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(Scary Outer Limits voiceover) “Imagine if you will, a sensible B2C executive planning a foray onto the internet to sell ballet clothes to animals….”

Well, not exactly, but take that as an example. We had a longtime partner in our offices explaining why the worldwide market for dog tutu’s was easily capturable via e-commerce and judicious SEO.

Look, his logic was impeccable - 300M Americans (20% of the world population), 100M dog owners, etc, etc. The old 1% of a big market argument.

He wanted to invest in the real world infrastructure/delivery/product and we’d supply IT/development/etc. And we’d bathe in the bucks as they rolled in.

We politely demurred but offered him “at cost” resources for a piece of the pie plus IP on the delivered product. I’m pretty sure it’ll flop, but we will come out of it with some new tricks and code, so no harm to us. We will see what they decide to do.

What does “at cost” mean to us? Good question. And no trickery involved.

Say our loaded cost for one engineer is $100/hour ($200K/year). And a bonus of 20% expected - $120/hour (ok, bad math, sue me, it is good enough for back-of-envelope stuff). So we charge clients that for pay-for-hire work where we don’t want to invest for interesting ownership.

That spackles over the cracks in our internal projects so that everyone makes good bonus and cashflow covers payroll AND bumps up cash-on-hand.

Win-Win.

Stay tuned for your chance to buy doggie ballet gear!