Selling nothing is great way to make lots of money.

Vaporware?

Vaporware? (Photo credit: Brett Jordan)

I was watching Duck Dynasty. Yes, yes, It’s not real, I know. Regardless, it is pretty funny. In this episode, I ran into a really interesting concept that goes against everything the techie and software developer side of me stands for. In the episode, they had sold a ton of cooking DVDs through catalogues, and had only produced the cover the DVD. The DVD content itself did not exist. They were able to prove a market for the product and only then proceeded to make the DVD to sell. The joke was them running around to produce this crazy DVD that the main characters in it didn’t even realize they were doing.

In other words, they sold vaporware, and a whole lot of it, and only when they new they’d recoup the costs of the DVD did they actually make it. (I’m guessing if they didn’t recoup the costs, they’d have returned the money with some standard excuse.)

Throughout my entire technically inclined life (high school, university and beyond), I’ve been told to despise vaporware. In fact, I think this is why many developers really dislike salespeople. “Vaporware” is more of a dirty word than f*** or s*** in many circles. The only other term I think is equally used as a perjorative is FUD. Yet, in this circumstance, it worked wonderfully – it provided the capital they needed to make the video well, and if enough sales weren’t made they would simply use one of the standard stock excuses you hear and return the money.

It hurts me to say this, but selling nothing is a great way to make lots of money. Note I’m not saying that you should sell nothing and get paid for it, I mean selling something you don’t have yet and use that to raise funds to build it.

Sounds a whole lot like Kickstarter actually. Except, in this circumstance, if you don’t deliver, you will have legal consequences unless you give the money back (and even then.) However, in this circumstance, it’s a lot easier to convince people to pay in because it isn’t a donation, but an actual purchase.

So what to make of this? Personally, I don’t know. I know my team has some amazing ideas for hardware and software, but we don’t have the capital yet to follow through like we want to. Yet, to sell it without already having it built seems somehow wrong, even if the client gets the product in the end (and may even not realize that it was vaporware at any point.)

However, I’ve learned in my life the propaganda and ideologies that have been ingrained in me sometimes are dirt wrong. So, this is definitely something I need to kick around in my head a lot more.

As a rule, I’ve always either sold a product we had, or a service we were ready to provide as soon as the contracts were signed. However, if you were selling thousands of products to thousands of people, and you had a plan to have it ready by the time they expected it delivered, if you got the money, what to make of that? More people will be happy to get a good product and you will be able to continue to sell it after the initial bang.

Selling nothing seems to be a great way to make money and, in the end, make a great product from scratch.

What are your thoughts?

Enhanced by Zemanta

2 thoughts on “Selling nothing is great way to make lots of money.

  1. TJ says:

    The concept of offering a “pre-sale” of sorts to finance an actual product is not new. Product manufacturers have been doing this for almost as long as there have been products to sell. Some companies will even use a pre-sale to completely define the market (I’m thinking specifically of Ferrari: known for taking orders before production and then making one less than the requested number).

    I think the problem with trying to do something similiar with software, is the danger of over-promising and under-delivering. You end up with the old MicroSoft sales model of promising a product and essentially delivering your beta to market and using the sales from that to fund the patches and fix the bugs (even now, I’m hesitant to purchase a MS product within the first year or two because it just never seems to work the way it’s supposed to). Part of the “over-promise/under-deliver” problem occurs when you have a sales department that is separate from development & production. If the sales team is not 100% clear on what the end product is and what it will actually do, something will inevitably get lost in translation to the customer/end-user. This leads to an increased chance of unhappy customers.

    The beauty of Kickstarter is that it gives you way to raise the funds you need for whatever your project is and there’s a structure in place to protect those who are donating their money. You choose you’re level of risk/involvement; the project only goes ahead if the funding target is reached; you get a kickback that is proportional to your investment. Kickstarter ensures that producers don’t get “Money for Nothing”.

    • I somewhat disagree with Kickstarter, the examples of item after item that never was built on time, and in some cases not matching what was promised causes the same headaches. Kickstarter is not a store, as the rules state.

      The problem with risk/involvement is more prominent there, because it’s a donation. Thus, even if you don’t get anything matching the description, there really isn’t any recourse.

      However, it is a solution to the problem of presales for software.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s