The Best Pricing Model for non-FEM Structural Software - KootWare 5

[KootK]

The Mission

While I'm still above grade, I intend to create a suite of pay for play, online structural engineering tools (KootWare). And I feel that a big part of making this questionable venture a success -- or at least improving the odds of a contained failure -- will be arriving at a good pricing model. Frankly, this is something that I feel that other developers have done poorly, to their detriment. As such, I'd like to solicit feedback from the hive with respect to the pricing models that I'll propose below and any possibilities for improvement.

The Basics of What You Need to Know About the Offering

1) 100% online offering. No option for a local, perpetual license version.

2) The goal here is not to get rich. The goal is to extract enough income from this that I can justify pouring a lot of effort into a project that I expect to enjoy a great deal.

3) Spit balling, if I could create enough value that I could convince 1000 SE's to part with $5/month, that would be enough. Or any other combination of numbers that gets to the same place. How many software using structural engineers do we think exist in North America anyhow? Sixteen? Eighty thousand? I really don't know.

4) Think something along the lines of TEDDS, ENERCALC, or Jabacus on steroids. I do have ideas for, in my opinion, greatly improving upon these offerings. I'd like that to be a separate conversation however. For now, make a leap of faith and just assume that it will be awesome.

5) I intend to attach some manner of structural only, online forum to the offering. While it would be a free-form space for conversation, as Eng-Tips is, it's ostensible purpose would be to provide a place for me to provide responsive help to anybody designing stuff utilizing the software. Thus making the whole thing even more fun for me. This would be offered in addition to the usual help guide and verification manuals etc <-- edit added per skeletron's comments.

Some Obvservations that I Have Regarding the Pricing Models of Others

6) For software of this type, I feel that a monthly subscription pricing scheme would not be well received. As a small outfit my self, I loathe taking on any additional "monthlys", no matter how great the ROI seems to be. I'm always afraid that I'll use it twice and forget to cancel. I doubt that I'm the only one who feels this way.

7) I also don't think that a straight "pay per use" model is the way to go either. Design is an iterative process and software licensing needs to reflect that. Sadly, I don't just design a shear wall once. I probably design it half a dozen times before all is said and done. And I can't be losing my shirt on pay per use while going through that process.

8) One has to assume that anything that can be abused, will be abused. This will prevent me from being quite as customer friendly as I would otherwise wish to be. My own IP halo gets a little dirty from time to time so no judgement here.

Pricing Model A

This is my favorite of the two and would appeal to me as a customer. Keep in mind than none of the particular values are set in any way. It's really more about the structure at this point. That said, if anybody has thoughts on what the numbers ought to be, I'd welcome that too. I figure I'll adjust as use data starts to pile up but I'll still have to start somewhere.

1) Create an account at KootWare International and add a credit card, paypal etc.

2) Buy yourself some quantity KootWare credits. $10. $100. Whatever. Little gold doubloons in your digital purse.

3) To access the retaining wall tool for use, you pay $5. After the first run, you have the lesser of 20 additional runs or 60 days to keep using the tool on the original $5. One "run" would represent one execution of a full design with detailed output. <-- added per skeletron's comments.

4) If you want to share your account login and credits with somebody else, that's your prerogative. Share it with your coworker, a school chum in Brisbane, your aunt... retaining walls for everybody on that original $5. But, no matter who's using, it taps out after 20 runs or 60 days.

Pricing Model B

1) Create an account at KootWare International and add a credit card, paypal etc.

2) Buy yourself some quantity KootWare credits. $10. $100. Whatever.

3) You can use any tool your like, for free, but you can't get a detailed printout for your calcs until some money has changed hands. The software would tell you the basics of what passed and what failed and would allow you to save your file to the system for future retrieval. I kind of like this in that it would allow one to essentially do their preliminary design work for free. I could allow folks to printout their inputs in case they were worried about my going bankrupt before they get to IFC.

4) When you've got all your design settled and ready for final calc documentation, it's $5 per print. The trouble with this is, I couldn't let the user see the detailed printout ahead of paying for it. Otherwise, I'll wind up with a bunch of folks just doing screen capture etc.

 

[glass99]

Re: street cred: Could you get the AISC or ACI to endorse the software?

Could you offer it for free for some duration to build a fan base then incrementally introduce a subscription? Network effects are important.

Could it be ad supported? Google ads are one easy possibility, but a better one would be sponsorship from say VSL or Hilti. You could call the marketing departments of these places. Localized ads for say local steel fabricators or contractors would be a good way of leveraging the web platform. The AISC has national database of steel fabricators which you could dial.

 

[bookowski]

Hard to stop all the non-paying users while still allowing any access. People are motivated and you may have to bake in a certain % of freeloaders.

I'm probably more of a hack than most, and I am never required to submit calcs, but if I had confidence something was giving me the correct result but I had to pay for the detailed output I'd probably be happy w/out the result. I don't print results for 99% of the stuff I have anyway. I'd be careful to not overestimate the percent of people that want a final print for their files. In my mind if I am confident it works then worst case scenario means I have to come back and reproduce it some day.

I've managed to do a relatively complex 1 story steel framed building entirely in risa demo version, 40 nodes. There will always be people doing this kind of thing.

Another option to consider that would allow testing but limit freeloaders is to lock a few values to very annoying defaults. Make the concrete tools fully functional but f'c = 12ksi, Fy = 40ksi, only #9 and larger bars available. That plus a watermark would annoy most enough while still allowing full testing. After that it's pay to unlock it, regardless of final print/design. Obviously once it's unlocked that means you either have a subscription or time limit though which goes against your kootk coins.

 

[KootK]

@glass99: thanks for your contributions to this, they are appreciated.

Could you get the AISC or ACI to endorse the software?

Honestly, I don't know. This isn't something that I've considered before, either for my endeavor or when I use existing software. I'm not suggesting that you're wrong; I just didn't have this aspect on my radar until this morning.

Could you offer it for free for some duration to build a fan base then incrementally introduce a subscription?

I plan to do something like this. Something like:

1) A basic set of tools always free.
2) Perhaps newly introduced tools free for a spell.
3) Maybe a perpetual rotation of random tools being free. If I could do it without annoying my customer base, maybe there could be a monthly email saying "X,Y,&Z are free this month! Check 'em out". That, of course, weighted against the consequences of being a purveyor of spam.

Could it be ad supported?

It's certainly something that I've considered. Unfortunately, I think the order of operations really goes: BUILD SOMETHING AWESOME --> GENERATE DEMONSTRABLE TRAFFIC --> SOLICIT SPONSORS. I haven't yet built anything awesome.

For fun, I might go talk to my bank about this. "So... I don't know who my customers are, how many of them exist, or what they want really. Can you float me for a couple of years while I test the market?". KootK <> Richard Branson.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[KootK]

People are motivated and you may have to bake in a certain % of freeloaders.

I absolutely would have to bake in a certain percentage of free loaders. Under ModelC , I wouldn't even attempt to stop them.

I'd be careful to not overestimate the percent of people that want a final print for their files.

Acknowledged, and thanks for this. I will, however, push a bit on this:

In my mind if I am confident it works then worst case scenario means I have to come back and reproduce it some day.

I'm not sure if I conveyed this well but, under pricing ModelC, users who don't pony up would lose access to their design files, as well as being limited in printing. So they really couldn't come back to reproduce their design unless they were willing to recreate it from scratch. Do you think that this might incentivize you to pay in some instances?

I also don't submit calculations for many of my projects but, at the same time, I do retain the design files for anything important that I don't print out. In some cases, like with a big transfer beam etc, the time associated with re-entering the loads etc might represent enough of a hassle that I'd prefer not to have to do it again just to save a few bucks.

This might suggest another possible tier to the pricing scheme: send me $5 every month and I'll not delete all of the design files that you created for free. Given that I'm only wanting $5/month from my customer base anyhow, I can probably make a go of that.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[glass99]

An important way these things get marketed is lunch and learn presentations. You decide you are going to drive to Boston for the day or a few days, and you line up every structural firm in town and ask if you can bring pizza and a powerpoint. If you can get the presentation accredited as PDH's, you have a better shot at your pizza being eaten.

Development and marketing will require some investment.

 

[Huevo]

There are roughly 19,000 active civil and structural engineers that live in and are licensed in Texas. Of those, 3,100 have specifically identified themselves as structural to the state board. I think you could safely use that as a lower bound for the target market in Texas.

 

[KootK]

Sweet... there's my 1000 right there if I can woo them. Probably skewed towards industrial relative to other places I'd imagine.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[KootK]

One more request for KootWare…..please pull back the curtain and show the user line by line calcs…..no blackbox stuff.

Agreed, this is how I would want it to be as well. Although, when one gets into the meat of it, I suspect that there are some good reasons why developers short change this at times. One thing I've wrestled with is how to handle output as it pertains to load casing. If you do it by hand, you'll probably just go detailed on the governing load case and have a few pages. Software, on the other hand, is kind of built to give you detailed output for ALL load cases which might be excessive. Taking a cue from RISA etc, I'm thinking that somewhere along the line the user would review the summary results and then select certain load cases for detailed printing. Semi-automated.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[TLHS]

Okay, so you have to include an API structural module and a module for the design of horse hitching posts to make sure you can target the Texas market.

 

[glass99]

KootK - I also strongly recommend you make software that doesn't already exist. If its just like TEDD but a bit better or something, its tough. In my glass world, MEPLA was launched relatively recently as a small enterprise and is doing well bc there was no good software for glass panel analysis prior.

 

[TLHS]

Obviously not the focus of most people in this thread, but Canadian TEDDs doesn't exist. Toolsets are a bit of a hack job up here. Major vendors tend to support our codes to some degree, but if you want smaller toolsets you kind of have to do your own awkward code verifications or make your own tools.

So in the home market up here, there's a hole in the solutions available.

 

[TLHS]

You know what, I lied. Canadian TEDDs does exist. I didn't at some point when I wanted it many years ago. It's more limited, but it's there.

 

[Agent666]

Here's a local example of a similar pay as you go service. More of a tool for someone wanting an engineer for residential construction but not wanting to wait round for them for 5 weeks when they are free to do it. Their clients do their own design essentially and it's verified by an engineer (presumably) within 2 days, with an aim to streamlining the overall design process for the client.

But highlighting a few things, taken years to get to this point based on their testimonials, taken a lot of time/money investment to develop it, and I don't know anyone who uses it, or how much business they are doing through it.

I think to determine the pricing structure you really need to know your initial and ongoing development costs which hasn't been covered. I note there is lots of talk about it being easy, etc. I'd say it'll be harder (and more expensive) than expected, this is just life, I'm a cynical bastard, otherwise known as a realist.

Thinking back to how much it's cost in terms of time to develop some of the simpler spreadsheets I'd developed for the last place I worked some of them easily added up to 80+ hours of work (typical seismic coefficient, wind pressures, beam design type of thing). Coming up with something quick and dirty and specific for your own personal use is much less time obviously, making something generic with all the fringe cases covered and making it ready for prime time and use by the masses requires a lot more development and verification. I have no problem with awesome, but awesome can be expensive to perfect.

I half think while most other software is expensive for what it is, and some are no doubt milking it, but it can be expensive to develop and provide ongoing development and support for software.

So you need a handle on this longer term model to understand what cost to clients might be. I get the impression so far its more been about determining how much can clients be willing to part with versus how much do you need to charge them to make it work knowing your upfront and ongoing costs. Million dollar questions hinge on the level of uptake for it to be viable. You'll only get this feedback after investing quite a few dollars up front in the initial development (many times more than you might bring in while uptake is rising up to a point where you break even).

Being a cynic, leads me to believe if it were a viable model then why isn't/hasn't someone done it already? I see a lot of the more basic things you say will potentially be free as not that much of a carrot to users as they tend to have these tools already (a spreadsheet, another program, etc) that does the same thing.

Sure people will try them out, but I'm not seeing that being that attractive to me personally. I'd look at it, if you were doing something cool that I thought was a good idea, I'd look at adapting my own tools to do the same.

 

[TLHS]

That new zealand thing is terrifying. In my mind, the value of engineering is not reviewing numbers, it's holistically understanding a situation and providing a safe and economical solution. If you put the engineer in a box and don't allow them to actually gather information or review a situation then it's not engineering. They even let users qualify as site inspectors. So even the jurisdiction's inspection controls don't ensure that the engineer has fully reviewed.

Realistically, there's a bunch of engineering where practitioners already do this kind of thing. They get sent a specific request defined by someone else and spit out an answer without ever seeing the whole picture. I just don't really like it as a concept.

I'd need to look more into this, because depending on how they do the 'check' it could be more of a uniform way of providing preliminary engineering and a standardized problem definition to the engineer. That might be clever. However, from what I've seen in similar services the 'check' is likely not significant.

 

[Agent666]

Im not associated with them in any way, but the engineering practice behind it are considered a reputable company here. The residential design market over here is a race to the bottom. This exemplifies this aspect I guess.

I share many of the same views as you TLHS, I think in a way 90% of it will be simple and replicate what an engineer would have done anyway, it'll be constrained to potentially conservative options. Most of the engineers doing this type of work are simple folk who can just design simply supported beams all day long. If you've got something more complex no doubt it'll be flagged for specific engineering design either as part of the online design process or during the verification process, at which point they've locked them in as a client no doubt and they already have the info they need. That parts quite cunning and a good avenue for generating work I thought.

Over here we have a standard set of solutions for non specific engineering design for wood construction. Even an architect can fully design the structure, it's bracing, beams, foundations, etc without even involving an engineer, provided it meets all the relevant criteria for doing so.

I think if it got more traction more of the engineering community would be worried over here. From what I can see some of the local councils have eaten it up though.

 

[KootK]

KootK - I also strongly recommend you make software that doesn't already exist.

I appreciate the advice and, without doubt, there's no better business model than the monopoly. That's not what I've got in mind however. Come hell or high water, my goal is to:

1) Not create something that is unique but, rather;

2) Attempt to do an extraordinary job of something relatively common.

I think to determine the pricing structure you really need to know your initial and ongoing development costs which hasn't been covered.

I see the logic in this, of course, from a business perspective. However, I can't envision any way that I'll be able to reasonably estimate my development costs with any accuracy except post-hoc, once I'm in the thick of it. If I do this, it will require a fairly substantial leap of faith. This statement of yours will be the thing and is part of why I favor a tool by tool build-up of the suite. If I can start small and guage how things are performing, I feel that I can mitigate my risk some. Although, perhaps that is to fail to go big or go home.

You'll only get this feedback after investing quite a few dollars up front in the initial development (many times more than you might bring in while uptake is rising up to a point where you break even).

I'd look at it, if you were doing something cool that I thought was a good idea, I'd look at adapting my own tools to do the same.

I've anticipated this...

I see my sweet spot as being spreadsheets that you almost certainly could make yourself but will almost never have the time to get around to actually making yourself. And I think this makes some intuitive sense. Something requiring that much effort probably only makes sense if it's being used by a larger pool of people.

Obviously, where the "I'll just do it myself" threshold is will be different for everyone based on their proclivities and situation.

I see a lot of the more basic things you say will potentially be free as not that much of a carrot to users as they tend to have these tools already (a spreadsheet, another program, etc) that does the same thing.

I don't entirely agree with this. And it's surely a function of my recent experience as a startup consulting firm. When you're at a large firm, you absolutely do have great tools in place and they need to be used for quality control and standardization. As a startup, however, I often find myself in need of fairly simple tools and having no hope in hell of having the time to create them myself over the timescale that I need the problem solved.

I note there is lots of talk about it being easy, etc. I'd say it'll be harder (and more expensive) than expected, this is just life, I'm a cynical bastard, otherwise known as a realist.

I appreciate the cynicism and, frankly, that is the most important thing that I need to glean from this thread. I am not and have never been under the impression that this would be easy however. Rather, I'm attracted to the challenge, in part, because it will be hard. You'd need to know a bit more about my situation to sympathize with this however.

You're probably familiar with the concept of "flow" as it pertains to one's work. You know, that mythical state of zen wherein you're a production god and the act of producing is almost creating energy within you rather than consuming it. Structural engineering means a great deal to me but, even so, I've never really experienced any of this "flow" stuff in any significant measure while practicing structural engineering. In fact, for the first five years of my working life, I didn't even believe in "flow". I thought that it was new age BS. Then, one year, I took on a significant database development project. And then, out of nowhere, there was flow. One of the difficulties that I experienced while coding, truly, was that I would forget to eat. Hours would just melt away.

I really have no idea why coding puts me in the zone. I just know that it does. Perhaps my thinking is very mechanical in a way that suits this activity. Unfortunately for me, however, the flow tends to wear off if I'm working on something that holds no personal meaning for me. Coding a database to manage inventory at Kia's new warehouse just isn't going to get me there. Which is why I need to marry the flow that I get from coding with the meaning that I get from structural engineering somehow. In summary, the effort part isn't a great worry to me.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[KootK]

With regard to the question of "what the market lacks", my primary hope stems from the fact that the market currently does not have anything to offer that I personally find satisfactory. For me, everything out there has at least one of the following deficiencies:

1) Too expensive.

2) Forces me to buy a lot when I only want a little.

3) Requires an installation on my computer which I've come to find off-putting (me thing mostly, I'm sure).

4) Does not allow me to share the tool conveniently with remote colleagues.

5) Tools not built with production office needs well considered.

6) Black boxy output.

7) Forces me to take on another monthly financial commitment which I rail against.

8) Isn't elegant enough that it brings joy to my heart to use it (like my HP48).

So I'm really making something with myself in mind as the target audience and hoping that others feel the same.

One example that irks me is that of retaining wall design software. After two decades of having options available for retaining wall design software, there still isn't anything out there for this simple task that I feel really knocks it out of the park. ASDIP seems to me to be the nearest contender at the moment. Retain Pro is powerful but not nearly elegant enough in its current incarnation for my liking.



HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235

 

[Denial]

KootK,

Good luck with this most worthy endeavour.

I cannot offer any suggestions regarding your various possible business models.[&nbsp;] When I semi-retired I decided I wanted to offer downloadable spreadsheets as an interest and as a minor source of income.[&nbsp;] But when I tried to find a relatively hacker-proof way to make spreadsheets non-pirate-able it looked all too hard, or all too expensive for a small setup like I envisaged, to cover the costs involved.

Unlike you, I was at the end of my active career.[&nbsp;] This meant that while I would have liked a bit of income I did not need it:[&nbsp;] the financial opportunity cost of my labour was effectively zero (not that my partner saw things that way).[&nbsp;] I had the further advantage that each spreadsheet would be a self-contained unit, and so there was no overall "critical mass" that my endeavours would have to meet before they would be fully effective.[&nbsp;] Thus I was able to put my offerings in the public domain, and put them there at whatever pace I chose.

Even so, I had significantly underestimated the amount of effort required to make my offerings adequately user-friendly, so that a user (coming in completely cold) could readily see what the spreadsheet would do and how to get it to do it. The offerings also need to anticipate and handle the sorts of errors that a user might make. I haven't got there yet:[&nbsp;] I suspect that I never will get there, and as a result I will be forever be devoting time to fine-tuning things. That is fine if one's software is a "labour of love", but it needs to be anticipated and allowed for in any budgetary considerations.

The last two paragraphs of your 03Aug19@18:22 post struck a very strong chord with me.[&nbsp;] With that sort of tail wind behind you your chances of success are massively increased.[&nbsp;] Happy sailing.

 

[Celt83]

To echo Denial the last paragraphs in your 03Aug19@18:22 post struck a chord.

I have been following along with the updates on this thread. So as not to betray my post history I must ask Why not an open source model?

I think the true break the mold model is a set of engineering tools made by engineers for engineers governed by engineers with the option for free back stage passes to really see how things are being done and the ability to dip a toe in and help out if you can or if you want to devote the time to learn to do so.

Obviously the open source approach puts a damper on the monetary return or at least that is the immediate impression but seems to me some people are sick of the black box and shelling out hundreds/thousands for software that ultimately contains design breaking bugs, bad support, little if any updates over a previous version, etc. I think a small percentage of those people would donate a couple dollars if presented a capable alternative.

An example of a what I would call a smaller "successful" open source project is Krita there are a handful of primary passionate developers on that project. They saw a need for a program to cater to digital artist in a way that the base paint program in the KDE desktop environment didn't and have built it into a financially sustainable and successful project. Granted it took time to get there and is sustained on a donation model and some support from the KDE base.

In the US I could see AISC and the American Wood Council getting behind an open source project, I don't see ASCE, ACI, or the International Code Council having any interest in offering any support to an open source project just judging based on how those groups handle access to information currently. I think our industry, really ever industry, as a whole has a lot of "I should get mine" attitude but that is a topic for another thread.

I don't intend to derail the purpose of this discussion as I get it if you are going to devote the time and resources to this type of thing why shouldn't you get paid at least cost + a little bit for your efforts, but I am still relatively young and naive.

Edit: So that is the long way of saying my opinion on the best pricing model is "free as in beer"



Open Source Structural Applications:

https://github.com/buddyd16/Structural-Engineering

 

[KootK]

But when I tried to find a relatively hacker-proof way to make spreadsheets non-pirate-able it looked all too hard, or all too expensive for a small setup like I envisaged, to cover the costs involved.

Thank you so much for your input. I suppose that I should have mentioned this as one of the reasons that I'm targeting a web based application delivery platform. I really know of no robust way to make tools pirate-proof otherwise. Much, much more substantial entities than I seem to have had little success at that. RISA's probably been the most successful in this regard.

The last two paragraphs of your 03Aug19@18:22 post struck a very strong chord with me.

Birds of a feather in this respect it would seem.

Even so, I had significantly underestimated the amount of effort required to make my offerings adequately...

I've become loosely familiar with what you've done over the years. You've taken upon yourself to provide tools for some very complex problems. Personal finance issues aside, I feel that it's right to look at the scale of such efforts and ask how much usage justifies that effort? When a thing of beauty and power is built by a man's labor, societal justice demands that the benefit that society derives from that thing be in proportion to the effort and skill that went into the creation of it. Money Schmoney. I worry about this for your tools as I will for mine.

If I recall correctly, you've got an exceptional tool that analyzes near-arbitrary concrete beam-column sections for biaxial moment. How many useful "runs" does that need to see out in the wild before use justifies creation? It would take more than one engineer satisfying his own project needs, certainly. I'd argue that even firm wide use by single firm would be not be enough. So, in this respect, I feel that such tools must be successfully distributed for the bargain to have been a fair one.

I suspect that I never will get there, and as a result I will be forever be devoting time to fine-tuning things.

As I mentioned somewhere above, one of my goals is to act as a sort of repository for tools already developed by others. And I've no real motive there other than to see that the creations of other like minded folks not fade away into the ether unnecessarily. It just seems too much of a waste to let that happen and to reinvent things that have already been invented. So, please, if your labor of love someday ceases to be so, find a way to bequeath your stuff to somebody. Given enough time, my platform might be able to serve that function but, even if not, find some new home for your creations. Hopefully a home that returns some modest royalties at least.

HELP! I'd like your help with a thread that I was forced to move to the business issues section where it will surely be seen by next to nobody that matters to me:

http://www.eng-tips.com/viewthread.cfm?qid=456235