Was $30,000 a good asking price?

Yesterday the internet broke. Well at least a lot of javascript builds did. But I don’t want to focus on that part of the story.

In the published conversation, Kik asked if they could compensate Azer for transferring control of the kik project name on npm. Azer asked for $30,000. Kik walked away from the negotiation and asked npm to transfer the name since they owned the trademark to Kik.

First, I don’t believe Azer was violating Kik’s trademark. Kik’s trademark is for mobile software, instant messaging, and a website. Azer’s kik project is a software bootstrapping tool. I’m not a lawyer, but I don’t see how Azer’s use of the name is trademark infringement. There are many other companies that use the Kik name. The USPTO’s TESS system has 15 records for Kik. On this basis, it’s fair to say that Kik should compensate Azer for the name.

Now, was Azer’s asking price of $30,000 fair? Kik obviously did not think so. To an individual developer this is probably a sizable amount of money. But what is the value to Kik? While they don’t exactly say what software tool they are releasing, since it’s being released on npm it’s likely a tool for extending their service. The more extensions there are to Kik, the more reasons users will find to become engaged with it. Growing the user base has a huge return in terms of valuation potential for a VC-backed startup. Kik’s argument was that if they had to compete with an unrelated kik package, it could confuse developers (likely reducing adoption). So my question is: what is it worth to reduce that confusion? I don’t know Kik’s financials (they’ve publicly raised $120M on a $1B valuation), but I do know that software development projects aren’t cheap. At a company Kik’s size, anything worth releasing is probably costing tens, if not hundreds, of thousands in developer time, plus management, marketing, and overhead. If reducing developer confusion could lead to higher user numbers and thus lead to higher valuation, I could probably be convinced $30,000 was a fair price to pay. And if it isn’t, they could always counter.

Finally, if Kik’s goal was to get this project name for cheap, it was critical for them to set an anchor price early. By asking Azer to give the first offer they lost control of the negotiation.