing with the appropriate perspective.

Software development is a very self-involved thing. As someone who makes a living in IT primarily and is only involved in development secondarily, I want to say that these fields are almost contradictory. IT, especially support, is about knowing as much as you possibly can about as many technologies (OS platforms, applications, protocols etc.) as you possibly can. A good IT person is very open minded... and has to acknowledge that there are potentially limitless ways to accomplish any goal. A good IT person is platform agnostic. That having been said, in this regard at least, I haven't met very many good IT people. You can't marry yourself to one platform or another, you can't choose sides because the devil is in the interactions between the complete collection of technologies that could potentially impact your server, the environment, a site or the organization. I would argue that this is tremendously difficult and that it isn't the normal tendency for humans... that is, to be open minded, to assume that how you have randomly chosen to do something isn't necessarily better in some way than the way someone else randomly chooses to do the same thing. In a social or political sense we sometimes rail against this tendency to favor our own way of doing things or our own group. This is after all the root of racism, sexism almost any -ism. This is at the heart of our justification for ruining the planet in our own best short term interest without considering the larger impact. We consider ourselves superior because we have a higher capacity for complex thought; if a different species were writing these definitions, our strengths would be greatly devalued as we devalue the strengths of others. These things are our instinct for lack of a better term. We identify with our own group and objectify others because it is a fact that there will be conflict (whether we're talking world war or marketing vs. development or developer vs. user) and because we have a limited capacity for the type of minutia that allows for the subtle interactions that are the basis of our remarkable progress.

I'm going to stop in this direction now and pull this back around to being on point. I'm going to stab at a very quick summation of what Dave has said. This could be difficult to do I realize. I want apologize in advance if I get this even a little wrong. You are of course free to read the original articles ( article 1, article 2 ) and please feel free to correct me (or to ask me to correct myself).

I would summarize what Dave has said as follows:

Software engineers have as much right to get paid for what they do as anyone else doing anything else that has some value. More to the point, it is not a question of whether or not people should pay for the software they use, because it is necessary that they pay and so they will pay one way or another.

To quote from Dave's article "Who will pay, part 2"

"You pay one way or the other

There's been a bit of discussion about my last DaveNet piece, mostly users talking about what they're willing to pay, as if they have all the power. They don't."

The article continues to point out what should be obvious, that software development is time consuming and expensive and involves a lot of people all of whom need to make a living and so need to get paid for what they do. If all or any of these people aren't paid fairly for what they do for an extended period of time they will choose willingly or they will be forced to choose to do something else. If they choose to do something else then development ceases and everyone loses.

Who should pay? The article assumes users should pay because it is the users who directly benefit from the development... of course this is true, but not entirely realistic and on it's own is a very small view of a much larger dynamic.

The article talks about "The power of the software developer not to develop...". Of course in theory a single developer or all of the developers in the world could decide not to develop... in theory they could make that choice but I would argue that it's almost a purely theoretical choice. You could decide not to do what you do of course; janitors could decide not to clean, pilots not to fly, executives not to exec and developers not to develop software but a decision not to do something implies that you've decided to do something else and it's at this point that people decide that ultimately it's in their own best interest to just keep towing the line. As a software developer you're very invested in being a software developer. You are probably not qualified to do anything else. If you're a very good software developer with a lot of experience than you have a lot invested in what you do and are less likely to turn your back on it. This is one of the unwritten golden rules that makes complex society possible. The average software developer depends on someone else to produce, package and deliver their food; to provide clothing, transportation, to educate their children, provide the whole of the infrastructure that they depend on everyday for everything from clean water and electricity to entertainment and the foundation on which they build to develop software. Over the decades collectively we build a trust that as a whole we won't simply stop doing whatever it is that we do as long as everyone else keeps up their end of the bargain. And the arrangement has worked and so we have cities and the movie industry and people study astronomy, dig up dinosaur bones or write fiction or develop software; all things that would be pretty low on the priority list if we all had to be concerned with our own survival on a daily basis (if I had to grow my own food I would be busy doing that right now and not writing this response to some article by Dave Winer who would be busy repairing the thatch roof on his hut and wouldn't know anything about software development). Individually we turn our back on what we do but collectively we do not. I don't know why, I just work here. I won't lose any sleep thinking that software developers will stop developing any more than I will worry about the trees stopping in their production of Oxygen.

Next, the article points out that someone needs to be paid to do everything (this is an oversimplification I know)...

The article asks the question,
"Could you run a car in the Indy 500 with no money?"

Well, I trust that the situation would take care of itself. If any one person or group didn't have the money to run a a car in the Indy 500, someone else would. Or if everyone didn't then the Indy 500 would be an entirely different thing. It would cost less money to run a car in the Indy 500 and we'd be back in business or if that didn't happen then running a car in the Indy 500 might be decided to be an unjustifiable thing to do and then no one would do it and no one would care

The only reason it costs so much money to run a car in the Indy 500 is because there are enough people who have decided that they want to invest in it to drive up the competitive standard and so the price to compete. I'd run a car in the Indy 500 if I could use my Volkswagen Jetta "as is" and with my friends. No one would have to pay me a dime, in fact I'd chip in a couple of bucks to make it happen. It would be different but maybe it would still be called the Indy 500, who knows.
The article then starts in with some goofy math which can almost always be countered with other, equally goofy math so I don't know why anyone bothers with it.

Quote
"Let's say you spend 100 hours a year using a piece of software and assume your time is worth $50 per hour. So that's $5000 of your time flowing through the software. How much self-respect is there in paying nothing for software that leverages so much of your time?"

Here's where the discussion breaks down because it's simply unrealistic. If I spend 100 hours a year using a piece of software and my time is worth $50.00 I don't necessarily have $5000.00 of my time flowing through the software... well I do but that's not a complete picture. I'm also using an operating system that I pay for and other applications, the hardware (and not just a computer but all of the components I need to use in that same 100 hours) and electricity and I have to pay for the space I'm occupying during that time in one way or another and in 100 hours I had better eat and drink something, I need to backup my work, I need to communicate with other people to tell them what I'm spending 100 hours doing, I need to be carrying insurance etc etc etc. The list could be so long that it would be silly. All of these things share a piece of the $5000.00 of my time that is flowing through all of it and even $20.00 for any piece of software I can think of is a disproportionate amount. This is the problem. I don't pretend to have the solution but I want to do a better job of identifying the problem than Dave has done.

I want to introduce a couple of other points related to value here. There are several different definitions of value including these two

1. An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return.

2. Worth in usefulness or importance to the possessor; utility or merit...

I want to say that something can be very significant in a larger sense and still have little value because I would argue that value is dependent on the opportunity to extract meaningful worth. I'm thinking of something like potential value vs kinetic value. Something with potential value may have been heavily investedin or may have some innate worth but in practical terms that doesn't necessarily mean a whole lot.

I wouldn't pay $10.00 for a $5000.00 lump of gold if you were going to take my money and then immediately hide it from me so that I could never find it while acknowledging that it still belonged to me.

All of the money that was spent on wired data infrastructure won't be worth much if tomorrow wireless bandwidth is infinitely available, secure etc. Where did that value go? Ask everyone who lost money in the stock market in recent years if there is a difference between real and imagined value. Dave's goofy math is nothing more than a very limited outline of imagined value.

Also, it needs to be acknowledged that something may be more or less valuable to me based on nothing more than my ability to buy into it. In other words, a $50,000.00 car that you're willing to sell me for $200.00 is valueless to me if I only have $10.00 to my name.

At this point, I want to stop talking generically for a little bit. Software developers should understand that while users do derive value they add value too. If I discover a bug in your software while acting as a user of your software and report that information back to you saving you development dollars are you willing to start kicking back some money? Let's talk about the value of hundreds of hours in saved development costs.

Documentation is difficult and time consuming to do. The discussion boards that are so prevalent nowadays are just one example of documentation submitted by users that I assume is of significant value to every developer who runs one of them. Is anyone paying users back for this time and effort spent. Let's assume everyone who submits a question or a response to one of these discussions should make $50.00 an hour. Even if you could charge each of them $100.00 for the software you're currently offering for $20.00 and everyone using your software paid, you would owe more than you make after a very short amount of time. And without these types of resources that depend on user contributions, your software may be of limited value (if I can't use it, there is no value to me). With fewer and fewer developers including adequate documentation for their products users are integral so why isn't Dave concerned about compensating users who spend their time and efforts in support of the applications they've had to pay for up front.

There are more layers to this. I am a registered user of Radio UserLand. UserLand said the software was worth $39.95 and that's exactly what I paid them. I took the software and I developed new templates, added my own content and even completely new functionality through HTML and scripting that wasn't part of the original software. I've also recommended the software to friends, family and professional contacts who think favorably of the product largely due to my enhancements and endorsement. Beyond a doubt I am directly responsible for UserLand selling dozens of copies of the software that they would not have sold based solely on their efforts. I've spent my time developing and supporting the application to their advantage. If we want to talk about time = money and value then UserLand owes me some money at this point. If I'm expected to work for nothing why not them? The answer is because we're not working for nothing even if we're not paid entirely up front. I spend my time promoting the product not for UserLand's benefit but because I think it will benefit me in some way down the line. For the same reason, it is in every developer's best interest to get their software to as many people as possible. There may be benefits well beyond whatever the price tag on the box... oh I don't know, a fellowship a Harvard maybe or credibility that leads to opportunity or the advancement of the human condition. Maybe someone will take some shareware app and use it as part of a collection of technologies that will allow a collaboration that will ultimately result in a cure for a disease that will inflict a member of the the shareware developer's family or a close friend or the developer him/herself.

Let's consider Radio. The application is meaningless without the infrastructure to support it and even if the developer charged $100,000.00 a copy UserLand couldn't afford and wouldn't know how to build and maintain the infrastructure themselves. Who is getting the kick back then? The Internet is the result of tax payer contributions to a government funded research project and then private investments, none of it would have happened without UNIX and it wouldn't be as vital if not for the other platforms, there are protocols involved that UserLand had nothing to do with, and an infinite number of other dependancies (and of course let's not forget the users who do nothing but contribute all of the content). compensated for their own time and effort spent making Radio possible. If so, you should just start giving it away.

As a final point related to value. Dave wants to talk about this in terms of value derived, not actual worth, and this is greedy and wrong-minded and I think ultimately has to change or we are going to have big problems (I mean bigger problems). So software development costs money. I agree with that, and let's say so does everyone else. How much does it cost? Does it cost 1 billion dollars to develop an average application? Dave talks about a 'professional software organization for a well-supported product' that has as many as 30 - 40 people. How much does it cost this organization to develop an app? Does it cost 1 million dollars? Let's say it's 1 million dollars, if that's low I apologize you can pick any number you like. So if it costs 1 million dollars and you want to sell the app for $40.00 you'd need to sell 25,000 copies to break even. So let's say you sell 50,000 copies and you double your initial investment. Now lets say you sell 100,000 copies and you quadruple your investment is that enough? Is it too much? We can easily define what is too little but what about too much. People have only a limited amount of money to divide between all of the software they would like to purchase. It would seem to me that if we're talking about being fair then you as a developer have an obligation to not make more money than is necessary off of any one application because you're tapping each person for more money than you need and so eating into the other guys ability to get paid for what they do. Are you going to start kicking some money back if you take too much in? Maybe you'll start giving the software away... that doesn't seem fair to the people who paid for it in the first place.

In my opinion we can't start talking about economics that make any sense at all until we're all content to just make a living. The all-star attitude (rock star, star athlete, rich software developer) is killing us all. We're ruining our own economy the way we ruin an ecosystem by taking more than we need or growing our needs in an uncontrolled way. Hey, I'm willing to believe in a free market economy even if it means that star athletes get paid tens of millions of dollars for doing something that has no real value as long as Dave Winer is willing to stop lecturing me on paying for software. I have easily spent more on software than I have on food any given year of my adult life and I basically have no clothes and all of my furniture is garbage and I never take vacations and I've sold my car and I pay for software, and if software cost less then I wouldn't have to make these types of sacrifices so that Dave Winer could be a rich software developer. Dave, I love your products but maybe you should just shut up and let someone else take up this cause or leave it to the economists or philosophers and stick to doing what you do best.

Next, Dave spends a paragraph talking about other things that people spend money on. These things cost money he argues and so does software. Of course software costs money but what you can charge is as much about what people can pay as it is about what you can charge. I'll use Dave's own examples, they make my point quite nicely but I would have chosen different examples if I were trying to make his point.

Dave: "I pay $1 to ride the subway downtown."
Me: Transportation is a necessity, consumer software is not for most people. Also, as a necessity that subway ride is subsidized. It costs more than $1 for you to ride the subway from one station to the next. Using your least common denominator math we'll all be walking a month from now because the subways will all be out of business. That's not true of course because the city doesn't make all of the money it needs to run the subway from the subway. The subway is part of a system. The city makes the money to run the subway by taxing business for operating in the city and the subway is supported because it's necessary for people to get to and from work so that businesses can operate in the city.

Dave: "It costs $300 to fly to NNY and back (two hours in the air)."
Me: Do you wish that software developers were doing as well as the airline industry? The airline industry is in sh*t shape for precisely the reason software developers don't always get paid what they think they should get paid... it's not that flying shouldn't cost $300 but if I can't pay it then I don't fly and the airline industry has to assume the burden of coming up with a price structure that makes more sense to the widest audience possible or go away. Maybe software developers should cry to the government for a bail out the way the airline industry has.

Dave: "A cab ride to the airport -- $40."
Me: Those of us who aren't rich software developers take the bus. Can I pay less for your software please so that I can take a cab to the airport?

Dave: "My monthly rent is in the thousands."
Me: Mine isn't. Speaking of housing... we have a housing crisis in Boston. People can't afford to live but these same people need to use computers to eke out the living they can't afford and to do their computer related jobs they need applications. Not just one application but dozens or more applications and they need to pay rent. What was your point again Dave, that software developers will go away if they can't screw users out of money that users might gladly pay if they could afford to?

Dave: "Medical insurance about $10,000 per year."
Me: Some people don't have insurance because they can't pay for it. Maybe they spend too much on software that they need to make money to eat which is a more immediate need than insurance. Even software that might not seem necessary to make a living might be necessary to stay competitive to make a living.

I need to make just a couple of final points to keep my head from exploding. I'll make it quick...

1. There are a lot of people in the world who don't get paid at all or don't get paid adequately for what they do. There are starving artists, starving actors, social service workers, firefighters/even volunteer firefighters, anyone making music who isn't making popular music (blues, jazz, classical and a hundred other classifications), independent filmmakers (some of who drive themselves to personal ruin), NCAA athelets or Olympic atheletes. I could go on and on. I don't know why these people keep doing what they do, but they do and maybe that's the point. Or maybe the point is that there are other ways to make money than just packaging a product and sticking a pricetag on it.

2. Dave is talking about a small software development company with 30 - 40 employess and the business he mentions is Microsoft. I don't see the connection. It's because they both make software? That's not a connection it's a coincidence. I may sell cookies out of my small kitchen at home, that doesn't mean that I should compare my business to Kraft Foods (they make cookies too).

If you run a business that has 30 - 40 employees or fewer you're not a software developer, you're a small business owner. You're no different than all of the owners of the small restaurants that dot Boston and every other city and town in the country or any other small business owner. Your software is your product. If all you want to do is make software than make great software and give it away. If you want to sell your software you have a lot more work do to. Your software is your product, it's not your business. If you want to make money selling a product you need sell. You need to market. You need a business model and you may need to get creative about it.

There's a tiny Italian restaurant in Boston's North End called Alloro. They have a only a few tables and I've never seen the place full. At any given time they always seem to have more more staff than customers. In addition to paying the staff they have to pay their lease, utlities, for the food itself, to clean the restaurant and all of the other services necessary to run a small restaurant. I have no idea how they do it but they've been in business for years. Maybe some enterprising software developer should go ask them how they do it.

Running a small business is a tough, tough way to make a living. It's very long hours and a lot of hard work and still for most small business owners there are sleepless nights trying to figure out a way to keep it going for another week or another month. Why do they do it? I don't know. I do know one thing, I've been to Alloro's many times and they've never tried to bully me into getting a dessert because they need the money or they'll go out of business and then I won't be able to go there and I'll have no one but myself to blaime. They may have a right to complain but they don't because it's not good business.

There are a lot of cooks who would like to make food for a living but fewer who want to sell food for a living. There are a lot of software developers who want to make software for a living but not sell software for a living. Maybe they should get a partner or work for someone else or suck it up and make it work like every other small business owner trying to make it work.

Back to software development to finish this up...

Here is the basic riddle in my mind. If you can answer this one then you're smarter than I am. When it comes to software, everyone should pay for everything... fine, but what do you do when you can't pay for everything and none it is has any value without all of it.
If you've read this whole thing send me an email to let me know what you think. Thanks

robreed

- - "Ah, to be young again... and also a robot"
- - Professor Hubert Farnsworth
- - Futurama
- - Season 1, Episode 2: "The Series Has Landed"

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