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tcaudilllg
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PostPosted: Thu Jan 12, 2012 1:05 am    Post subject: Donations as a business model? [quote]

Does it work on a small scale?
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Nodtveidt
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PostPosted: Tue Jan 17, 2012 5:05 pm    Post subject: [quote]

Not usually. Crowdfunding is the best way to go if you're looking for any kind of "donations" on a smaller scale, though of course you have to have something to give in return to those who invest.
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RampantCoyote
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PostPosted: Tue Jan 17, 2012 9:19 pm    Post subject: [quote]

From very limited first-hand and a bit of second / third-hand knowledge, I can confirm what Nodtveidt has said. Donations, in general, seem to be a "go big or go home" kind of thing. I've no doubt that exceptions exist - particularly for charities or for religious service - but in general you need a lot of people to generate a little bit of revenue.
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tcaudilllg
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PostPosted: Fri Jan 20, 2012 4:51 pm    Post subject: [quote]

Well I'd like to offer software for free, because I know there are people who can't afford it. However I have to make a profit, right? Besides if someone can afford to pay for software they use often, shouldn't they offer a donation? A donation in this sense is "deferred payment", not charity. Why would someone choose not to pay someone for software that has functionality they would have bought from somebody else if money was demanded?

I remember that post RampantC put up about how a group of designers had made a million dollars off games that really weren't that exceptional or good, just because they let the user determine how much they were willing to pay. But they still demanded at least a penny. What's the difference? Is free software so deplorable that it is to be financially strangled, even though it is acknowledged as functional? What is the ethics there?

I guess my real question is that how we, as people who want to permit everyone, regardless of their financial status, to enjoy our products, can achieve this goal and remain financially afloat?
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RampantCoyote
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PostPosted: Fri Jan 20, 2012 8:22 pm    Post subject: [quote]

Part of the success of the "Humble Indie Bundle" was that part of the donations went to charity (there were default percentages, but anyone could customize their donations). So people got to feel good about donating to worthy organizations AND giving indie devs a token amount.

Since they were successful (as the "first"), there have been dozens of others that have tried to follow suit, but not done nearly as well. One of the laws of marketing, I guess. The other thing that worked was that the bundle was time-limited. You only have a couple of weeks to act, which is a *huge* deal.

As I have independently verified as best as I can, when you have something for sale for 50% off for a limited time, you can get massive sales. When you do a permanent price cut by 50%, you usually get a bump in sales, but then it returns to normal. The limited-time-deal is a huge motivator.

Anyway, I hear what you are saying, and I agree that in an ideal world, that would be what I'd prefer. But the truth is that very few people think that way, and even those that do (like me) tend to pick-and-choose what software or websites I give donations to. I usually don't even think about it until there's a call for donations... but if that call gets too constant, I filter it out. Again, marketing.

I know some projects - even games - have done quite well as donationware. Dwarf Fortress comes to mind. And even they offer something in direct return for donations. So in a sense, it's still a transaction. It's basically a token from someone whose celebrity is rooted exclusively in one game that a lot of people love, but it's good enough when couched as a "reward" for a donation of support to the company.

And for every Dwarf Fortress that earns a livable wage for its creators, there are thousands of projects that never hit that critical mass and make almost nothing (or literally nothing, much of the time).

So for my best guess, to do well through donationware would require a larger audience, and it would probably require you to hustle and market and push just as hard - or even harder - than any other monetization system. It's still capitalism, it's still marketing and sales, it's just a different way of going about it.
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tcaudilllg
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PostPosted: Sat Jan 21, 2012 2:32 am    Post subject: [quote]

OK, well why not donate software licenses to the impoverished, and demand money from all other users?
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tcaudilllg
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PostPosted: Sat Jan 21, 2012 6:23 pm    Post subject: [quote]

My impression is that I can't succeed on a pay model anyway. The reason why is that the system is not encrypted or protected in any way. Doing so would bog down performance, especially in a web browser. Some self-styled Robin Hood could come along and make it free to everyone by offering an alternative with similar functionality. I could withhold features from the free version and someone could create a patch to put those features in the free version.

One technique I'm considering, as such, is a charity system. Under charity, when you buy one copy, someone else gets the opportunity for a free copy.
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Nodtveidt
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PostPosted: Sat Jan 21, 2012 10:32 pm    Post subject: [quote]

If you don't think that you can succeed on a pay model, then you cannot succeed on a pay model. Half of the success of the pay model is having the guts to develop something good enough that people will buy it. If you don't think you're gonna get far with the pay model, you're never going to be able to develop something worth paying for.
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tcaudilllg
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PostPosted: Sun Jan 22, 2012 11:05 am    Post subject: [quote]

Nodtveidt wrote:
If you don't think that you can succeed on a pay model, then you cannot succeed on a pay model. Half of the success of the pay model is having the guts to develop something good enough that people will buy it. If you don't think you're gonna get far with the pay model, you're never going to be able to develop something worth paying for.


I disagree. Simple fact of the matter is, if you create something really valuable, these days it will be pirated. If it's within the reach of another coder to develop, it will be copied. I think I've just as much to fear from capitalists as the anarchists. The value of the system I've designed is intellectual... it's a web app, and as such is not that hard to modify. But it also lacks certain bells and whistles that are simply not in the ability of a poor person like me to provide. And I am poor... far, far below the poverty line.

I would like to make enough profit from it to pay people to help me make games. I want to grow the industry by pulling in people who have the potential to make great games, but haven't been given the chance. People who wouldn't have thought about it without my encouragement, but who nonetheless have the ability.

But somehow I have to make money. Somehow...
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tcaudilllg
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PostPosted: Mon Jan 23, 2012 12:30 pm    Post subject: [quote]

I think a non-nagging shareware model works best, along with a low price point (as in, below probable equilibrium). People pay for speed... if they want to use my software, I will give them all the functionality... but they will have to pay to see it run full-speed on a low end machine. ;)
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RampantCoyote
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PostPosted: Mon Jan 23, 2012 11:44 pm    Post subject: [quote]

Quote:
I think a non-nagging shareware model works best


Depends upon what you mean by "best." If you are talking highest revenue generation, it's my understanding you'd be dead wrong. The Association for Shareware Professionals has a lot of information on these kinds of systems, and if you google "website monetization" you'll pick up something like over 10 million hits. There's a LOT of data and articles on this already. Sadly, the shareware guys learned the hard way that nagging, disabled features and license keys *greatly* increased revenues. I'm not talking +10% or +20%, I'm talking whole-number multipliers here, if memory serves. All the stuff that we as developers *and* consumers hate. You have to figure out for yourself where you want to draw the line. Go too far in any direction, and you are shooting yourself (and possibly your audience) in the foot.

One option would be to create free tools with premium features for paying customers. The free stuff is of value to everyone, even those without the cash to pay for the premium stuff. You can also use the free site as advertising / marketing and a chance to interact with your users and find out what kinds of things they'd really want (and be willing to pay for) with a premium service.

That might give you the best of both worlds. It'll also help you discover the size of your potential audience. 'Cuz it's unlikely you'll entice more people to pay for your service than are willing to use it for free.
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Nodtveidt
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PostPosted: Tue Jan 24, 2012 3:15 pm    Post subject: [quote]

tcaudilllg wrote:
I disagree. Simple fact of the matter is, if you create something really valuable, these days it will be pirated. If it's within the reach of another coder to develop, it will be copied. I think I've just as much to fear from capitalists as the anarchists.

You don't have to worry about other coders stealing your work. If your idea is good, you'll have to ram it down people's throats. And pirates aren't going to buy it anyway, so it's not like you're losing money.
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RampantCoyote
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PostPosted: Tue Jan 24, 2012 4:54 pm    Post subject: [quote]

Quote:
You don't have to worry about other coders stealing your work. If your idea is good, you'll have to ram it down people's throats. And pirates aren't going to buy it anyway, so it's not like you're losing money.


My sales dropped in half *the day* pirated versions of my game became available. I didn't think it would make an impact on me, but it (apparently - yes, correlation does not equal causation). The main pirates won't buy your game, but they do their best to make it so nobody else feels the need to do so, either.

But you are dead right on that Howard Aikin quote. :) If you make the next Minecraft, then yes, you may have to deal with people cloning you. But until you've basically proven yourself by making gobs and gobs of money, fear of competitors is pretty silly. Yes, they may end up getting inspired by you, or take a few ideas from things you did totally right, but in general they are going to have as tough a time cloning what you did as you had making it in the first place.

And "ideas?" Dime a dozen. And that's only for the good ones. Which are nearly indistinguishable from the bad or mediocre ones.
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tcaudilllg
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PostPosted: Tue Jan 24, 2012 11:35 pm    Post subject: [quote]

I'll only venture that a -very- thorough understanding of psychology enriches your mind a thousand ways. ;) It's like Megaman: the more you understand others, the more you are like them, the more ability you have.

On the matter of psychology, it is my understanding that the main pirates are psychopaths, like the Joker. Their only real intention is to create as much anarchy as possible, which they do by driving people to desperation. The whole point is to ensure you don't succeed. On the other side is their enemy, the corporate sadist, who enjoys seeing other people jump when they say jump, especially if it creates friction in the private lives of their subjects.

RC, you say you're working on a Mac version? That could be a very good investment: Mac people, as a rule, are affluent, honest, and very appreciative of any software that is made for Apple devices. You might even go so far as to make it playable on an iPad.

Oh, and they LOVE games and typically have a great sense of humor. And they love unique art.
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Nodtveidt
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PostPosted: Wed Jan 25, 2012 4:55 am    Post subject: [quote]

I think you spend way too much time reading and partially understanding psyche journals.
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