Ethics in Business

Published on Friday, February 13, 2004 By Brad Wardell In Business

Stardock is a very profitable company. But I hate to say it, but we could be immensely more profitable than we are if we were just willing to do things we don't think people would like.

For instance, our site, WinCustomize, is the world's most popular skin site.  But it loses money every month. It doesn't even come close to paying for itself. At the same time, it has to compete against websites whose skins install spyware. Needless to say, they make a lot more money than us.

Occasionally we get offers from companies to pay us 10 to 15 cents per installation of our freeware and shareware programs if we agree to also install their software. Their software being spyware of various types.  Oh, how could anyone be tempted to do that?  Well, last week our software got 167,000 downloads just on Download.com (not counting other places).  That would be (if we use the 10 cent figure) $16,700 per week.  Let's say it was only $15,000 for easier math, that's roughly $60,000 per month. $780,000 per year.  Gets a bit more tempting then.

But we decline those offers. 

A lot of people speak of holding principles, but it gets a lot tougher to uphold those principles when "Big money" is put in front of you.  Principles, they say, are a luxury. Perhaps so. We're already profitable. How would things be if it were a choice between laying 8 people off or doing the sort of thing I mention above? 8 people with families to take care of.  I suspect it would be a lot tougher then.

But still, even now we find ourselves regularly competing on an unequal playing field.  We have one competitor who installs a MacOS X skin as their default skin complete with Apple's trademark as part of the skin.  The graphics themselves appear to have been lifted right from MacOS X 10.3.  On the other hand, the skins we include with our software are created by skin authors.  We include a Mac classic skin because Apple's legal gave us the okay on that -- but we made it ourselves, we didn't go and copy the resource bitmaps from MacOS 9 or something. Not including a MacOS X skin puts us at a disadvantage but we're trying to abide by Apple's wishes. It's their stuff.  Still, I wonder how many sales we lose each year because of that decision? I wonder how many sales our competitor gets at our expense because they can claim their software will make "Windows look like a Mac" upon install?

Another example, we're putting together a desktop aquarium. Our animators got the models from a website in Japan. Now, realistically, we could in all likelihood just use those make new models that are derivative and create new graphics and no one would ever know. But instead we contacted the author and put together a contract in which we pay him thousands of dollars, up front, to use his models. Why? Because it's the right thing to do. It's as simple as that.

But again, in the real business world, such actions put us at a competitive disadvantage. Many companies only worry about whether something is legal as opposed to whether it's moral. We have a company suing us right now to force us to let them use the files generated by one of our programs. Files we created. They want to use them so that they can compete against us.  Forget for a moment whether such an action is legal, I can't see how anyone can say it's moral.

But that's how so many businesses we run into operate, the only question is whether it's legal. And if it's not legal, they just ask themselves if they can get away with it?  I've been asked over the years why we play so straight and narrow? Why do we operate so transparently? Someone usually presupposes, "Do you do it so that you can look at yourself in the mirror?"  No. That's not why we do it.  I guess you could say I believe in the power of projection. That we simply operate in a way that we wish everyone else operated. And maybe, just maybe in some small way others will see our success and see that they don't have to go into that gray area to succeed.

Still, $700,000 to $1 million more in revenue -- revenue that would go straight to the bottom line, would be nice. And all we'd need to do is install spyware. And heck, while we were doing that, we could have all our skins and themes that are downloaded from our sites do the same thing, get that amount up to 2 or 3 million dollars per year. 

But you know what? I'd rather be part of the way things should be. Even if other companies don't necessarily operate that way.