FW: Revenue Share proposal

Shuklendu,

I was lucky to find the following exchange of emails between us !

I stand by our understanding of sharing the Net Revenue ( after deducting out-of-pocket expenses / eg; Netcore charges ) , in the ratio of 75:25 between 3P Consultants and Sentient Systems

hcp

From: Hemen Parekh
Sent: Tuesday, May 07, 2013 5:45 PM
To: shuklendu.baji@sentientsystems.net
Cc: NHP
Subject: Revenue Share proposal

Shuklendu

Earlier today , Kailas forwarded to me your following email proposal :

 From: Shuklendu Baji - Sentient Systems [mailto:shuklendu.baji@sentientsystems.net]
Sent: 05 May 2013 22:38
To: 'hcp@RecruitGuru.com'
Subject: Apps Development - Arrangement

Hello,

You have been asking me to give my thoughts on what arrangements we can have for future apps and software developments, apart from maintenance of www.customizeresume.com.

I have considered following aspects of the engagement. We will be

1.     Responsible for software development

2.     Contributing our ideas to the design / functionality of the app / software

3.     Looking after technical support

4.     Sharing business risks

Considering these, i feel 25% will be fair share. The share should continue till the life-time of the software, since we will be contributing our resources up-front, in a partnership mode. RecruitGuru’s share will be 75%.

The current arrangement of Maintenance Contract for the web site will continue. Any changes required in the web site due this new development of apps/software will be covered in the Maintenance Contract.

Hope this is ok with you.

I will ask Nitin to give you project plan for the new combined app.

Thanks

Shuklendu

Shuklendu,

I am glad that you talk about “ in a partnership mode “
But if RecruitGuru has to continue to underwrite ,

Ø  Server related costs

Ø  Bandwidth costs

Ø  Marketing costs

Ø  Other overheads

And also continue to bear the web site maintenance costs ,
Then I do not see how you “ share business risks “ !
If we are to consider sharing 25% of the App revenue on a PERPETUAL basis , then there has to be some formula whereby the web site maintenance costs get progressively offset/reduced as the absolute amount of Revenue ( @ 25 % ) earned by Sentient Systems keeps rising
And let me elaborate the larger picture
Today it is just one web site and one ( combined ) app
And this web site supports the App
In the months and years to come , there will be many more Apps ( with or without corresponding supporting web sites ). Think of B2B and B2C , both of which have tremendous scope for earning money
Today , on our web site , ALL services to both , the jobseekers and the employers , are FREE
But , in the months to come , we may jointly decide to introduce some “ Revenue Model “ for one or more of those web sites ( Subscription model / Pay Per Use model etc )
We may even jointly decide to develop / market Enterprise-based Recruitment Software ( eg: Order Execution System – for which we have paid Rs 5 lakhs to Applitech – Ahmedabad , and for which , we have full software / documentation in our possession)
Over the last 23 years , RecruitGuru has not only accumulated vast / useful content but it has also come-up with path-breaking Intellectual Properties ( eg: Resume Parsing software , which got incorporated in www.RecruitGuru.com at a cost of over Rs 1 Crore = 10 Man-years of effort )
I am inviting your participation in exploiting this wealth for mutual benefit
As far as I can see , this collaboration between us , could well become a timely “ Business Diversification “ for Sentient Systems
In light of the foregoing , I request you to come-up with a formula as suggested earlier

Regards

Hemen parekh