Today, Erik Reagan of Focus Lab was reminded of an experience he had almost starting his own add-on development company:
Some choice bits from the article:
There were a few questions I looked at while planning Sidecar’s business. The biggest of which was our market and how to sell to it. The most obvious concern was how to support the software and not allow the cost of support to kill us financially.
At this point everyone in the EE world was selling a license for anywhere from $10 to $100 and support just came with the purchase. This seemed unsustainable so my plan was to sell the two separately. The license would cost $X and support would be some type of recurring cost model based on the amount of support a customer needed. Interestingly enough, EllisLab announced that type of model not long after. This supported my view of the unsustainable model.
Just before he informed the company that the project was going away:
After reviewing everything I realized the opportunity cost was exceptionally higher than the probable revenue from Sidecar. Focus Lab is too small, too young and way too interested in maintaining an exceptional level of quality with client services. Starting this add-on arm was possible, but only at the expense of our current services. That was unacceptable.