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Looper's Delight
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Good analysis, Jeff. And now the realities of the software business and profit generation sink in. The good thing about Software technology, which is why it is such a hot solution in the IT industry (REALLY hot), is that after you build the product, then you simply have to maintain, market, and support it...unlike with hardware, where you continuously have to factor out materials in your profit margin. In the PC industry, for instance, companies make on an average of $15 per laptop, after all costs are factored in. With software, once you pay for the R&D, then you getting close to pure profit after that (minus cost of sales, including marketing, support). So, I think your analysis is actually quite optimistic, relative to a hardware product analysis. Major fortunte 500 companies are shifting more toward software solution and services solutions to generate long term profit and growth. Kris ----- Original Message ----- > This got me wondering just how it is that with the literally thousands > of plug ins available today, nobody has created a cross-platform, > native looper with all the bells and whistles that works the way we > need it to. Hey what's that on the ground, is it a gauntlet? :-) The quick answer is that it is incredibly difficult to create a looper with all the "bells and whistles" and you could not possibly sell enough of them to cover the costs of a typical engineer working for a few years. That's why I doubt you will ever see one from Ableton, Native Instruments, Steinberg, etc. What you're left with are hobbyists that tinker with loopers in their spare time as a labor of love. They have maybe a few hours a day to invest, so something a corporation could throw an engineer at 8 hours a day for a year stretches out to 10 years, assuming they can even maintain their interest for that long. Most VST plugins are actually quite simple. They have some core DSP algorithms that are difficult to design, but the code that implements them is relatively small. The majority of VST plugins for Windows are written using SynthEdit which is a sort of like a simplified Max/MSP. This makes it easy for anyone that understands DSP algorithms to toss out a plugin in a week. It would be more accurate to compare a full-featured looper to a multi-track DAW, and there aren't very many of those. What you may see someday if looping increases in popularity is a corporation scooping up a shareware looper, adding some of that good ol' corporate polish and just giving it away as part of a package. Mackie did this with Tracktion to help sell hardware. > I would pay good money for this, and judging by the sheer amount of > people looping today, it would most likely make a profit. Not to belabor the point but I am constantly being told that people would pay "good money" for a more commercial version of Mobius, a Mac, port, some special feature, etc. Let's make a business plan: It is not uncommon for a senior software developer in California (not where I live) to make around $100,000 a year or more. The self-employed do not get health insurance in the US, so that adds another $10,000 for a family plan and you lose perks like a 401K, free training, conferences, etc. So let's set the "cost" of an engineer at around $125,000 per year. This is what you're going to have to compete with if you hope to lure someone away from their jobs at Oracle or Microsoft. Software developers work at different rates, but I would estimate an average engineer working alone would require at least a year to start from scratch and build a full featured cross-platform looper, and when I say "full featured" I'm setting the bar high. And that's just to write it. Then you've got to test it, which is also extremely difficult. The slightest change requires stopping and testing hundreds of little pieces of functionality to make sure you didn't break something. Double that if you support both Mac and Windows. You will need a "beta test" program involving other people that must be willing to donate their time, or you must pay them. Let's be conservative and say it will take 2 man-years to create the worlds most amazing looper. That's $250,000 in engineering costs you have to clear before you see "profit". If we price it at $250 we'll break even after selling a thousand. I'm sure that some of the people on this list would consider paying that much but I don't think we're an accurate indicator of the size of the mass market. I remember hearing there were around 400 list members and if you are serious enough to want the worlds most ultimate looper, you're probably already here. A more popular price would be $100. So now we have to sell 2,500 to break even. How long will that take? For the last two years you've been living off venture capital or a loan that you still have to pay back. Now you have to start marketing, paying for adds in magazines, flying to trade shows, answering phone calls. It could take another year before you've paid off the loans. Now its profit time! Assuming we even get here, if you don't get sustained sales of 1,000 units per year your wife will start complaining about how much better it was at your old job. Eventually the market will saturate and sales will taper off. Meanwhile you're on the phone a lot giving technical support to people who are "new to this whole MIDI thing". No engineer in their right mind is going to quit their job and speculate on making a comparable living writing looping software. Then again, no engineer in their right mind would write looping software and give it away for free, or so says my wife :-) Regards, Jeff