From: terry@cs.weber.edu (A Wizard of Earth C)
Subject: Re: Suggestions for the free Unix projects
Reply-To: terry@icarus.weber.edu
Organization: Weber State University  (Ogden, UT)
Date: Sat, 3 Oct 92 22:17:03 GMT

My previous reply here got porked.  Sorry. --- here is what it should have
looked like:

=========================

In article <1akqadINN76c@almaak.usc.edu> ajayshah@almaak.usc.edu (Ajay Shah) writes:
>There may be a role for a profit-making company to make a $50
>shrink-wrapped free Unix with a manual and limited support.

I'll say!

Consider the following (US dollars):

o	The absolute minimum 150 page ring-bound manual and 3 disks costs
	~$20 including shrink-wrap labor.  This is quantity 1000.

o	Packing and shipping costs are a minimum of $16, assuming UPS
	ground.

o	A "media charge" for tape distribution of $18 is not unreasonable,
	assuming QIC tape and bulk purchase, given production time.  Add
	to this additional costs for amortization of alternate tape
	systems if they are going to be used.

o	A "media charge" of $30 is not unreasonable if CD-ROM's are used,
	due to the requirements of *huge* numbers to achieve the production
	price breaks.

o	A "media charge" of $80 for a *full* high-density floppy distribution
	(unless you own disk duplication equipment) using generic high
	density disks would be getting off light.  The price is high enough
	to inclde the additional packaging and shipping costs for the larger
	bulk.


I was the second employee at a startup company about 6 years ago, and
in the time I was there, I had experience in nearly every aspect of the
running of the company; these are not unreasonable figures.  So far we have:

o	$54 for a boot floppy and tape distribution.
o	$66 for a CD ROM distribution.
o	$116 for a floppy only distribution.

Many people would pay $50 for this, me included ...$50 is a *deal*!


Of course we haven't yet touched:

o	Technical writing costs of the manual.
o	A 1/3 page add in UNIX World (or the cheaper adds in UNIX Review)
	to sell to the people who can't just FTP it down (your market).
o	The cost of one or more educated support people over a year,
	amortized over the expected number of sales in that period.
o	The cost of a sales geek to answer the phone.
o	The cost of the facilities.
o	The profit (gotta pay me!).
o	The cost of real manuals when the small manual isn't enough any more.
o	The cost of losses (shipping costs on returned merchandise, failure
	to pays, replacement of manufacturing losses [bad disks, etc.])
o	Insurance.
o	Legal costs of defending against AT&T if you ship before the AT&T
	vs. BSDI suit has been resolved.
o	Potential legal costs if the people who have contributed so far
	get upset about you making money off their work.
o	Potential legal costs if UCB, CMU, or GNU get upset about you selling
	their code (GNU is real uptight about this, and CMU and UCB could
	easily get uptight if AT&T can prove licence violation, one of the
	charages against UCB).
o	Potential programming costs for duplicating the efforts of the user
	community contributions if they get pissed and start copylefting
	against commercial use.
o	Costs for drivers for hardware not already supported and improvements
	that are too large a technical project to be handled by just one or
	two programmers.


Now if we total all this out and add in all of the costs that I didn't put
in the list above (because I don't have time to post the definitive "How
to run your own software business" book) and round for a sufficient saftey
margin so that the first unexpected problem doesn't put us under...

How does $1000 sound?  Like BSDI?


Say, I sound like "Bruce" on "Talk Net", don't I?  8-) 8-).


					Terry Lambert
					terry@icarus.weber.edu
					terry_lambert@novell.com
---
Any opinions in this posting are my own and not those of my present
or previous employers.
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