jason stoddard said:

  Chapter 4: 
“You Always Say You Have Schiit to Do, Why Don’t You Just Call It That?”
...  
Interlude: Let’s pause for a moment to salute open-source software. Who would have ever expected that Microsoft would have been routed by open source? Who would have predicted that open-source is what powers most of the internet? Who would have known that there would be opportunity created all over the internet by software like Linux, Wordpress, Drupal, Joomla, and a hundred others? 
 
Just consider Google. Google gives away things like Android, Gmail, Google Apps for Business, Google Drive, and plays with crazy stuff like self-driving cars and longevity enhancement. But Google is really an ad company. Yep. That’s how they make their money. They sell ads. Their ads show up everywhere—unobtrusive text ads in search and on websites, or banners served up on millions of sites across the desktop and mobile world. And those ads drive the free software that billions of people use. Pretty amazing business model.
 
But, back to the free software? Sure, why not give it a try.
 
Most free stuff isn’t very well worked out, and crashes a lot, but Kicad was pretty full-featured and stable. It was missing some very standard features (like cut and paste! And undo!) Still, I’d worked with inconvenient software before, some of it very expensive (I’m looking at you, Photoshop 2.5.) I decided that Kicad was good enough to use for the first layouts.  
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Well, yes, there you hit on something I must comment on.

 
<Rant> <Soapbox>
 
The history of what you call free software is a bit more complex. And the words "free software" really weren't intended to imply no-cost software - it really means that open source software code must remain available to users to review, modify, improve, and redistribute. Open source vendors are perfectly free to charge for their software, or support for their software (can you say Red Hat Linux?). And open source isn't necessarily the best choice. You really do get what you pay for. Or as my Econ 101 teacher might have said, "There's no such thing as a free lunch." Linux, after all, was someone's homework, that has turned into an urban legend of sorts. And Google has turned Linux into their own OS that - guess what - they make money selling. Lots of money. App Store? So much for free software.
 
You found a piece of software that worked for you and helped you create your company. Not faulting any of that, so please don't take this diatribe as a critique of Schiit in any way. I am commenting on the concept of what is commonly considered "free software."
 
I've spent many years using many, many software products, both open source and proprietary. Open source software relies on the effort of software developers acting on their own free will, on their own time, with their own resources, out of the kindness of their hearts, using their own skill, expertise (maybe), and ethics (if any), to produce what people call "free software." It's really not free - someone paid to create it, with their own effort, their own personal computers, electricity bills they pay, computers they purchased, and so forth.
 
I also spent many years making my own software. Yep, I'm a former shareware author. Back in the mid 90's, I spent a handful of years making software, all by myself, and putting it out there on the Internet. I started out releasing free stuff. I learned that you can't make money giving things away, because people just won't pay for stuff you give away for free. In the end, my shareware business never made more than a few thousand dollars a year, but it got me a real paying job. One day I was hired into a big software company, on the reputation of the shareware I had created. So, in the end, I didn't become the next Internet whiz kid - but I got a darn good job.
 
Today, it is my belief that this is what drives most people to continue to create open source software: they hope they'll get hired by a real company to make proprietary software, that people actually pay for. Most Software Engineers don't end up inventing the next Facebook. There are about a million of us, if you believe the government reports. We bust our butts to make your computers do productive things. There is a tremendous amount of Software Piracy out there in the world. Yeah, more than half of people don't want to pay for software, so they steal it. What's the result? Lost jobs. Businesses can't pay programmers to create software, if they can't get paid.
 
That's the real issue: getting paid to make software. You don't go to a Dentist and expect them to clean your teeth for free, do free root canals, or throw a few gold crowns in your mouth, out of the kindness of their hearts. Try getting a plumber to unclog your toilet for free. Try getting a car repaired for free. Why should you expect people to make you free software? Why is there this prevalent notion that computers should just do what you want, for free? Why should software engineers toil and labor over their products, only to have most of the world steal their work, or expect them to make it for free?
 
Software is hard to make. It takes a long time to learn how to do it right, just like it took you a while to learn Electrical Engineering. Software Engineering is no different. And there is a wide variety of skill levels out there - some people really shouldn't be Software Engineers. In my opinion, there really should be a licensing exam. If the industry insisted on a minimum level of competence, we'd have better software, fewer bugs, and fewer opportunities for hackers to break into things like Target, etc.
 
I also spent most of a decade teaching Software Engineering at the collegiate level. So, yeah, I tend to be a little passionate on this particular subject I didn't teach for free, either.
 
Microsoft hasn't been "routed" by open source. Last time I checked, they still had a viable business, despite the best efforts of the morons in charge of the company to screw it up. Heck, even IIS still holds nearly 20% of the web server market, and that amazes me. But Apache has always been out front. That's an amazing product. I've set up Apache web servers, and they are absolutely amazing.
 
Some of the folks at M$ are still operating on the idea that they're the only game in town. To some extent, they are, because there are plenty of businesses who refuse to bet their businesses on open source. There is some logic in that: how do you rely on software built by someone you don't know, that gave it to you "for free", who may one day decide they don't care to support Product X? You can't. Really, it's a dangerous bet. So, Microsoft survives, and probably will, for a long time to come.
 
Bill Gates created a product that has produced millions of jobs for people all over the world (myself included), and supplied technology to quite literally billions of people. Yeah, he was at the right place, at the right time, with the right product, and he sure did hit the lottery. Think of him what you will, but there are lots of people making a good living today, thanks to this man. And his stuff isn't free.
 
So. Yeah. If you're using a computer, someone put time and effort into making software that runs it. The best software isn't free. Nobody is putting food on my table for free. I have to buy it.
 
</Rant> </Soapbox>
 
That being said, I am happy for Schiit. Really. I am and will remain a customer.
 
-U.

Minor niggle to your argument, google doesn't make money "selling" android. They give it away essentially for free to hardware manufacturers in the hope they will make money serving ads to the users of said OS.

souprknowva said:

Minor niggle to your argument, google doesn't make money "selling" android. They give it away essentially for free to hardware manufacturers in the hope they will make money serving ads to the users of said OS.

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Well, heh, they're making a crapton of money selling apps. The platform might be free, but it's being adopted at a blindingly fast rate, and you will pay 99 cents to several dollars, any time you want a "paid app".
 
I have a couple android tablets. Yeah, you can run some things for free, but they really push the paid stuff. Seriously, you need an account to do anything, and you can't even watch what I'd consider "free" tv shows on the things, without paying for them.
 
This is the Gillette razor business model: Give them the razors for free, but sell them the blades. If you don't think they're making money, you're mistaken my friend  

I've existed in the Android sphere of influence for about 4 years now without spending a dime on apps, etc. Only electronic things I've bought are Kindle books.

maxvla said:

I've existed in the Android sphere of influence for about 4 years now without spending a dime on apps, etc. Only electronic things I've bought are Kindle books.

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I didn't have a Google Play account till one and a half years in..

No offense UmustBKidn, but i will respectfully have to disagree. Overall I would argue that google has lost quite a bit of money on android so far. The argument that they are making a ton of money selling apps is just outright false, not even apple is making much money selling apps, and the purchase rate of paid apps in the app store is significantly higher than in the play store. People on android just don't pay for apps in any significant percentage, they all just use free ones. As for the blindingly fast rate of adoption, most of the android phones sold are phones being used as feature phones that are sold in other countries besides our own that run bottom basement quality hardware that can't effectively run apps well anyways. once you add all that together, then throw in the massive loss they took on motorola(which was obviously purchased for android) they have lost millions. Heck, even microsoft has made more from android phones being sold than google has due to licensing costs from several of the android manufacturers.
 
The only company really making money on android is Samsung and that is just cause they did the best job ripping off apple, which honestly was a good decision since it only cost them 1 billion in court after the lawsuit and they made much more than that selling phones.
 
to bring this back on topic, i think Jason's point wasn't that the software didn't cost anybody anything, i think it was more that he was impressed that people were actually willing to put all that time into making awesome free software that people don't have to pay for.

You might be surprised to see the adoption rate of hi-end Android devices compared to low end devices.

gikigill said:

You might be surprised to see the adoption rate of hi-end Android devices compared to low end devices.

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Haha I wouldn't be, I'm sorry. The average selling price of android devices is just above 270 bucks, the average selling price of iPhones is over 650. So no, I high end android devices aren't a significant percentage of android sales at all

Edit: And again, google doesn't make money off hardware sales. And I don't know what you're using as a source for your info, but anecdotal evidence doesn't mean much in the big picture.

souprknowva said:

  No offense UmustBKidn, but i will respectfully have to disagree. Overall I would argue that google has lost quite a bit of money on android so far. The argument that they are making a ton of money selling apps is just outright false, not even apple is making much money selling apps, and the purchase rate of paid apps in the app store is significantly higher than in the play store. People on android just don't pay for apps in any significant percentage, they all just use free ones. As for the blindingly fast rate of adoption, most of the android phones sold are phones being used as feature phones that are sold in other countries besides our own that run bottom basement quality hardware that can't effectively run apps well anyways. once you add all that together, then throw in the massive loss they took on motorola(which was obviously purchased for android) they have lost millions. Heck, even microsoft has made more from android phones being sold than google has due to licensing costs from several of the android manufacturers.
 
The only company really making money on android is Samsung and that is just cause they did the best job ripping off apple, which honestly was a good decision since it only cost them 1 billion in court after the lawsuit and they made much more than that selling phones.
 
to bring this back on topic, i think Jason's point wasn't that the software didn't cost anybody anything, i think it was more that he was impressed that people were actually willing to put all that time into making awesome free software that people don't have to pay for.

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No offense taken. I am a firm believer in discussing or debating, even passionately, without personal attack. I think I was pretty careful to remain civil. I hope it came across that way. I really, really like Schiit, and I am sure if I ever met Jason or Mike in person, I would like them both. I'm still hoping to make the So Cal meet in March (and I think Jason is going to be there), but I might have to work that weekend. Honestly, I thought twice before posting that diatribe, because I was concerned about it being taken the right way.
 
Anyway, I searched a bit and discovered that apparently Google has just sold Motorola to Lenovo for $3 billion (after spending nearly $13 billion for it in 2012). Wow. I can't imagine losing Nine.Billion.Dollars. Whew. Wheeeew. I really can't wrap my head around that much money, down the drain.
 
I also found this article on Forbes, that seems to indicate that Google has paid out $900 million ($900,000,000) to app developers (that's not profit, that's royalties) over the previous 12 months (the article is dated August 2013). That's the result of over 48 billion (48,000,000,000) downloads (it doesn't specify how many of those were paid). So I'm not sure how you define "making a ton of money", but that sure seems like a lot to me. Apple surely does make more. But I don't think Google is in the poor house. They can afford to lose 9 billion clams on Motorola, without blinking.
 
And yes, on topic, I agree with your last point. There were a few things said that impressed me as needing clarification, let's just put it that way. As a man who makes his living selling software, it's an important issue to me. I also spent years trying to make my own software business run, and I know how hard it is to make money. People really don't want to pay for software unless they need to. They're willing to pay for hardware, sure. But somehow, software gets the short end of the stick. Unless you can find a niche, it's like anything else - lots of businesses fail. Fewer succeed. Which makes the Schiit story just that much more impressive.

I would imagine the majority of free apps particularly the games allow for in app purchases all those $0.99 can add up substantially.

I thought this was a Schiit Happened thread.

This whole off-topic rambling reminds me why I buy almost all of my gear from small (ish), boutique businesses, such as Grado, Mr Speakers, and now that I finally own an Uber- Shiit.

umustbkidn said:

...Anyway, I searched a bit and discovered that apparently Google has just sold Motorola to Lenovo for $3 billion (after spending nearly $13 billion for it in 2012). Wow. I can't imagine losing Nine.Billion.Dollars. Whew. Wheeeew. I really can't wrap my head around that much money, down the drain. ...

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Google were quite happy with the deal. They bought Motorola for their patents, and sold on the hardware part of the business.

maxvla said:

I've existed in the Android sphere of influence for about 4 years now without spending a dime on apps, etc. Only electronic things I've bought are Kindle books.

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Same here...don't need to.  Have always been able to find a decent free app to accomplish what I want on my Samsung Phone or Tablet.
 
FWIW, a little 'Googling'     reveals
 
that they still make over 90% of their revenue from Ads.  That segment of their revenue stream is growing at a healthy 15% and while the non-Ad revenue is growing at a faster percentage clip, that's somewhat misleading given it's such a small percentage of their total revenues.

don hills said:

   
Google were quite happy with the deal. They bought Motorola for their patents, and sold on the hardware part of the business.

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This. I don't think Google had any regrets.