First let me set the stage
So let's imagine that someone wanted to create an iPad app that was like a magazine. You know, the kind that is all glossy and looks good. Suppose further that they wanted it to be topic-driven, so that all the articles were about a single topic (or even sub-topic) – you know, like WordPress (or WordPress plugins).
Now, they're not only selling the iPad app, they're also charging people a subscription to said magazine.
What do you think makes up their cost model?
- Develop iPad app
- Build billing system
- Marketing budget
Do you notice something missing? I do.
What about the cost to produce content? Shouldn't that be there? You bet. Most magazines have writers getting paid to create content.
But no, not the person that has now asked me twice to use articles from this site for their application/magazine. That person wants the articles for free, to help me with my exposure. But has no trouble charging others to read what is freely available already on my site.
Let's do some math.
The app has been downloaded by 20,000 folks. Let's assume a number of those folks subscribe. After all, why download this particular app if you aren't ready to pay. So at $2/month and if stay customers for at least 6 months, each subscriber is worth $12. And if half of them sign up – that's a nice tidy sum of $120,000.
And that's with an app that's only been around a month or two. If that 20,000 grows or even stays at that constant rate for an entire year, we're talking about over $500,000 with two of the above budgeted costs as fixed (only marketing likely continues to grow).
And not a single penny going to writers.
So I passed.
Not because I needed the money. But because I didn't want to encourage that business model.
Now, let's talk about folks that don't want to spend a penny to make many of them
I know folks who want an entire eCommerce AND membership site, for an idea that is going to be incredible, but they can't afford to spend more than $500 on it.
I hear of folks (regularly) that have an urgent need to get a custom design for a site, but want it for free, to help with a designer's portfolio.
I know people who want a custom plugin written for them, but would like to pay afterwards, based on a small percentage of potential profits.
Are you kidding me?
Let's imagine this in any other world.
Remember when we were kids and watched Popeye? Even as kids, I know that the dude who said, “I'll gladly pay you Thursday for a hamburger today” was full of it. No way was that a good business model.
Yet we're surrounded by people like that.
People who seriously don't want to spend a penny until after they've made millions. And if this idea fails, who cares, others took the risk. They move on to their next ridiculous idea (like starting a new social network that's better than Facebook because it lets you determine which of your friends can see your content). Oh, for $400. As if that's what would help you compete. Go ask Google – pretty sure it's not the way to win.
Here's what I have against all of this
I have no issue with people making money. I have no problem with joint ventures and even where you get paid on the backend.
What I have a beef with, is that all this wheeling and dealing is done with people who don't always know better. We all know people who did stuff for way too cheap because they believed the hype.
I did. I bet you did too.
And since we all have to learn this lesson ourselves, there's a lot of getting ripped off that we have all experienced communally.
I hate that.
If you are going to make money, make money with people, not off people.
(yeah, you can quote me on that!)
I say no a lot
I say no a lot. I mean, all the time. And I do it because it lets me say yes to the things I really care about.
One of the things I really care about is paying people on time (even early) for great work. I rush to pay people. I mean it, seriously rush. Sometimes before their invoice hits my inbox.
Because I want to be known as someone who is willing to make money with you, not off you. I want to invest in your talents and see if we can collaborate to do something awesome.
And I don't want to rush to leave town because my reputation sucks.
So say no to people who just want to make money off you. Say no to those deals that sound too good to be true.
And say yes to being treated fairly and with respect. Come to expect a level of treatment that you can consider professional.
Say yes to that. And say yes to collaboration with people who pay fast.
It will be good for me.