I use the "[Idea Bin]" flag to indicate ideas that I don't have time to implement myself. If you choose to use one of these ideas, you have my permission and best wishes.
There are a lot of successful business models surrounding open source software, but most of them make their money from something other than the software itself -- support, ads, documentation, extra features, customizations, etc. A few years ago I spent some time trying to think up a model that emphasized the software itself. The trick, of course, is how can you get someone to pay you for the software when they can get it from someone else for free (because the freedom that comes with most open source licenses includes the ability to give it away for free).
Well, what if you can encourage your users to join your business rather than subverting it? It's like shareware for an engaged community, so I call it sharesware.
The project founder starts with 100% of the shares. Every person who purchases the software gets 1 temporary share (new shares are created magically; they do not come out of the founder's pool). Everyone who contributes improvements to the project (including the founder) gets N permanent shares. Big features get lots of shares, bug fixes get a few shares, documentation may get a lot or just a few shares (depending on how badly the documentation is needed). Support in the forum may be worth shares too.
How do you decide how many shares to grant per task? The founder decides this at first, but later share holders may get to vote once per [time unit] to change the pay scale. Stakeholders are encouraged to be generous with shares since that is the currency that keeps the community alive.
What are shares worth? If you have at least one share, you are guaranteed access to the current source code. Otherwise you have to buy your way in with cash or labor, or make do with an older free release. Furthermore, some projects may distribute cash income proportional to shares. Some may grant you access to a finite resource (imagine if the software in question is a MMORPG; the resource is the server). Some may simply grant you power over the future of the project.
Could it work? I have no idea. But I can say that it won't work if 1) the project is not churning out new desirable features all the time or 2) if the founder is stingy with shares. My favorite feature of this model is the inherent value of labor vs. cash which means that charging money for the product does not necessarily cut off less wealthy people from using it.
Is it too complicated? Probably, especially given tax liability. But I'd be happy to be proven wrong.
Re:Cash Flow?
ChrisDolan on 2008-01-31T12:38:56
Ahh, you see that's where my meta-business plan comes in.:-)
A motivated individual creates a software infrastructure which manages all of the share tracking and, possibly, the cash management for a small cut off the top. For the system to work, it must be largely automated. If the founder chooses such a service, then s/he needs only configure a share distribution policy to get started. Taxation is still a hurdle, of course.
Cash flow is always a problem for any business. In the sharesware model, it is necessary that the business run on a very small overhead, or that the community be willing to devote some fraction of its income (pre-determined?) to business development.
How do you do something worth shares if you need shares to get access to the source in the first place?
Re:Bootstrapping?
ChrisDolan on 2008-01-31T12:28:27
Good question. There are a few ways:
1) The founder releases an older/initial version for zero cost. You download it for free and earn shares by filing bug reports or writing docs or helping others in a forum.
2) Expect some users will share the source for free outside the community and people accessing that free stream will want to join back into the community.
Re:Bootstrapping?
Aristotle on 2008-01-31T12:47:13
Making people do drudgework before they can do any of the cool stuff they’re actually interested in is not conducive to attracting a community, is it?
If you tacitly acknowledge that people must violate the central “shares grant access” concept in order to make it viable, isn’t that self-defeating?
Re:Bootstrapping?
ChrisDolan on 2008-01-31T13:10:53
I never said it was a *good* idea, did I?:-) Re:Bootstrapping?
Aristotle on 2008-01-31T13:27:28
Believe me, I know a lot about the disappointment of neat ideas with fatal holes in them.
:-) All I can say is sorry, even though I only found the hole, I didn’t make it. I was hoping that you might have a good counter.
