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Pricing bespoke adaptation of existing product

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    #21
    If they have given you designs the first thing you need to do is ensure that they have no IP claim over the changes you make to your product under their guidance before you even discuss money. if they want an IP claim or a distribution/licence deal than that is an opening for a chat about revenue sharing.

    OP are they proposing to distribute the product to their customers as some sort of white label agreement or will they direct their customers to you to download the product and it will retain your branding?

    If you got the file formats without their help would you still have added them to your product? If not why not, would you have done something else instead (opportunity cost).

    If you make the changes would future revenue cover the cost of the changes and make you a nice profit?

    Would the hardware provider be willing to promote the new changes to their customer base and direct those customers to your software?



    Make Mercia Great Again!

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      #22
      Originally posted by BlueSharp View Post
      If they have given you designs the first thing you need to do is ensure that they have no IP claim over the changes you make to your product under their guidance before you even discuss money. if they want an IP claim or a distribution/licence deal than that is an opening for a chat about revenue sharing.

      OP are they proposing to distribute the product to their customers as some sort of white label agreement or will they direct their customers to you to download the product and it will retain your branding?

      If you got the file formats without their help would you still have added them to your product? If not why not, would you have done something else instead (opportunity cost).

      If you make the changes would future revenue cover the cost of the changes and make you a nice profit?

      Would the hardware provider be willing to promote the new changes to their customer base and direct those customers to your software?


      All good questions!

      On the first point concerning IP, thanks for raising this and I will keep it in mind as things proceed.

      As for whether this ends up being white labelled by them, or simply sold by me under my own branding, or indeed somewhere in between (my product, sold by them?), this is really the biggest outstanding question. I have emailed asking for some broad terms of reference, and what they are hoping for in this project, so hopefully I will have some more clarity on that soon.

      If I had somehow got the file formats I might well have added them myself, yes. I might even have tried to reverse engineer them myself eventually, but having now studied them I am glad I didn't go down that route (they are awkward, to say the least). Before this came up, my plan was to continue adding functionality to my existing product and release a paid upgrade. That still is the plan, unless this company make me an offer I can't refuse.

      Would changes to the one product they want me to adapt make me enough if I went it alone? I doubt it, actually. If they helped promote it, then quite possibly.

      I think the nub of it is that if they want me to adapt, and sell under my own steam, them I carry the risk (3-4 months work, when all said and done, plus delaying my other work), and maybe, maybe don't make a reasonable return - the former more likely if they commit to help market it. If they commission the changes (and pay for them) then the risk is theirs, but I'm beholden to them and it also introduces a whole world of contractual obligations, lawyers involved, meetings etc that generally aren't my cup of tea.

      Let's see what they come back with after my latest missive, hopefully things will be much clearer then.

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        #23
        Another option is to continue to do the work you planned to do and get someone in to do the changes and get them to pay for it.

        Make Mercia Great Again!

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          #24
          I've seen good money made with this business model:

          Software product X is given away for free (usually worth ££) with consumer product Y.
          Creators of product X, get a few £ (or less) per product sold.

          Obviously depends on the numbers / volumes. Might be worth testing the water with an offer like that instead of getting them to commission the work.

          If they commission the changes (and pay for them) then the risk is theirs, but I'm beholden to them and it also introduces a whole world of contractual obligations, lawyers involved, meetings etc that generally aren't my cup of tea.
          It's usually a lot easier than that. You just produce a quote for the work e.g. £40k 'supporting file format xyz in application.' note to say all IP will remain yours. They can then raise a Purchase Order (PO) you do the work and invoice for it. If you want to be totally safe, ask for 40% up front payment.

          If they're a big player, even small software projects internally can cost half million, so don't be afraid to charge a good amount. It's a B2B relationship not a client->contractor relationship.

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