You might remember a post I wrote back in August about selling xPad. It didn't turn out as planned, and I want to talk about it here for a moment because I think it's important for everyone to know what happened.
I sold the application and all related files, source and rights to Brian Ball of macZOT. Here are the simple details of the contract:
- He agreed to pay me a total of $5,520 USD all rights and materials (including the website)
- I agreed to consult (without developing code) on the project for a minimum of 50 non-scheduled hours over the period of 12 months
- We agreed to monthly payment terms—since he didn't want to pay completely up front—which involved a two-month initial payment and then payments of $460 per month for 10 additional months
- I also agreed not to create, distribute or pitch a product that directly competed with xPad for 12 months
The contract was fully signed and executed on August 3, 2006 and I immediately prepared and transfered all materials to Mr. Ball, who paid the initial amount in full. Mr. Ball got the website hosted and began distributing xPad shortly after, as well as including it in several macZOT packages/sales.
In September, Mr. Ball paid the monthly amount on time. In October, however, he did not. I sent several reminders but received no response. In fact, I sent at least three emails and three PayPal invoice reminders, as well as several instant messages, and Mr. Ball never responded. On October 9, I reminded Mr. Ball via email that the terms of the contract noted that payments sent after the 10th of the month would be considered late and would involve a late fee. He responded via instant message that he wanted to "explore a couple of things" with me, but signed off before I responded.
Then, on October 10, after only paying one month of the 10-month due, Mr. Ball wrote the following to me via email:
Here's where we're at in our process:
- We did a Universal Binary upgrade for xPad and ported the site into symfony for php 5.
- We had a plan to use xPad as a bundled app with developers but based on our current cash / human resource position, we've decided to lower the priority of that to near zero.
- The direct sales of xPad both via getxpad.com and a couple of other channels we managed resulted in sales that don't warrant any further man-hours on the deal.
- The fact that you already made $1,300 or so on the deal doesn't make me feel too bad considering I think you way over-valued it on the front end, and is more than you would have made through sales.
- I think a good option might be to either find a developer who wants to adopt it (and I could help with that) or just let it be with no further updates.
However, as a business (and I apologize for the delay in getting this to you, it was under a stack of other urgencies) we cannot warrant paying the $460 maintenance to own this IP.
If you'd be interested in re-negotiating, having us help find a developer to adopt it, and or other ideas to proceed, I'd be interested in talking about them.
Anyway, let's see if we can't figure out a better position on this, but I just cannot throw more cash at it.
Basically, Mr. Ball decided he didn't want xPad any longer, and wasn't going to pay for it. However, he continued to sell the product. In fact, I did not regain control of the domain until November 25, which means Mr. Ball was selling my product for over a month after he defaulted on a contract.
As as far as me "over-valuing" the product goes—Mr. Ball and I spoke at length about the exact value of the product and I made it completely clear that there was no way to give a true estimation. I did zero advertising for xPad since the day I launched it, and I didn't update it more than once in 3 years, but it was still selling. I made it clear to Mr. Ball that he could make money from xPad, but that he would have to put some work into it first. He said he understood this, and that he was going to hire a developer to do work on the app (he did—Juan Alvarez of Midnight Apps).
At the same time, I don't have to justify what I valued xPad at, and I certainly didn't over value it. $5,520 for xPad and all materials is not over-valued, especially when you consider that at $10/license, that's only 500 sales to make up the difference (which of course doesn't include all the value of the actual app itself, the source code, the design, the QA, the work, the website, the icons, the logos, the built-in customer base, all of which is good and valuable stuff). Believe you me: I sold more than 500 copies of xPad without ever advertising it (except on my own site) and without ever updating it. There was plenty of money to be made if someone had the time/energy.
It was up to Mr. Ball to determine whether or not he felt $5,520 was an accurate price to pay and apparently he felt it was because he agreed to it and signed the contract. But only one month later, he stopped paying.
So, how did he do it? He exploited a clause in the contract that I put in place to protect me from potential default. The contract stipulated:
If the buyer fails to make a payment after 90 days, this contract shall be void and terminated at which point all
rights and license will revert back to the seller. At such a time, the buyer will no longer have rights to publish or use any of
the materials covered in this contract. No refund will be made to the buyer.
In hindsight, this wasn't the best way to protect myself, and it was a bad move on my part. Consider me too kind. I didn't want to write "buyer must pay balance," because I didn't want to make it an unfair situation. Instead, Mr. Ball used this as a simple way to get out of this agreement. He simply stopped paying, stopped responding to emails, and kept selling the product. Eventually, in late November, he finally transferred the domain back to me and xPad became mine again.
What does this all mean? It means I'm extremely disappointed with the completely unprofessional behavior of Brian Ball and macZOT. I do not appreciate his actions or his attitude and I feel it's my responsibility to apologize to xPad users for this situation. I also feel it's important for people to know what kind of business Mr. Ball conducted with me, in case people have potential business with him in the future. Consider this fair warning that things might not go too well.
From this point on, xPad is freeware. I have refunded any purchases made since I regained the domain in November, updated the site to remove purchasing options and released a license code for anyone to use. In the near future, I'll be releasing the full source code under GPL for people to play with, improve, et cetera.
I genuinely appreciate all the feedback and support and praise the community sent me over the years. I'm sorry if this situation negatively impacted anyone and I'm really frustrated and disappointed with the way Mr. Ball handled everything. I also want to thank everyone who purchased xPad over the years—you guys made it all worthwhile.
Update: For more information, you should see the comments in the Digg entry for this post, as well as a follow-up I posted.
