On His Blindness (Pricing Rationale)

20 Mar 2011

Note: This blog will take about 20-25 minutes to read. To skip to a section of particular interest choose a link below. Then come back later to read the rest - it'll be worth it.

Pricing Rationale; 8.6 Price; CLD; Hosting; Price Complexity; Multiple Licenses; Lasso9

Lasso developers, in many cases (I'm one), invested years (in my case, a decade) into perfecting their skills in one language. As one can tell from emotionally charged comments on the list - we are truly all invested in the future of Lasso. We have invested into the grind of tens of thousands of lines of code, into the neural pathways of a preference of code writing. In the dark hours of the night, straining away with our brains and our passions, we carved magic out of the nothingness and are left with two assets: Lasso code, and Lasso skill.

Every person reading here has contributed to the overall asset which is Lasso code - from Ireland to New Zealand, from Canada to South Africa. There is inherent value in this asset, and we need to protect it. Whether we like it or not, we are all shareholders together. 

My own "preference" to use Lasso is as much an emotional connection to this skill set as it is value proposition to clients on why "Lasso is so great". Lasso is great for many reasons - but one key reason it is great is because of the inherent investment of skill it represents and the people who have this skill.

It reminds me of one of my favourite poems, "On his Blindness", written by one of my favourite poets: John Milton. After years of writing beautiful prose, Milton went blind pursuing his passion of writing. His ability to do what he is best at was taken away from him - largely due to staring at paper deep into the night hunched over his desk by candlelight. I reflected on this line many times when I saw the death of Lasso approaching;

 

There was nothing more saddening to me than seeing that talent of mine become useless. So I did what I could to prevent it from kicking the bucket. There is enormous value today in having great skill in Lasso. In the future, I have made it one of my life's goals to make it even more valuable.

To this end, I have invested more cash into LassoSoft in the last 4 months than I spent on the purchase of my house.  

Feedback

I am also overwhelmed by responses to the list (negative and positive). As my Grandfather notes in his latest book; "You can't steer a parked car". Lasso had been parked for a while. Lasso is in motion once again. We are driving it forward.

There have been more posts to the list in the last month than there have been in years. More posts in the last few days than in a long, long time.

Lasso didn't die, it was just taking a breather.

Pricing Rationale

There are a number of key points which have come up on LassoTalk. However, there are also some points which have been missed. I'd like to clarify these a little, which may or may not give people perspective. Either way, the pricing is not set in stone, and we will likely make intelligent adjustments to it over the next few weeks. 

Towards this end, there are some key areas which demand some more discussion. Ironically, as one noted on the list, the total amount of time to read the threads for just one single developer is a waste of thousands of dollars of man power. The combined value of the time is worth hundreds of thousands of dollars. I wish I could harness it as positive creative development energy instead of opinion-writing. But I am just as happy to see that there is so much to be said, and so many people saying it. Lasso is alive once again. 

There are really two key issues upon which I need to throw my own perspective: the pricing model as it relates to 8.6, and the future of Lasso which is Lasso 9.

The Price of 8.6

I guarantee you may have difficulty swallowing this: but LassoSoft LLC was right.

LassoSoft LLC inherited a product in Lasso 8 that had problems from their previous company. They had cleaned up all of the problems they could, attacked some of the remaining larger issues (like Zombie processes) and realized that the total man hours required to fix some of the remaining issues was not within their ability to afford time. So 8 was effectively dropped. The issues were too big, too nebulous. They could take months to fix and thousands of dollars in additional resources, and they didn't have months to dawdle (or extra cash).

So, they effectively mothballed 8 and turned their focus completely onto the Next Big Thing, Lasso 9. They were not able to get the 9-ball out the door, documented and production-ready, in time to survive. Here's where recently LassoSoft Inc. picked up the ball. 

In hindsight, it would have taken LassoSoft LLC an entire year to get 8.6 out the door, given what we threw at it.

In our initial strategic plan as a team (before we purchased the assets of LassoSoft LLC), we all (new and old team combined) agreed to drop development for 8.x and put all of our efforts into Lasso 9. I set aside the month of December to poke away at cleaning up and maybe wrapping some issues up in 8, just for the sake of it, for release on January 1st. 

After this, we agreed "The Fix Is 9". Why would you waste resources on an old product when you could make the newer product better and do what it should - run 8 code?

But, I promised we would listen. When the community aggressively pushed us towards cleaning up Lasso 8 instead, we paid attention. Much to the incredible dissatisfaction of our team, we put the entire weight of the development core on fixing the issues, and put aside the other brilliant ideas we had for moving 9 forward (or starting on some of the big ideas for 10).

Four months later, we are still in Beta with the damned thing - and most frustratingly of all, have only been able to clean up about 70% of the issues - leaving a few (show-stoppers) still remaining.

I'd like you all do do the math as well. Take three high-end developers with years of experience. Run them for four months - straight - on fixes. Add to that the purchase of test hardware, etc. Add to that the frustration of slogging through 5-year-old code from an old and now defunct development team.

Effectively, take your own salary for a year - add administration and pain cost and the cost of your production requirements. And we aren't done. If we want to really finish the issues in 8 completely, we need additional budget to go back to the drawing board and fix the remaining issues. We need to raise more - probably equivalent to what we have already spent.

Profit aside (I'm happy to break even, because I'm an idiot, and In Love With Lasso), you can see it ain't cheap. Let's say you are willing to work for a slave salary as a developer - then you are making at least 50k. Double that for overhead. If we take every person who commented on this list on the last few days and divide the cost of upgrade amongst us all equally (as the pricing model of the Old World Order would have us do), the upgrade would cost us thousands of dollars each.

I doubt that every one of the people commenting on this list would cough up a few thousand for a version release, just for the sake of it. Especially when some of the most vocal individuals haven't purchased a copy of Lasso since 2001. (That's 3 years before Google IPO'ed, for the record).

But here's a simple fact: I can't see any reason to move from 8.5 to 8.6 unless you are one of the throng who genuinely needed it. Why fix what ain't broke? We didn't fix any security holes, only irritants and stability issues. (One neglected fact in our marketing is that 8.6 is significantly faster than 8.5, as Kyle couldn't help himself making some obvious improvements while he had the hood open. We've not made a big deal of that, as we want to sell 9, not 8).

In fact, I will note that this idea of "not upgrading unless you need it" isn't my idea in the slightest. More copies of Lasso were sold between 3.6 and 7 than were ever sold in 8. People didn't upgrade, because what they had just worked. Embarrassingly enough, Treefrog deprecated its last 3.6 license last year. It worked, well not flawlessly, but it worked more or less, for 12 years. We had to force the owner off the 3.6 plank with a cutlass.

What I am saying here is that I do not expect everyone here to be willing to pay for the upgrade. Even so much as a dollar. And to those people I can genuinely say: you aren't the future of Lasso. You aren't even our customer.

Lasso 8.6 has nothing to do with fixing the problems of the past. Lasso 8.6 is a fix for the future.

It takes two to tango. (Right, Miles?) So we came up with a pricing model that would make it easy for people to upgrade, and more fairly represented the needs of the world. We did surveys and did counts and did interviews, and realized the following;

Upgrade to Perpetual Costs:

60% of people have 1 instance = $150ish

30% of people have 2 (or 3) instances = $300ish (usually individuals running a development instance, who should be CLDs)

10% = aggressive users and hosting companies (To be discussed later)

I don't expect that we will be a return on this investment, well, ever. Perhaps in 4 or 5 years. But if I had the choice to simply donate my cash to a worthy cause, it would be my mother's orphans, not a bunch of hyper-intelligent developers.

We discussed other options for payment as a team, especially at the beginning. Here are some other ideas, which I would still happily consider. The longer I think about them, the less likely they are to work;

1) One person could pay for the fix on one shot, as what happens often in the Open-Source world. Contact me if you have an extra $50-100k kicking around. That wouldn't cover our expenses, but it would give us a good blood injection to keep the faith rolling.

2) We have looked at (and are members of) Kickstarter.com. If there is enough interest, we can certainly either use this or a similar service (or build our own) and those who think it might work can throw in their cash to see if it gets to a high enough threshold. We voted internally that it wouldn't work, but it's a possibility.

I'm open to any other ideas, genuinely. Show me a model that returns the expense to the machine, immediately, or over time, so that we can push development at the same rate as we have done so for our first four months.

Alternatively, keep reading.

CLDs

One of the cornerstones of this new model or pricing is the CLD class. I truly believe that this class will be the future of LassoSoft. A group of people paying a small membership fee will ultimately provide a foundation to pay for development of the Lasso language for many years in the future.

If you have skill in Lasso, and truly believe in it's future, you should consider becoming a CLD. "I don't really need to be listed" and "I don't need any more licences" is irrelevant. WE need YOU. This is a new investment into your existing skill set, which will have a return on investment for you in making that skill set more valuable in the marketplace. It is a symbiotic relationship. This is where the future of this language lies. Your becoming a CLD right now is our future.

Those who want Lasso for free? If we have 1000 CLDs (one of my internal goals), we have enough revenue to support a solid company without a license cost in the future. See where that is going?

I will be discussing one of the excellent ideas put forward by a number of new CLDs this week, which is to allow CLD instances to be used on multiple installations to allow for modern agile development. I'll be checking the numbers and checking the technical realities, but it sure makes sense to me.

I intend to spoil the CLDs as much as possible.

Hosting Companies

Here is where the rubber hits the road: Lasso hosting companies. Ironically, it was in speaking with two hosting companies that the instance leasing model first appeared. Blame them. :)

One of the key issues in the old model of pricing for Lasso was - as everyone noted - that the one-off license model was very expensive and not consistent with the nature of hosting itself: the monthly model. Effectively, hosting companies were Lasso Leasing Companies: they bought the licences and amortized them over years for their clients. There was no direct correlation between the cost of Lasso and the number of clients they had: hosting companies took the risk and hoped that there was a payback once the license was paid for.

In this perpetual model, there is more risk for hosting companies to start up, and less (if no) future revenue for the future development of Lasso. Once you get a client up-and-running, it is NOT within a hosting company's best interest to upgrade them to a new version of Lasso. Heck, it's wasted resources. It is well within a hosting company's best interest to recommend to a client to stay with their existing version of Lasso forever - it's paid for, and saves the technical costs of upgrades. All this model wants from LassoSoft in the future is free upgrades, while they continue to collect residual income  from its benefits and the work of the Lasso developer. 

If a hosting company spends money anywhere, they just buy new hardware - and spends less on copies of Lasso. Hardware wears out, Lasso doesn't.

A copy of Lasso 8.x bought by a hosting company 5-6 years ago has been well amortized, paid for and is cleaning up nicely for the hosting company today with hundreds of hosted sites quietly filling their bank account. And yet the demand is made to create a free or practically-free upgrade for "all OS installations of 8 which have ever been released", back many, many years. I'm missing the mutuality of business logic here. There is no give-and-take, no symbiotic relationship. No win-win benefit. The dial must be moved.

Hosting companies represent the key usage of Lasso. Many clients who use Lasso use hosting companies to serve their products. Once the product has been developed (with the asset of Lasso skill) it moves to a hosting company (the asset of Lasso product). Most developers may still touch the client from time to time, but they are usually separated from the transactional costs of Lasso.

If you go to Lasso hosting companies websites, you will see the following types of upgrades;
 

And, you will see the same on Rackspace, 1&1, Hostopia and the like. This is the way the hosting world works: base packages to get you hooked, and then incremental upgrades for the little needs you have on the side. A cheap burger, and you pay extra for the ketchup.

How much time would it take a hosting company to add an additional line item: 8.6 upgrade or Lasso 9 for $x/month, and then keep money moving back to LassoSoft to fix issues which cause them to run to the datacenter late at night to restart a server because of a Lasso misconfiguration or zombie process? Absolutely zero cost up front to a hosting company (other than an advertising fee cum membership fee), and the whole machine keeps moving forward, this time with oil.

It would be good for the goose, and good for the gander.

One email to their existing clients, who can go to the new LassoSoft website and see for themselves that the Lasso world has changed, and they all get to make a little extra coin during the upgrade process and increase their monthly residuals.

I still have not seen good business case for a complaint from a hosting company. I have heard "this is too expensive" and "this is the death knell for hosting companies". How so? Because they were planning on auto-upgrading all of their clients in one bulk move to perpetual licences? I doubt it. Yes, this requires hosting companies to rethink how Lasso fits into their pricing model, and possibly take a leap-of-faith into a new pricing methodology and add a single line to their cost pages. But there is no way hosting companies would upgrade all of their servers anyway - even if it were free. The cost and hassle of doing so for a server which is ticking merrily away is a complete waste of resources.

The hosting companies who have not seen how simple and perfect this new model is for them are completely missing the point. This is not the death knell for them. It's a way of making their lives simple and better, now and in the future, at every level of the existence of Lasso. With a heck of a lot less risk than some of us others have absorbed.

LassoSoft is not selling copies of Lasso to hosting companies. We are selling it to their clients. This model doesn't just make sense for them, it's brilliant. It's future-sensitive. It's easy to make work.

Hosting companies sent out a quick advertisement to their clients indicating that they can upgrade to an 8.6 server for an additional X dollars. The clients who need it, or have the resources, upgrade. Those who don't, stay where they were. No fuss, no muss.

Two other side points in this rant:

1. One, if I call up Rackspace or 1&1 or GoDaddy with this model, they will be all over it like a fat kid on a smartie. $1000/month is chump change for advertising for Rackspace, and they will be getting instances for $2/month, which is a simple upgrade listing price on their site. But this would be a kick in the gut to individuals who have helped Lasso stay alive until today. I won't be making that call until our avid supporters have had time to get out in front of the pack and entrench themselves as we crank up the marketing engine. This is a community, after all, and I believe integrity would have us nurture it, not beat it with sticks on day one.
2. Before someone says "you don't know anything about the business of hosting", I will casually point out that I also own one of the largest hosting companies in the Lasso world (Treefrog is one of the top purchasers of Lasso licences in history). We have, however, made a conscious decision to not create an unfair competitive landscape by suddenly throwing in competition against Lasso hosters. Consequently, we will stick with hosting our own thousands of clients and not get in the way of the other hosting companies for the time being. We will not be offering public Lasso hosting unless the other hosting companies don't want to play in our sandbox.

Here's where I should shout out to ANU, (amongst others, but especially), who if not for support during the Dark Ages, would have meant the possible end of Lasso. Thanks, Chris. I want to protect you guys and make you fat and happy. Treefrog has made a lot of money by making a lot of other people a lot of money. I'd like to continue the trend with LassoSoft.

Again, as per usual, I'm happy to change my mind if you have better facts for me which I am missing. However, I would instead guess that one or two hosting companies will pick up this symbiotic model and drop-kick all of the others out of the marketplace and be the basis of our resurgence. I would bet that hosting companies who offer 8.6 and 9 licensing out of the gate will collect the bulk of the new business, and hosting companies who immediately come up with marketing and pricing strategies to adopt it with old clients will more quickly see the benefits of scalable pricing and be the shortest-term winners.

There is an opportunity here for the first few hosting companies who "get it", and are able to make the transition from the broken model of perpetual licensing to the active model of per-instance-lease hosting.

Oh, wait, we already have a few visionaries on board, after a few days (Check them out advertised throughout the 120k pages of this site). Please support them!

Multiple Licences

So if we remove the huge pie slice of of single instance users (80%), remove the pie slice of "a few" instance users (10%), we are left with the nebulous 10% of multi-site users within which hosting providers fall. There are others in this group who are ill affected, however.

In this group as well are larger organizations or full-time developers who run many sites from their machines for internal purposes. Typically they are using different "instances" as a way of protecting their internal resources or running multiple client sites.

If you are running multiple client sites on multiple instances - you are a mini hosting provider (even if you only serve your own clients). See above.

If you are running many instances for internal purposes, we may need to adjust the licensing a bit. Some suggestions have been made to this end, especially as they relate to cloud logic, and we are addressing them technically and numerically. Again, I'll get back to you all within the next few weeks. However, based on feedback and impassioned and well-articulated logic (Ke, where are you?), we will definitely be releasing a lisencing model for organizations who wish to run side-by-side failover instances in the cloud.

Having said this, if you are running dozens of instances, you are likely to be a larger organization for whom a slightly deeper price is a manageable problem. We need to do more research and get more feedback before we yank out any teeth.

On Price Complexity

Seriously, this is a group of hyper-intelligent, world-class, well-seasoned technical individuals who make decisions and purchases across a wide array of technologies and industries. Have you ever looked at Microsoft pricing schemes? Have you ever bought VMWare? How about purchased a PC?

If anything, this is merely speaking to the need for better communications from LassoSoft, which we will continue to work with you all to improve. I believe we have proven our intent to succeed, but I apologize if in the first few days it is not yet fully realized and clear in our messaging.

This is a complex world. One price isn't sufficient - we know that didn't work. Don't expect the pricing to get less complex. Just help us define it better.

The Future of Lasso is 9

Last but not least, I wish to bring up the final and most important point of this incredibly long rant.

Lasso 9, so far, is a failure. Not because it isn't amazing to program with, solid as a rock, incredibly scaleable and fast, and (approaching) being well documented. (Steve: Are You Done Yet?) ;) Certainly not because it isn't considerably better than Lasso 8 and tasty with a cherry on top.

Lasso 9 is a failure because it has missed the point about the asset value of Lasso programmer knowledge. Because Sean Stephens has discomfort about using Lasso 9 because he is so comfortable with Lasso 8. Because the perception is that one cannot apply one's Lasso 8 skill to be used in Lasso 9. Because my one talent is death to hide, yet lodged with me useless. Because every time I look at Lasso 9 code on the Lasso list posted by senior developers, I panic, and I feel I could just as easily go learn Java. My talent, it would appear, has been rendered useless by this newfangled code.

The next project is to clear up this misconception. Both through making it simple once again for the casual developer and making sure the old code styles work exactly as they used too.

Once backwards compatibility has been achieved, there is very little reason to not move sites to Lasso 9 from Lasso 8. Lasso 9 will run the code, so help me God. But there's the rub which everyone has missed: if we introduce a whole new model for Lasso 9, and not have this model be reflected in Lasso 8 first - why would anyone move to 9?

“If I asked them what they wanted, they would’ve said a faster horse” - Henry Ford

If we give away Lasso 8.6 for next to nothing, why would anyone, ever, move to Lasso 9. What would compel them to realize that they can still use their Lasso 8 skill in the Lasso 9 world, and not fear the future? If it is inexpensive or less expensive to move to 8.6 than 9, in any way, developers will just stop where they are, and Lasso will die at 8.

We need to compel end-clients to upgrade to move forward in a model which has a meaningful business concepts behind it. We can't suddenly start this tomorrow, over the next few years, as people start believing in 9. We need the business model to be adjusted today. In needs to start with 8.6.

I say again: 8.6 is not fixing the problems of the past, but the problems of the future.

This is the genius of the rationale behind the Master License. Get your instances of 8.6 covered, and additionally have access to 9. We'll take away the pricing pain of the move after you've accepted it in 8.

Paying for 8.6 isn't about paying for a version release of 8. It's about getting onboard with a better, more sustainable and equitable business model and helping turn Lasso around right after a crippling recession. As a group, we need to band together, put a few hours of effort into calling our clients and up selling them on a few measly bucks (like, $10-20/month), and get the train back on the tracks.

Admittedly, you alone need to make the decision is Lasso is "worth it". Outside of the skills you have already behind you (which saves your clients money and hassle) and the code you have already written (which has asset value) - there are also genuine benefits to the Lasso language which are worth the price, many times over. PHP, Python and Ruby are free, as in puppies. The overall cost of Lasso, when used in the right context, pays for itself many times over.

*In addition to backwards compatibility, we are also working on a mechanism for managing instances. Again, a second shout-out to Chris Wik at Anu who created a Webmin module for this which is currently the best way to manage them. We are finishing up one to manage instances more appropriately - but it didn't make it to the site launch, unfortunately.

Changing the Playing Field

To protect our asset: the asset of our skill comfort and the asset of our codebase, we must be prepared to accept that it won't be free to move forward. I assure you, of all of you, I have accepted it with complete conviction and focus of thought. I have taken the plunge. I beg you to join me, as we can't do it without you.

If we undervalue Lasso, I think we can be sure the world will not raise the price. Is php really so truly excellent that it is not worth an extra few dollars to your client to use Lasso? Given the propensity for hacking, the extra features and losing the client to the client's nephew? I personally have bet it is not.

In addition to all of the facts above - we still have some aces up our sleeve which we have yet to play, as it is important to first get a foundation in place before building a skyscraper.

Thank you for reading until this point, I'm sure you all need a stiff drink. As do I. Maybe it's KoolAid?

Happy programming, and have a great week!

 

 

For more comments about this post, check LassoTalk.