On Getting My Money Five Bucks at a Time

[Dan Shafer]

The current discussion about open source and commercial software and  
their attendant business models reminded me of an historical artifact  
I decided had some potential interest and value here. I'll share it  
briefly; if you're interested in pursuing it further, I'd be happy to  
participate.

Back in the late 1970's and early 1980's -- a couple of millennia ago  
by computer standards, I know -- there was a company in Oakland, CA,  
called MaxThink run by a very cool guy named Neil Larson. (The  
company's Web site is still online at www.maxthink.biz but I don't  
know if they're still doing business.) Their primary product was  
called, oddly enough, MaxThink. It was an outliner on steroids. It  
ran only on DOS. It sold for something like $50. And I was addicted  
to it. IT did some things that as far as I know no outliner today  
approaches yet.

Neil promoted his products (he had a couple of other titles that were  
also very useful that I also bought, as I recall for less than $50  
each) through a wildly entertaining and outrageously opinionated  
newsletter that came by snail mail every month (this pre-dates the  
Web, of course).

This is the trick. Every 2-3 months, Neil would introduce a new add- 
on or upgrade for his products. These would generally be relatively  
inexpensive (again, memory tells me they were under $20 each as a  
rule) and would be such wonderful additions to the main product or  
improvements on it that you just couldn't see a reason to say no.

Well, one time my company applied for a line of credit at a local  
bank and among other things they asked for an inventory of all the  
software we owned. I was stunned to find that MaxThink had, over the  
space of something like 2-1/2 or 3 years, gotten more of my money  
than Bill Gates had managed. If you'd asked me, I'd have said the  
MaxThink software was near the bottom of the paid value list of  
software we owned but it was at the absolute top.

Subscription models -- which didn't exist then, of course -- that  
offer, for a relatively low-priced product like Constellation or even  
a moderately low priced product like Revolution, enhancements,  
updates and add-ons at small incremental charges (encompassed in the  
subscription but available for extra fees for non-subscribers) seems  
to me to have the best promise for a solid business model for  
software, especially for developers and hard-core users. And I think  
the MaxThink model proves that point.

I'll now return you to your regularly scheduled messaging.



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dan Shafer, Information Product Consultant and Author
http://www.shafermedia.com
Get my book, "Revolution: Software at the Speed of Thought"
 From http://www.shafermediastore.com/tech_main.html