Sell Me Your Product
January 4th, 2007Today Garrett Murray let loose a rather provocative post, wherein he details the unfortunate series of events that unfolded after selling his company’s product and web site to Brian Ball of MacZOT.
Long story short: Brian agreed to pay roughly $5000 for the product, in installments. But a contractual loophole of Garrett’s own devising inadvertently allowed Brian to simply stop paying, and allow ownership to revert back to Garrett. Brian essentially claims that Garrett got more money out of the deal than he could have otherwise, and Garrett essentially claims that Brian was kind of a prick about the whole deal.
You be the judge. Also be sure to check out the extensive debate on the (now buried, it seems) digg entry. Here both Brian and Garrett have a chance to let their feelings be known in the public debate. My summary? Liberals will agree with Garrett and conservatives will agree with Brian. (“Have a heart” vs. “Tough shit, kid.”)
But what really interests me…
I find the drama of this story a bit engaging. It’s always at least a little bit interesting to watch a car crash, even if you can sort of tell that people are getting hurt. But what I can’t believe is that a relatively mature product like this sells for only $5000. And Garrett was including 50 hours of consulting with the deal. By my reckoning that means he was essentially selling 50 hours of work and throwing in the business for free.
But this got me thinking. Will anybody sell me their product for $5000? I am a good buyer. Make me an offer, and if I like what you’ve got, I’ll pay cold hard cash for it. No installment crap. If you won’t sell for $5000, how much will it take? Send me a private email detailing the terms of your offer (not legally binding), and I will let you know if I’m interested. I promise not to divulge any specific details to the public about your offer. I just want to know what my options are. If you’re a desperate shareware developers looking to get away from a particular product, maybe we can help each other out.
After a week or so, I’ll post a followup consisting only of statistical information such as average offering price, number of total offers, etc. And I’ll let you know if I ended up with any new products in the pipe.
Let’s make a deal!
Update January 5: I’m sure you’re probably curious whether this is garnering any results. So here’s a little update: as of this writing I’ve received at least 15 legitimate, reasonable offers comprising mostly Mac software titles, but also a web site, and a Palm-platform product. There have also been, needless to say, a few good jokes.
The viability of the serious offers, in my estimation, sort of run the gamut. But there’s definitely some interesting stuff in there. The range so far is from $2,000 to $20,000, with some quite interesting stuff in the lower end. I have to confess that if I make an acquisition I will probably be bargain-hunting. Some of the pricier offers would still be a great deal to a more monied investor, but are probably too rich for my blood right now.
Update: The product I acquired is MacXword from Advenio, LLC. The product was rebranded and released on March 21 as Black Ink! For more information about the process I went through and the offers I received, see my Acquisition Roundup post.
January 4th, 2007 at 6:36 pm
Couldn’t resist:
“Deal, or no deal?”
January 4th, 2007 at 8:04 pm
Maybe you should holler at the people that are trying to sell DropSend?
January 4th, 2007 at 9:13 pm
That’s a great angle, Daniel, and I agree that the first thing I thought was that $5000 wasn’t a lot of money.
January 4th, 2007 at 9:19 pm
How divided are we that political differences determine how warm hearted someone is.
January 4th, 2007 at 9:20 pm
Wups, misread that. Ignore what i just said.
January 4th, 2007 at 10:15 pm
Daniel,
this is all quite interesting to me, and strikes a chord:
Last year, I took the plunge and decided to quit my job and commit to trying to finally build an app that i have had in the back of my head for years. Nothing special – just a programmers text editor – only done a little different than everyone else.
You can see a screenshot here if you like:
http://www.objective-d.com/?p=8
As I got more into the development, it became obvious that there was a lot more work involved than I had expected – so of course things took longer than expected. The savings slowly ran out…
Then Textmate came along and started doing really well – which gradually disheartened me more and more.
Many people who tried my editor thought it was great, and thought I should finish it and release it – but because of Textmate it was very obvious I had missed the boat with regards to mega-sales, or being able to earn enough to make a living from it (my savings having long ago ran out).
So now I find myself back in full-time employ again (have to make those mortgage payments somehow!), in a much better place financially with a 80-90% completed app (that incidentally I use every day and still love) and wondering what to do.
I still dream of a life as an independent Cocoa dev, but realistically unless I come up with the next big thing, it’s not gonna happen with my current app..
Should I finish it an sell it? If so will it sell? What about making it open-source or freeware – very admirable, but what about the year I invested in it, spending my own money – how do I recoup those costs?
$5000 although a trivial amount of money compared to the blood, sweat and tears I have poured into my app, is still better than nothing…
I think I understand (at least partially) where Garrett is coming from…
D.
January 5th, 2007 at 3:04 am
Are you only looking for software products?
Else, http://www.RateMyMovie.co.uk/
January 5th, 2007 at 10:50 am
Here’s a full blooded conservative that sides with Garrett on this one… :-)
January 5th, 2007 at 11:00 am
And here’s another conservative that sides with Garrett. I’m curious what led you to conclude a liberal/conservative bias towards one side or the other.
January 5th, 2007 at 11:02 am
JP & Bubba: before this gets out of hand :) I just used the cliche conservative/liberal stereotypes as a sort of light humor, really. I know the issue is more complex than that. Conservatives have hearts and liberals can be cold and dismissive. I was just searching for a capsule stereotype summary.
January 5th, 2007 at 11:03 am
I’m a conservative. A religious one, at that, although I’m not a member of the “religious right” and can’t support much of what they do.
I side with Garrett, and I know a number of other conservatives who do. In fact, anyone who looks at the ethics of the issue and not just the legality will most likely side with Garrett, which would include most of the people I know who would consider themselves part of the “religious right.”
I’m not sure where you got your liberal vs. conservative comparison on this one. Maybe you’re just talking economics, but I’m an economic conservative, and still…nope.
January 5th, 2007 at 11:04 am
Evidently you started posting before I finished my post. Carry on.
January 5th, 2007 at 11:52 am
Isn’t it possible to have, regardless of political bent, both reactions? I think a lot of people understand that it is possible to be simultaneously completely legal and horribly dishonorable (see every lawyer and politician joke in existance).
January 5th, 2007 at 11:59 am
Why bring politics into this? From the comments I’ve seen 95% of the people agree with Garrett. And you’re the first to drag it down into the political muck. Good on ya for jumping into the comments, but why even stereotype in the first place? Remember you’re supposed to be the compassionate caring side of the aisle! ;)
Sorry, I just HATE politics intruding into so many non-political aspects of life these days! Gruber (whose link I followed to get here) is really bad about cramming that nonsense down our throats along with the great content he has.
January 5th, 2007 at 12:06 pm
I don’t think liberal vs. conservative applies here. I think it is deception vs. honesty. Two people entered into a contract, but only one of them followed the spirit of the contract.
January 5th, 2007 at 12:11 pm
OK I think everybody has had a chance to make their point: “It’s not a conservative vs. liberal issue.” Let’s take James’s advice and stop with the politics, now. I’m not going to edit the original article, but I think this comment record makes it very clear how we all feel about it.
I will delete any further comments exploring the “conservative vs. liberal” question.
January 5th, 2007 at 12:32 pm
I’m a libertarian, so by nature I side against both of them :)
From legal and moral perspectives, there’s nothing wrong with Ball defaulting on a contract, as long as he followed the procedures they agreed to. Garrett can’t even claim that he didn’t read the fine print, because he *wrote* the fine print. I’m sure he’s learned his lesson, and will insist on ironclad contracts for the rest of his life.
From a reputation and PR perspective, however, this was a really idiotic move by Ball. His entire business centers around getting Mac shareware developers to sell him rights to their software, so he can sell them at a discount. I’d guess that not too many Mac shareware developers want to have anything to do with him now. Way to go.
January 5th, 2007 at 1:06 pm
I’m sure it wasn’t lost on anyone reading this, but let’s put the disparity here in proper relief…
Daniel Jalkut:
“But what I can”™t believe is that a relatively mature product like this sells for only $5000.”
Brian Ball:
“The fact that you already made $1,300 or so on the deal doesn’t make me feel too bad considering I think you way over-valued it on the front end, and is more than you would have made through sales.”
Speaks volumes about these two different perspectives, doesn’t it?
January 5th, 2007 at 2:13 pm
I think it really comes down to the very simple fact that Brian Ball managed to wiggle out of the deal by using the “upon default” clause that Garrett placed in the contract. Remember, that clause was for Garrett’s benefit in case Ball didn’t follow through. I’m not sure about anyone else, but defaulting on a contract isn’t a good thing, and purposely doing so to break a contract written in good faith is most definitely a move devoid of ethics.
Ball’s attitude, specifically his massaging of the circumstances to make himself feel better about it all, in response to the ordeal is proof enough of the type of person he is.
January 5th, 2007 at 4:31 pm
What amuses the hostilemonkey most is the fact that Brian Ball’s business model essentially revolves around marketing and PR. I know the cobbler’s kids are always the worst shod, but jebus – can you spell I.N.C.O.M.P.E.T.E.N.T?
January 5th, 2007 at 4:32 pm
What, don’t like hearing people’s offended reactions to your ridiculous comment?
I don’t like your attitude at all – first time visitor, and I won’t be back. And btw, I’m as liberal as they get.
January 5th, 2007 at 4:35 pm
eth0: Thanks for stopping by.
January 5th, 2007 at 6:21 pm
Daniel, thanks for your offer. I could sell you two of my mature, relatively bug free and popular products for, say $2500, each.
One of the products is called HelloWorld.app and it is guaranteed to make the user both feel good and anthromorphisize the computer.
The second product is called CurrencyConverter.app and it includes an elegant interface and helps the user to manage his or her finances when abroad.
Just contact me and we’ve got a deal ;)
January 5th, 2007 at 11:46 pm
I’m surprised Garrett immediately made it freeware. I guess he was fed up… Another option would have been to shop around for other developers who would like a mature products with users and see if they’d split royalties with him… That way he’d know it was being maintained, he’d get some money and it would not require a large upfront investment… I would have been interested in that sort of deal.
January 6th, 2007 at 2:19 am
To look at it from Ball’s side for a moment, the software is worth whatever income potential it has for him, no more, no less. It’s irrelevant how much time it took, or how great it is, or how talented the programmer is. Products and businesses are usually valued at the net present value of the cash flow for the near term future, or if you don’t have a financial calculator handy, a multiple of the projected monthly income.
I think a $5,000 price would be justified if Ball could get maybe $300 in income per month out of it, assuming no future expenses or significant support costs. Apparently Ball, who probably knows his business, decided the incremental extra sales he could get from his plan to bundle were insufficient.
He probably avoided Garrett while he was in the process of reaching this conclusion because it was, well, unconfortable, and he wanted to decide for sure before breaking the news. Maybe he could have handled it better.
A couple points for Garrett; (1) a contract is a contract, my friend; if it backfired on you, that’s life, but it works both ways; and (2) publicly airing this matter is really bad karma; I would think twice, and three times, and ten times before blogging something like this; you should have sucked it up and gone on; everybody you ever try to do business with in the future will have it in the back of his mind that things could go south for whatever reason and they’d be tarred in public and forever Googleable.
January 6th, 2007 at 7:52 am
Mark, I disagree with you regarding a few points.
Although a contract is of course, legally binding, and both sides are to strictly adhere to it, in this scenario, I think it is a case of Ball following the letter of the contract, rather than the spirit of the contract.
I also believe Mr. Ball has more to lose than Garrett by his public airing of his deals with him. Ball would forever be known as the guy that signs contracts with full intentions of breaking them. Or perhaps he’ll be known as the person who after finding that a particular deal is going sour, instead of sucking it up as bad judgement, he’ll pour over the contract, scrutinizing every line looking for a technicality to back out of the deal.
I have no idea how he’ll attract the business of small, independent developers in the future with this out in the public. Most small independent developers simply do not have the neccessary resources to hire a lawyer to go through every single small detail in a contract and rely on good, honest people to deal with.
He’ll probably have more luck dealing with big corporations, and in this case, the big corp will probably hire an extremely good lawyer specializing in contract law, and if they wish, they might even want to play the game back at him and exploit a technicality to weasel out of a deal. All’s fair right?
As for Mr. Garrett, he’ll be known as a bad contract writer, or a person who doesn’t know how to work with contracts or lawyers – big deal.
Should Garret have kept his business dealings with Ball out of the public eye?
I find that having businesses held accountable for their actions in public is a Good Thing, and not a bad thing IMHO. The kind of companies that are afraid of dealing with people like Garrett are exactly the kind of companies that Garret’s trying not to deal with anyway, so its not a loss for him. Honest companies with fotrthcoming negotiators should have no qualms about dealing with Garrett, afterall, what are you afraid of?
There’s a Chinese saying that seems to be particular appropriate here, my rough translation – “If you don’t do any deeds that you may regret in the day, you won’t be afraid of strangers knocking at your door at night”.
January 6th, 2007 at 9:29 am
Jeez, Mark. $5k is justified by $300/month or $3600/year, assuming no additional costs or expenditures, ergo $3600/year of pure profit? I hope you don’t buy any stocks that trade at a higher price/earnings ratio than 1.38, since that’s what that comes out to.
January 6th, 2007 at 10:10 am
The facts are that Ball got out of his contract by defaulting on it. Instead of affecting his credit score, Mr. Garrett dropped a couple of points off of Mr. Ball’s Moral Score. Moral Score counts for a lot more in an environment like this.
After all of this, which developer that reads this blog will ever go into a contract that has a monthly payment plan with MacZOT?
January 6th, 2007 at 7:56 pm
I totally agree with Sengan, and that was my reaction also. It seems that all Garrett has done is pile a new bad decision on top of a bad experience.
(And yes, I would have been interested in a deal like Sengan describes, too.)
January 7th, 2007 at 6:43 pm
Regarding “loophole” and “defaulting” and the like: the section in the contract about how the end the relationship is one of the most important parts. I’ve drafted a lot of contracts (but I’m not a lawyer!) and had one bad experience where this section was not clear; now I really pay a lot of attention to it.
But it certainly didn’t sound like the contract was ambiguous in this particular case. I think “loophole” is an overstatement, and it wasn’t a “default” if he stopped payment under the terms of the contract.
January 7th, 2007 at 8:57 pm
I guess its a case of being once bitten, twice shy for both of you actually.
The contract that Garret drafted will not seem ambiguous in this case to you because you’ve already been bitten before, but since you had one bad experience before with contracts, place yourself in his shoes for awhile and think back to what you were thinking before you had your own bad experience.