5 ms·
Very few people are willing to pay the kind of money that would actually sustain a company. Let's run the math, and see if we can build a business around a tex
by drewcrawford 10y ago
Very few people are willing to pay the kind of money that would actually sustain a company.
Let's run the math, and see if we can build a business around a text editor.
Let's say we can get away with 2 good developers (across 3 platforms, that seems difficult to me). Let's further stipulate they are willing to take a pay cut from their previous life at Facebook and are willing to do this as a labor of love. 90k/yr salary, 180k/yr for both.
Now we need a technical writer, to handle API documentation etc. Let's say we can get a CS major to do it part-time at 20 hrs/week at $20/hr. 20k/yr.
We also need a sysadmin to wrangle the CI setup, website hosting, install updates, setup email, etc. Suppose they automated everything in Ansible/Docker/Kubernetes/whatever_the_cool_kids_do_these_days and so we only need 10 hrs/week at $50/hr. 26k/yr.
We need a QA engineer to bang on things and file proper bugs. $50k/yr. Let's further stipulate that this same person will handle customer support, because we're a lean startup and combine multiple roles in the same individual.
We need somebody to handle marketing (or maybe direct sales, since it's a $700 pricepoint). Let's call it another $50k/yr.
We're now up to $325k/yr. Traditionally we would now have to lease office space, buy macs, call our AWS sales rep, etc., but let's assume for this conversation everybody works from home, they have their own equipment, and we got free startup AWS credit, which is not very realistic at all, but whatever.
So let's stipulate this is a stable burn rate. Nobody will get poached by Facebook, nobody needs to raise a round, if we can pull in only 325k/yr, we can do this forever.
When we sell our $700/license, let's say we net 75%. That is actually very high: most software companies net around 50-60%, because the App Store, WalMart, the state, etc., take their pound of flesh. But our $700 text editor is so amazing that people will buy it direct from us, we will have a strong brand, handwave. So we take home an incredible $525.
We now need to sell 700 licenses year-over-year in order to keep this thing going. Not even 700 licenses one-time, but we actually need to close 60 licenses a month, 2 licenses a day, 365 days a year. To do that, we needa sales process.
I would love to live in a world where a salesman knocks on your door, does a 2-hour demo, and at the end you have 50% conversion to writing him a $700 check. I just don't live in that world. And that's the kind of sales process you'd need to sustainably develop a text editor.
Anything short of the exercise I just went through will result in a failed product. A developer might take a pay cut for a year but will lose interest if they're well below market. If we don't hire good QA then our quality will be shit and not worth $700, just think of all the shitty software you use already. If we don't have support then nobody will want to spend $700 to get their emails ignored. If we fund via VC then we will have to blog about Our Incredible Journey the next time Google Docs needs an engineer.
The result of this analysis is the current market. The only way to develop a text editor is either all volunteers (like Atom), a small part of a large corporation's marketing budget (VSCode), or a labor of love from one and a half underfunded and overworked people who we somehow expect to stop being underfunded and overworked even though we only paid them like half a billable hour several years ago (ST).
- jcrawfordor 10y agoYou're setting up a company that expects massive growth. I would expect most text editor companies to start out with one person only, and expand only later if they have a steady revenue stream. The extra personnel are nice but not at all necessary when you are at a low sales volume with a single product.
- smrq 10y ago> Now we need a technical writer, to handle API documentation etc. Sorry, but you've already lost me there. That's firmly in the "nice to have" camp. For example: the documentation on Sublime's API is shoddy at best, but enough plugins still get made that I'm incredibly happy with it as a product. Your math adds up to what would be a great team, but there's no way you can call it the bare minimum to create and maintain a great product.
- coldtea 10y agoYou DO know that apart from a programmer and a helper sales guy, ST has none of all those other "roles". And judging from the community size, polls, and similar numbers from other project, it has sold at least 10.000 licenses (x70 -> 700,000) and i all probability much more. >The result of this analysis is the current market. The only way to develop a text editor is either all volunteers (like Atom), a small part of a large corporation's marketing budget (VSCode), or a labor of love from one and a half underfunded and overworked people who we somehow expect to stop being underfunded and overworked even though we only paid them like half a billable hour several years ago (ST). Maybe it's the analysis that's way off base, especially the dev numbers. In fact the whole breakdown sounds ludicrous, like assuming the only dev work out there is done in cushy Facebook style jobs in the Valley or with extravagant VC money. In fact tons of successful indie apps, not just editors, fly in the face of all you wrote above. No reason to believe a graphics editor (e.g. Acorn) or VST plugin (e.g. uHe Diva) or FTP Editor (e.g. Transmit) has much more potential users than a language/OS agnostic programming editor. And yet, all these companies exist for years, and even have several employees and nice offices. As for editors, there's not only IntelliJ, that has tons of people working for it and is doing just fine, but other long time companies, like UltraEdit (that boasts 2 million users), a whole ecosystem around paid Eclipse plugins, etc.
- 10y ago