{"id":8296,"date":"2010-03-17T10:23:44","date_gmt":"2010-03-17T14:23:44","guid":{"rendered":"http:\/\/ok-cleek.com\/blogs\/?p=8296"},"modified":"2010-03-17T10:23:44","modified_gmt":"2010-03-17T14:23:44","slug":"the-corrosive-effect-of-free-beer-on-the-drivetrain-of-small-businesses","status":"publish","type":"post","link":"https:\/\/ok-cleek.com\/blogs\/?p=8296","title":{"rendered":"The Corrosive Effect Of Free Beer On The Drivetrain Of Small Businesses"},"content":{"rendered":"

Imagine you are a designer of high-performance automobile engines. You design engines and then sell the designs to automobile manufacturers. You have customers of all sizes: from lone hobbyists and weekend racers to major car companies. You give them the engine design, they give you some cash and that's that - flat fee, regardless of how many engines they actually build and use. As long as they aren't re-selling or giving away your design, and aren't just building and selling completed engines based on your design, everything is cool. In other words, you aren't selling to people who would then use your designs to compete directly with you - you only sell to people who use your engine designs as part of something bigger.<\/p>\n

<\/center><\/p>\n

Some of your customers are in the drivetrain business. They design a transmission, drive shaft, axles, wheels and a suspension system to use a modified version of your engine, and then they sell that design to car makers. The car makers build the drivetrain, attach a frame, an interior, headlights, etc.. These drivetrain designers pay you for every unit they sell, and most of your income comes from these companies.<\/p>\n

Musical interlude: Gillian Welch, \"Everything Is Free\":<\/p>\n\n\n
\n<\/param><\/param><\/param><\/embed><\/object>\n<\/td>\n\nEverything is free now,
\nThat's what they say.
\nEverything I ever done,
\nGotta give it away.
\nSomeone hit the big score.
\nThey figured it out,
\nThat we're gonna do it anyway,
\nEven if doesn't pay.<\/p>\n

I can get a tip jar,
\nGas up the car,
\nAnd try to make a little change
\nDown at the bar.<\/p>\n

Or I can get a straight job,
\nI've done it before.
\nI never minded working hard,
\nIt's who I'm working for.\n<\/td>\n<\/tr>\n<\/table>\n

What a great song! She's a treasure. Now, back to the story.<\/p>\n

Imagine one of your drivetrain customers is faced with growing competition from a set of popular free drivetrain designs. As in: you can go to the web and download Bob's Free DriveTrain Design, stuff it into your manufacturing system and out comes a drivetrain (there are also plenty of free engine designs, which have steadily eroded your own share of the engine design market). In response to this, your drivetrain customer is thinking about giving away some of his low-end designs, for free, in hopes of getting some visibility among people who would normally not even think of paying<\/i> for a drivetrain design, given the abundance of free options. The plan is to give away some low-end designs, and hope they are so pleased with the free stuff that they'll eventually want to upgrade to one of the company's higher-end, non-free, designs. You get no money when someone downloads a free design, but would get your standard payment for an 'upgrade'.<\/p>\n

The problem for you: if they were to give away their drivetrain design, they'd also be giving away your engine design (because it's an integral part of their drivetrain design). And that is forbidden by your licensing contract. So, they've offered to buy your entire engine design business, giving them complete ownership of your designs, for roughly two years of what they're currently paying you in royalties. But you declined, because you enjoy designing engines. <\/p>\n

The next option seems to be: allow them to give away your design (to whoever wants it, unlimited, \"free as in beer\"<\/a>), in exchange for an up-front fee. In effect, you would sell them the right to distribute your designs for free. <\/p>\n

What's a reasonable fee ?<\/p>\n

Are there any other options ?<\/p>\n","protected":false},"excerpt":{"rendered":"

Imagine you are a designer of high-performance automobile engines. You design engines and then sell the designs to automobile manufacturers. You have customers of all sizes: from lone hobbyists and weekend racers to major car companies. You give them the engine design, they give you some cash and that's that - flat fee, regardless of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8296","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts\/8296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8296"}],"version-history":[{"count":0,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts\/8296\/revisions"}],"wp:attachment":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}