🚀 go-pugleaf

Matthew Dillon writes
> In article <1992Aug8.190043.321@digifix!uunet.ca> sanguish@digifix.com (Scott  
Anguish) writes:
> >	Thats $320,000 over the life of the product.  But that doesn't include
> >	any of those other expenses.  I'm sure that Glenn and Jack draw a
> >	paycheck (as they are entitled to), and that there are other employees
> >	as well.  Next Computers aren't free.

>     Aren't you rationalizing now?  Still, using your figures, I would like
>     to point out that at $10 a pop, $320K over the life of the product is
>     pretty damn good for a restricted market!  You certainly do not base
>     your entire company's income on a single product!
> 
	$320,000 was for ALL four products. 

>     ways.  Here is one possible scenario:  Lets say some other company
>     produces softwware that makes one of your two products obsolete? They
>     undercut your price by 1:4 and come out with a marketing coup.  Even if
>     you were to move immediately to reduce your prices the marketing effect
>     would not filter through to the user community for at least two months
>     and in that time you could loose nearly all your market share for that
>     product.

	A company would find it very hard to survive with such low margins.   
And in many cases, it would not be worth their effort to produce the software.   
It is more likely that the company would price at the same level, but load up  
on features.  The new spreadsheet Mesa is a good example of this.

	The other problem is that as you increase your user base, your support  
costs go up substantially.

-- 
- Scott Anguish -
sanguish@digifix.com (NextMail)