Example of FOSS Economics

People who read my blog regularly know I’m big on looking into discovering what it is that will allow software creators, bug fixers and all the other people involved in producing functional products with a sustainable income.

Only two weeks ago I was talking with Matt Lee of the Free Software Foundation about this problem and apparently someone he knows had sold himself online for 6 months as a free software hacker by setting levels of pledges and some rewards and products for people who invest in the project and although the FSF doesn’t consider economics important enough to be a goal (much to my disappointment) the activists there are aware of it.

Now computer world uk is reporting on the exact same system, one where the artist, programmer or team sets out to raise money for a project and does so by setting a structured list to encourage higher amounts of money to be pledged.

Just like me they’ve avoided using words such as “charity” and “donation”, which I think are really not applicable to what we’re trying to do: viz. find a way to make Free as in speech economically sustainable.

What do you think about a stepped pledge model? Do you think that the model requires far too many direct supporters and existing backers before it can be made to work? Should I conduct myself in a similar fashion by creating a set of pledges for the ground control project and advertising it very widely?

10 thoughts on “Example of FOSS Economics

  1. Some resources I’d recommend for reading on the subject:

    http://www.techdirt.com/articles/20070215/002923.shtml

    http://www.techdirt.com/articles/20070503/012939.shtml

    http://www.techdirt.com/articles/20070118/013310.shtml

    It explains some fundamental economic stuff in a way that’s very easy to understand and practical to apply elsewhere. There’s also the account of Cygnus Supports business/formation, with some details on the business side of what they did and how they made money:

    http://www.toad.com/gnu/cygnus/index.html

    I’ve also made a thread on Ubuntu Forums about making commercial free software games, where I hoped to detail some models that are advantaged by giving the game away:

    http://ubuntuforums.org/showthread.php?t=1442535

    A bit of a link dump, but some good starting points to think about software business models (and business models in general) differently.

  2. I recently discovered kickstarter.com and it really makes it easy to do that kind of fundraising. I’m investigating using it but it sucks that it’s limited to US residents only. But yes, there’s something in this model that makes it attractive to all sides and I like the principle.

    On my blog I also spoke of the possibility to create a currency dedicated for the free software community. It’s another approach worth investigating/following.

  3. In this case, diaspora is a project that potentially has many more users than a developer tool. And it was announced in the wake of people’s frustration about facebook. There is a recent phrase: 1,000 true fans to support someone. At best I think you can advertise an amazon wishlist for your scale of project or a tip jar. It would take a much more popular project for that level of support.

  4. Diaspora is an anomaly. They have tapped into a huge undercurrent of misgivings towards Facebook and reaped the benefits as a result. Had they simply hit their $10,000 goal comfortably but not really getting any more than that, then you could maybe look at it as an example of how to raise money.

  5. “What do you think about a stepped pledge model?”
    It might work for some people temporarily; however, its not sustainable and it certainly won’t provide a steady enough income for most programmers to live on.

    I think most people prefer to get their intangible goods for free especially in the GNU/Linux world.

  6. I thik the best way to ensure developers are getting money for open-source software would be a biding sistem integrated in a sort of social way . so people could as for features , plugins , changes , forks and make offers for this .. if someone else likes your proposal thay can bid also and the amounts would rise and the developer would get payed for the creation of the software and not for copies of his work practice that i hate (this applies to artists also)

  7. Diaspora has managed to gather $180k in little over three weeks, and they still have two weeks. It’s over three times more the yearly goal of the Ardour project. It’s eighteen times more that what they have anticipated. And they haven’t written a single line of code. I haven’t seen any documentation. Nothing but a marketing talk.
    And those people, who have decided to invest into the project have high expectations. Most likely too high. If Diaspora fails to reach those expectations it will hurt the idea of funding Free Software projects by donating.

    Also I see another problem with the donation-based software development.
    Ardour is an awesome piece of software for two platforms written for professionals, Diaspora has gathered a lot of publicity – I’m sure it will be safe to say that it’s more publicity than any small or medium free software project can get.
    I have a feeling that the hacker you have been talking about is also not your average developer (just a hunch). So my question is – how many of those first-rate hackers who work on the most popular projects can Free Software ecosystem sustain? One hundred? Two hundreds? Do we even have those numbers?

  8. doctormo: How do you propose we call it then? Although I agree that “donating” is slightly misleading (and probably denigrating for those who make a living by living off the money they.. gather(?) this way). It’s not “buying”, it’s not “paying for”. Maybe sponsoring the future development? Personally I love the word “subscribing” and “subscriptions” in this context but it’s only right for a small number of people who pay regularly.
    (I actually believe that semantics is very important. And yes, I’ve used donating deliberately in my previous comment although I wasn’t sure if anyone decides to comment on that).

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