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I personally prefer to partner per project. I think I should make it an acronym, PPP. Giving away 30% of the project's net income for the lifetime of the proje

I personally prefer to partner per project. I think I should make it an acronym, PPP. Giving away 30% of the project's net income for the lifetime of the project makes a developer more invested, and is better than giving away 2% of your company. The $$ comes quicker for the developer, and you as a company take on less risk. Vesting company options with a cliff can really screw a developer. Vesting equity in a particular app or project makes the incentives align correctly.

DenisM 12y ago
Never heard of this before, but it makes sense. Does it work well for you in practice? Are you not worrie your product is made a loss leader, driving your share to zero?
- zkhalique 12y ago
  No we aren't. Consider this: your company could be producing more products than it currently is. You have tons of ideas but not enough resources to do them all. With PPP, the cost of a developer now becomes just attracting and onboarding them. What are the chances a given project will succeed? They are less than 30%. So, the expected value of this strategy vs paying for the developer is positive, especially if you don't have the $ to spend on all kinds of projects and see what works. So you can certainly justify it for projects that you wouldn't have otherwise undertaken. The projects that you have to develop for sure, are another story. And then there is everything in between. This is just a great way to structure those deals fairly and align incentives instead of trying to optimize your own share. If the project fails, then you lost nothing. If the project succeeds -- and the developer is more incentivized that it will -- then you get a partner with whom you are both interested in increasing the revenue. We've done it with our apps and have been happy with the results. It works especially well with startups without a huge budget, but a platform and technology that can be used by many people. We've actually open sourced our platform, and in the future plan to do an entire accelerator program around this concept. In our situation we have a few more things: * We have a clause that if the developer leaves and we spend X amount (at our discretion) on the app, then 30% of X is coming out of the money due to them, with the proviso that they won't ever get less than 10% in any given month. And of course they get 30% only if they launch version 1.0 of the product, and complete all the deliverables. * We have a quarter million monthly active users, so the developer is interested in working with us vs stealing our idea and going solo. Because if they launch through us and we handle all the QA, production, launch etc. then we can get their app a big userbase from day 1. They are as happy as we are to give 30% to Apple for taking care of all the sales, fulfillment, credit card processing etc.
  - DenisM 12y ago
    Is there a time out on the deal? Or is the 30% perpetual?
    - zkhalique 12y ago
      We have it perpetual. Don't know if that's good or bad, since that would require going all the way to the end... but that's what we've chosen. You can try your own way.

DenisM 12y ago

Never heard of this before, but it makes sense. Does it work well for you in practice? Are you not worrie your product is made a loss leader, driving your share to zero?

zkhalique 12y ago
No we aren't. Consider this: your company could be producing more products than it currently is. You have tons of ideas but not enough resources to do them all. With PPP, the cost of a developer now becomes just attracting and onboarding them. What are the chances a given project will succeed? They are less than 30%. So, the expected value of this strategy vs paying for the developer is positive, especially if you don't have the $ to spend on all kinds of projects and see what works. So you can certainly justify it for projects that you wouldn't have otherwise undertaken. The projects that you have to develop for sure, are another story. And then there is everything in between. This is just a great way to structure those deals fairly and align incentives instead of trying to optimize your own share. If the project fails, then you lost nothing. If the project succeeds -- and the developer is more incentivized that it will -- then you get a partner with whom you are both interested in increasing the revenue. We've done it with our apps and have been happy with the results. It works especially well with startups without a huge budget, but a platform and technology that can be used by many people. We've actually open sourced our platform, and in the future plan to do an entire accelerator program around this concept. In our situation we have a few more things: * We have a clause that if the developer leaves and we spend X amount (at our discretion) on the app, then 30% of X is coming out of the money due to them, with the proviso that they won't ever get less than 10% in any given month. And of course they get 30% only if they launch version 1.0 of the product, and complete all the deliverables. * We have a quarter million monthly active users, so the developer is interested in working with us vs stealing our idea and going solo. Because if they launch through us and we handle all the QA, production, launch etc. then we can get their app a big userbase from day 1. They are as happy as we are to give 30% to Apple for taking care of all the sales, fulfillment, credit card processing etc.
- DenisM 12y ago
  Is there a time out on the deal? Or is the 30% perpetual?
  - zkhalique 12y ago
    We have it perpetual. Don't know if that's good or bad, since that would require going all the way to the end... but that's what we've chosen. You can try your own way.