📄 hhgroup.doc
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If you have a program which you would like to turn into a commercial
product, and if your interest in commercializing the program is strong
enough to motivate you to do the dog work required to achieve that
commercialization, then we recommend that you contact us. We are not
interested in hearing from those with only a causual interest. What we
want is partners who will help us build THHG into a solid co-op of
software developers for the purpose of sharing overhead and fixed costs
and allowing us all to participate in larger ads than any of us would be
able to afford alone.
The Short Version:
==================
The Hobbit House Group (THHG) is a co-operative venture among software
developers.
We get substantial volumn discounts on software duplication services,
disks, labels, sleeves, printing and duplication services, mailing
costs, and advertising.
As a group, we have greater advertising power than any of us would have
alone, and a greater chance to obtain name-brand recognition
I, as co-ordinator of the group, along with other members, will help you
bring your product to a marketable state.
The group offers three plans whereby we will market and distribute your
product. These range from TYPE 1, where THHG pays all of the advertising
and production costs for the commercialization of your product to TYPE
3, in which you pay all of those costs. In any case, THHG performs
production, and distribution of the product.
In return for these services, the group gets a percentage of the profit
from your product. If you have no profit, we get nothing.
If you're interested, all the details are enclosed. Read on.
Paul Hinds
========================================================================
The long version:
-----------------
Please note that this is a somewhat hurried first cut description of
THHG (which is just starting up). I've concentrated on getting in all of
the relevant information, but without as much concern as I would normally
have to make the presentation smooth and unrepetitive.
What is The Hobbit House Group ("THHG")?
----------------------------------------
The Hobbit House Group is a co-operative venture among software
developers whose products are written in Borland or Miscosoft C/C++
and/or 80x86 assembly language (MASM or TASM). You can see our first ad
in the April, 1993 issue of the C Users Journal, page 115.
Why C/C++ and 80x86 ASM under Borland/Microsoft? Simple reason; I prefer
these for my own development and I feel comfortable supporting products
written in them. This is necessary because the co-operative venture
which I am putting together as THHG will have to support the products
which we sell, even if the original developer gets run over by a trolly
car. In the long run, we might grow to the point where we can support
products written in other languages, but for now we're sticking with
C/C++ and 80x86 assembly language and only those from Borland and
Microsoft.
The concept is simple. Many of us have an idea for a product, and
perhaps even the developed software that can be turned into a commercial
product. What many do not have is the time and/or money and/or
inclination to do the dog work which is required to commercialize a
product. That's where THHG comes in.
There are two major sets of "dog work" required to commercialize a
product:
1) The stabilization and documentation of the software such that it is
supportable in the long run and doesn't cause product returns in the
short run. It is useless to sell a product for any amount of money if
a significant portion of the user population is going to return it in
disgust after discovering the first three major errors it contains.
Alpha and Beta testing are absolute necessities. Documentation must be
far more than casual. And on it goes.
2) All of the issues other than the software development. Some of the
required jobs are:
o find a place to do the disk duplication with good reliability
and reasonable price.
o design, and contract out for the production of, a physically
attractive and professional looking product and perhaps demo
disk as well --- a custom label, perhaps a custom disk sleeve,
a professional-looking mailer, etc.
o decide where to advertise, write the ad copy, come up with the
bucks to do the ad, contact the magazine, negotiate ad rates,
etc.
o write new product announcements and distribute them to various
magazines
o find the time to do the dog-work of stuffing mailers, answering
ad inquiries, etc.
o research licenses for compaction programs and choose the one to
use with your product. Contact and negotiate with the vendor.
o decide on pricing strategies for multiple/LAN installations
It goes on from there.
THHG is a co-operative venture by software developers to take advantage
of volumn discounts on all direct costs, including disks, software
duplication services, customized lables and sleeves, mailers, postage
costs, advertising, etc.
A major advantage of THHG will be that together, we can afford
larger-sized and more frequent ads that are more likely to attract
attention. Many readers barely glance at the little ads in the back of
the magazines, which is all most of us could afford if we go it alone.
With the total advertising power of the group, we have more chance to
build the name recognition that is difficult for an individual to
acquire.
Another advantage of THHG is that we will be able to market small
products which would not otherwise be financially viable. If you have a
minor utility that you think might realistically sell for $10, what can
you do with it? Unless you really think you'll sell an awful lot of
them, you don't dare spend the money to commercialize and advertise it,
since that would cost too much and you'd almost certainly end up being
out-of-pocket on the deal. With THHG, you can just add it to the product
list. It won't be advertised, but the list goes out to everyone who
contacts the group for any product. If it sells, great, if it doesn't
all we are out is the relatively small cost of procucing a few copies.
I am a firm believer in TANSTAAFL. For those of you who aren't Science
Fiction fans, TANSTAAFL is a layman's version of the Second Law of
Thermodynamics, to wit:
TANSTAAFL => There Ain't No Such Thing As A Free Lunch.
- - - - - - - - -
That is true of THHG as well as everything else in life. I'm not
attempting to put this venture together for my health or as a hobby. I
expect it to take me a great deal of time and energy and I fully expect
to be paid for my efforts. It is not my intent to ask you for money.
This is not the software equivalent of "vanity press" book publishing. I
won't ask you for any money up front, nor will I pay you any money up
front. What I will ask for is a share of your profits, once there ARE
any profits. If there are no profits, I get nothing.
This will greatly annoy some people. If the thought of anyone else
making money off of your efforts annoys you, I ask you to consider that
many people (writers, actors, etc.) employ others to market their
products/efforts, and that payment is traditionally based on results
(I.E. a percentage of the gross). If it still annoys you, then THHG is
not for you.
You should also consider that THHG may be the only realistic way you CAN
market your product since you may not be willing to put in the time,
energy, and money that it takes to do it on your own. It's hard enough
just making software commercially viable; the other half of the job,
advertising, producing, distributing, etc., is more than most of us want
to take on.
This venture is structured so that we can both get what we want. I am
making an assumption here, of course, and it is that what we both want
is to see our products go out into the world and to make money doing it.
There are three different product categories which determine how your
product is dealt with. All of the membership
duties/requirements/advantages, are the same, regardless of what
category your product falls under. The designation of product category
will be one which we mutually agree on. If you have more than one
product, they can be in different categories.
Under no circumstances do you pay any money to me out of your pocket.
Depending on the plan we agree on for your product, however, you may
have out-of-pocket expenses for the commercialization of your product.
THHG does not see a penny until your product begins to turn a profit.
The three product categories are:
TYPE 1 --- THHG Pays It All
---------------------------
You pay no direct costs (THHG pays for production, advertising, etc.).
You have zero out-of-pocket expenses, now and forever.
THHG puts out all of the up-front risk on this type of membership and
consequently takes a proportionately large share of any resulting
profits, starting at a 50-50 split, pretty quickly dropping off to a
33-67 split (you get the 67), and eventually trailing off to a 15-85
split.
Products which, for whatever reason, do not strike me as having adequate
commercial potential will not be accepted for this category.
Initially, we are concentrating on small and medium scale products which
can be effectively advertised in The C User's Journal. If your product
is such that it would require, for example, a full page ad in PC
Magazine, we are interested but do not yet have the capital to deal with
the required ad budget. Such a product could not be a TYPE 1 product,
but could be TYPE 2 or TYPE 3.
TYPE 2 --- Middle of the Road
-----------------------------
You pay all ad costs for ads which are specific to your product. THHG
pays up-front production costs and all costs for joint THHG ads, of
which your product is only a part.
We will have to agree on the ad budget, and I have to be convinced that
your product is acceptable for this level of membership.
Depending on the product, your initial ad costs could be as low as $500.
After that, if profits warrant it, you might want to spend more on
advertising. THHG will continue to pay all production costs.
The profit split on this category starts off at 40-60, (you get 60),
drops rapidly to 25-75 and trails off to 15-85 on large profits.
TYPE 3 --- You Pay It All
-------------------------
You pay ALL production costs and all costs of ads which are specific to
your product. Your payment can be direct to the distributer of the
services provided or via THHG, but in no case do you pay anything other
than the exact cost of the services rendered for your product. You get
the advantage of volumn discounts on all direct costs and ads, and you
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