Item — HN Reader

I thought the article was spot on except for two comments:

> Keep track of all your development and protection costs to help you put a value on your IP

No. McDonalds doesn't price its cheeseburger based on how much it costs but on how much a consumer would be willing to spend on it. That's a huge difference. How much you've worked and spent is meaningless in terms of the end value. The only question is how much would others value it.

And second, it doesn't clarify enough that inventors almost never make money on their inventions. The person who brings it to market makes all the money. Are Bill Gates and Steve Jobs inventors? Exactly.

1 comments

Speaking as someone who just decided to try and see their first software idea to market, I actually found that particular comment in the article helpful, though not in the way I think they intended.

So I have an idea for a software. Let's say the awesome happens and, at some point of time T in the development cycle, someone wants to buy my company/idea/etc. How much is a fair asking price for my time, energy, ideas, etc.? Well, a good starting place would be the amount of fiscal and temporal resources already invested, plus some amount.

Now, I can't speak generally, but tend to be HORRIBLE at estimating hours or money invested in something after the fact. So tracking development costs makes sense to me, if for no other reason than it will give me an idea of how deep I'm into the project if I ever get to the point of negotiating financial issues with an outside party.