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Pricing bespoke adaptation of existing product

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  • courtg9000
    replied
    Originally posted by tomtomagain View Post
    If you own the product, then, whatever happens, make sure you continue to own the product and all it's related IP after the enhancement has been completed.

    I have been in this situation numerous times with my own product, when a large corp. asks me to make a bespoke enhancement I always make it crystal clear that my company continues to be the sole owner of the product and all its related IP. Large Corp. Inc often tries to grab what is not theirs.

    The second thing is - only make an enhancement that is actually beneficial to the product. Short-term cramming in functionality for a few K gives you plenty of headaches down the road.

    Finally. Whatever sum of money you were thinking of ... it's not enough. Work out roughly how many days it would take THEM to do it. Then multiply that by £1000. That's how much it will cost them to do it.
    I agree with your first line but as for your last line I would caution that the OP might price himself out of the market that way!

    Leave a comment:


  • tomtomagain
    replied
    If you own the product, then, whatever happens, make sure you continue to own the product and all it's related IP after the enhancement has been completed.

    I have been in this situation numerous times with my own product, when a large corp. asks me to make a bespoke enhancement I always make it crystal clear that my company continues to be the sole owner of the product and all its related IP. Large Corp. Inc often tries to grab what is not theirs.

    The second thing is - only make an enhancement that is actually beneficial to the product. Short-term cramming in functionality for a few K gives you plenty of headaches down the road.

    Finally. Whatever sum of money you were thinking of ... it's not enough. Work out roughly how many days it would take THEM to do it. Then multiply that by £1000. That's how much it will cost them to do it.

    Leave a comment:


  • courtg9000
    replied
    Originally posted by mattster View Post
    Court, one more question for you if I may. When do I start pushing for some sort of explicit terms of reference here? Do we just carry on this vague back and forth, talking about the product and what the work involves, do I push it at the next opportunity, or just wait for them to say something? I have a memory of the main guy saying that he would include a terms of reference document in the files he sent over after the last meeting, but nothing was included. Now I'm doubting my own memory of the meeting!!
    Push for a ToR/Sow. Start gently and then up the ante until it becomes a case of norther work can be done. You can't really price up without this remember and you should gently refuse to do so until you have it.

    As for one more question, please ask as many as you like!

    Leave a comment:


  • courtg9000
    replied
    Originally posted by mattster View Post
    Thanks for the replies. Lance, you are no doubt right - if this becomes a fully bespoke delivery to them, then the amount of corporate BS will likely overload the development time. My preference is still for some middle way, where I adapt the software (minimally) so that it works with their hardware, perhaps exclusively, and they handle the marketing side. With them behind it, and their reach to their userbase, sales would be at least one, perhaps two orders of magnitude more than what I could achieve - especially since I don't currently support their hardware, and so have little reach to their users.

    Courtg, "why me?" There is nothing else out there that does this commercially right now, and probably for good reason - there isn't much money in it. OK, enough to keep me ticking over as a one man band, but not enough to interest any real business. As for sales, I don't think they are doing it for the revenue. This is probably an annoyance to them, as much as anything else, in that some users will pester for this functionality, and they don't have anything to offer them. They used to have their own product, but that is now legacy and more or less unusable with newer hardware - hence discontinued. We are not talking about a very complicated application, but after implementing the required functionality, making a usable and robust UI, documenting etc then yes, a couple of man years of labour, no doubt (much) more when done within a corporate structure. So it would cost them several hundred grand (and the rest) to make their own, but I don't think it is worth that much to them, so they haven't. This makes the concept of what this product is "worth" to them rather nebulous. Having said that, they have come to me, we have had two meetings (fairly senior guys at their end), and they have obviously put a fair bit of work in between meetings, so they are keen.
    Ok, next step. Get the calculator. Tot up the time you need to make the changes to their standards. Talk to them again about expectations on deliverables (not just code, documentation, changes, etc) to help your calculations. Then taking that calculation as your baseline. Add 20%. Multiply by normal contract hourly rate plus 20%. This is what you need in £ to deliver the job.

    Based on your two posts I would go down the hybrid route. Make sure the SoW is tighter than the tightest thing. So a fee for development plus a revenue split on sales. This should bring in some close to upfront bunce + cost cover and recurring income to support the family and yourself going forward. Structure it as % advance and then % on delivery + recurring fees quarterly basis. Make sure the contract cannot sniff of IR35.

    Can you support all these possible new users in terms of tech support, customer support etc?

    Leave a comment:


  • mattster
    replied
    Court, one more question for you if I may. When do I start pushing for some sort of explicit terms of reference here? Do we just carry on this vague back and forth, talking about the product and what the work involves, do I push it at the next opportunity, or just wait for them to say something? I have a memory of the main guy saying that he would include a terms of reference document in the files he sent over after the last meeting, but nothing was included. Now I'm doubting my own memory of the meeting!!

    Leave a comment:


  • mattster
    replied
    Thanks for the replies. Lance, you are no doubt right - if this becomes a fully bespoke delivery to them, then the amount of corporate BS will likely overload the development time. My preference is still for some middle way, where I adapt the software (minimally) so that it works with their hardware, perhaps exclusively, and they handle the marketing side. With them behind it, and their reach to their userbase, sales would be at least one, perhaps two orders of magnitude more than what I could achieve - especially since I don't currently support their hardware, and so have little reach to their users.

    Courtg, "why me?" There is nothing else out there that does this commercially right now, and probably for good reason - there isn't much money in it. OK, enough to keep me ticking over as a one man band, but not enough to interest any real business. As for sales, I don't think they are doing it for the revenue. This is probably an annoyance to them, as much as anything else, in that some users will pester for this functionality, and they don't have anything to offer them. They used to have their own product, but that is now legacy and more or less unusable with newer hardware - hence discontinued. We are not talking about a very complicated application, but after implementing the required functionality, making a usable and robust UI, documenting etc then yes, a couple of man years of labour, no doubt (much) more when done within a corporate structure. So it would cost them several hundred grand (and the rest) to make their own, but I don't think it is worth that much to them, so they haven't. This makes the concept of what this product is "worth" to them rather nebulous. Having said that, they have come to me, we have had two meetings (fairly senior guys at their end), and they have obviously put a fair bit of work in between meetings, so they are keen.

    Leave a comment:


  • courtg9000
    replied
    Originally posted by Lance View Post

    The quick answer is is to get a salesman to do it.

    Or talk to them. Find out their budget. Draw air in through your teeth, tell them it will take time to do an impact assessment.
    Get a T&M SoW with them to do the assessment and discovery.

    Let's be very clear. If they are that big it's never going to be a small job. What about governance, security assessments, BCDR, pen tests, support, handover, UAT, OAT, test plans, etc. etc. etc ?
    There's got to be 3 months work before you actually deliver a single byte of code.
    Get a salesman to do it - Almost impossible, the guys who can do this stuff are very thin on the ground and often well booked out. I could do it if I wasn't retired and had space but it would cost, a lot.
    As for the t&M SoW. Highly unlikely he will or a salesman on his behalf will get them to spring for this.
    You are right in your last point.

    Leave a comment:


  • Lance
    replied
    Originally posted by mattster View Post

    I've got a product on the market that took years to write. A multi-billion$ corporation wants me to adapt it to work with their hardware. It wouldn't take me long. How should I price it?
    The quick answer is is to get a salesman to do it.

    Or talk to them. Find out their budget. Draw air in through your teeth, tell them it will take time to do an impact assessment.
    Get a T&M SoW with them to do the assessment and discovery.

    Let's be very clear. If they are that big it's never going to be a small job. What about governance, security assessments, BCDR, pen tests, support, handover, UAT, OAT, test plans, etc. etc. etc ?
    There's got to be 3 months work before you actually deliver a single byte of code.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by courtg9000 View Post

    now, now let him get the advice he needs. The devil is in the detail on stuff like this
    Text is too small. Too Long, Couldn't Read.

    Leave a comment:


  • courtg9000
    replied
    Originally posted by ladymuck View Post
    What's the TL;DR?
    now, now let him get the advice he needs. The devil is in the detail on stuff like this

    Leave a comment:

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