Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
The temptations of profit
Published on February 13, 2004 By Draginol In Business

Stardock is a very profitable company. But I hate to say it, but we could be immensely more profitable than we are if we were just willing to do things we don't think people would like.

For instance, our site, WinCustomize, is the world's most popular skin site.  But it loses money every month. It doesn't even come close to paying for itself. At the same time, it has to compete against websites whose skins install spyware. Needless to say, they make a lot more money than us.

Occasionally we get offers from companies to pay us 10 to 15 cents per installation of our freeware and shareware programs if we agree to also install their software. Their software being spyware of various types.  Oh, how could anyone be tempted to do that?  Well, last week our software got 167,000 downloads just on Download.com (not counting other places).  That would be (if we use the 10 cent figure) $16,700 per week.  Let's say it was only $15,000 for easier math, that's roughly $60,000 per month. $780,000 per year.  Gets a bit more tempting then.

But we decline those offers. 

A lot of people speak of holding principles, but it gets a lot tougher to uphold those principles when "Big money" is put in front of you.  Principles, they say, are a luxury. Perhaps so. We're already profitable. How would things be if it were a choice between laying 8 people off or doing the sort of thing I mention above? 8 people with families to take care of.  I suspect it would be a lot tougher then.

But still, even now we find ourselves regularly competing on an unequal playing field.  We have one competitor who installs a MacOS X skin as their default skin complete with Apple's trademark as part of the skin.  The graphics themselves appear to have been lifted right from MacOS X 10.3.  On the other hand, the skins we include with our software are created by skin authors.  We include a Mac classic skin because Apple's legal gave us the okay on that -- but we made it ourselves, we didn't go and copy the resource bitmaps from MacOS 9 or something. Not including a MacOS X skin puts us at a disadvantage but we're trying to abide by Apple's wishes. It's their stuff.  Still, I wonder how many sales we lose each year because of that decision? I wonder how many sales our competitor gets at our expense because they can claim their software will make "Windows look like a Mac" upon install?

Another example, we're putting together a desktop aquarium. Our animators got the models from a website in Japan. Now, realistically, we could in all likelihood just use those make new models that are derivative and create new graphics and no one would ever know. But instead we contacted the author and put together a contract in which we pay him thousands of dollars, up front, to use his models. Why? Because it's the right thing to do. It's as simple as that.

But again, in the real business world, such actions put us at a competitive disadvantage. Many companies only worry about whether something is legal as opposed to whether it's moral. We have a company suing us right now to force us to let them use the files generated by one of our programs. Files we created. They want to use them so that they can compete against us.  Forget for a moment whether such an action is legal, I can't see how anyone can say it's moral.

But that's how so many businesses we run into operate, the only question is whether it's legal. And if it's not legal, they just ask themselves if they can get away with it?  I've been asked over the years why we play so straight and narrow? Why do we operate so transparently? Someone usually presupposes, "Do you do it so that you can look at yourself in the mirror?"  No. That's not why we do it.  I guess you could say I believe in the power of projection. That we simply operate in a way that we wish everyone else operated. And maybe, just maybe in some small way others will see our success and see that they don't have to go into that gray area to succeed.

Still, $700,000 to $1 million more in revenue -- revenue that would go straight to the bottom line, would be nice. And all we'd need to do is install spyware. And heck, while we were doing that, we could have all our skins and themes that are downloaded from our sites do the same thing, get that amount up to 2 or 3 million dollars per year. 

But you know what? I'd rather be part of the way things should be. Even if other companies don't necessarily operate that way.


Comments
on Feb 13, 2004
and thats why your customers are hard-core advocates of Stardock, and buy multiple products. Thats why so many users wont pirate your software, and even give the cold shoulder to those who do. I'm sure in the long rung it will also contribute to the company's longevity. Many of the software companies that include such spyware come and go. Sure the owners probably make a good bundle of money.

Difference between people who see their work as a business, and people who are passionate about it.
on Feb 13, 2004
Call me a dreamer, but I think that in the end, ethics will pay off. Of course, people download and install Kazaa everyday without worrying about the spyware in it. Maybe people will get fed up in the future.
on Feb 14, 2004
I'm a partner in a software products and services company, and we've encountered similar challenges. We put together a screensavers website as a way of generating some short-term revenue for ourselves and some nonprofits we care about while we work on our "real" products, and we have been absolutely amazed at some of our competitors.

It's bad enough that they sell public-domain images without being honest about the image source, but in many cases they also take commercial images, trim out the copyright information, and then sell products that include those images.

On the spyware side, they include spyware for the short-term cash and then roll a lot of that money right back into marketing so that they can sell even more of their spyware-ridden products. It's a great plan for them, and I'm jealous of the revenue they're pulling in, but it's just.... icky.

I know that I certainly plan to purchase Stardock products and to recommend them to people I know not only because they're great products, but also because you seem like "one of the good guys." I really hope that the general consumer gets fed up with the evil companies. Hopefully the good guys will survive long enough for that to happen, but if we don't at least we'll know that we failed honestly.
on Feb 15, 2004
Well that article certainly boosts my confidence in Stardock, even though I have only recently discovered Stardocks products. I believe that you can count on a product, if you know you can count on that company, and the leadership of that company operating on solid princliples--integrity. By the sound of this article Stardock is doing well in resisting the easy, short-term thinking, fast-cash, decisions, the often popular decisions.

How simple is it to just, "Do what's right?" Very simple. So simple. Yet, by some of the situations explained that Stardock has faced, obviously it is not SO easy. I know I can vouch for that truth from wayyy back when I was a scant four years old and mommy came and asked me "Did YOU take the cookie from the cookie jar?" What would you have said or what DID you say?? "Yes mommy, by the way I really enjoy getting disciplined?!" Haha, oh yeah, that is what I said too! Well getting off that subject, I can say for sure they have earned one customer who will confidently refer others. Glad to support a company that sets such an excellent example and that will put it's head above the crowd.
on Mar 10, 2004
Brad, I find your honourable stance most admirable but, dear boy, you will never become a billionaire like myself if you hold 'principles'. I have found the most marketable stance is to pretend to have principles but secretly keep none. It has made me and my dynasty alot of money! Perhaps you are already doing this, if so well done young man!

Sir Peter