Developing new business models

(Andy Wootton) #1

How do we get away from a software economy built on large corporations using their market power to control customers? For a while we thought the answer might be to have Free software providing competition, and who doesn’t love free stuff? Large companies who wanted to maximise profits without making any investment in software turned out to be big fans.

A new crisis emerged as the success of Free and Open Source Software (FOSS) threatened the existence of ‘free-market capitalist software’ providers like Microsoft, Oracle and Cisco, with FOSS accomplices like Google and Facebook using the savings offered by FOSS to build new service monopolies in competition to them. Microsoft and Adobe have been forced to adopt the service model. Funding of common-ownership ‘Open FOSS’ has all but dried up. Incompatible services duplicate effort, form commercial alliances and fight for market share.

How do small software providers feed themselves without becoming part of the problem for everyone else? How do hackers avoid working for nothing to prove themselves, then queueing for scraps of work at the gates of the monopolists?

Q: In the absence of workable software copyright and patents, what do ‘we’ have to sell?

A1: Our labour. We have a market value. It may drop as a new generation of computer scientists is educated.

A2: Our ideas. Ideas cannot be protected, only designs, so we are forced to hide our best ones behind the walls of our service castles or trade them for income from anyone willing to fund development. Ideas have a very short shelf life, particularly in software. Once an idea hits the market, it is very likely to be copied. It is best for the world at large if ideas do spread fairly quickly, so they can be built on by others.

My new Answer 3: Early access to an idea that will be delivered to everyone in a couple of years, embedded in a FOSS implementation. Is access to an idea, say 2 years before your major competitors something companies would pay for? I imaging this work being performed in co-operatives that form for the lifetime of a product, though companies might continue, with a portfolio of products at different stages. It would depend on short-term non-disclosure agreements. Competitors could challenge you but they would always have 2 years work to catch up on. Key players could always leave with more up-to-date knowledge but they would soon learn how key they really were. Co-ops might agree to fork and do commercial deals to share information. In some markets, the product might be a modelling tool, where the latest version would have to keep improving to justify the expense over the free version. An unhappy customer could find a new team to take the stagnating software forward.

“Hackers, hustlers & hipsters” can you keep updating your ideas every 2 years or are you only interested in raising a cash cow? Co-ops would need trustworthy sales & deal-makers who could keep a secret, to keep bringing in the money and product owners to keep in touch with customer’s businesses. Custom jobs could be taken on too, if there was no conflict with the shared-cost core project. I’d love some feedback because I have some ideas this might work for, in the energy market, where I spent a big chunk of my career.

@sil Commercial/FOSS hybrid products/services? Like TKMax sell last-year’s designer warez for the price of orange chips.

(Marc Cooper) #2

I’m not clear where you going with this. I think you need to be more specific about the questions you are asking.

What do you mean by “get away from”?

Also, I don’t believe customers are being controlled. Psychologically exploited without their consent, perhaps.

“Free”, of course, is an interesting word. While there is plenty of free software out there, there is much that masquerades as free and is no such thing. Facebook being the prime example.

To answer your question: I’m not much interested in free stuff.

s/Large companies/Many companies and individuals/

There’s nothing wrong with this. This is the bargain that was struck.

I don’t believe there was ever such a crisis.

Not really. We might label things as SaaS, but many are products. Adding remote storage doesn’t turn a product into a service.

Last time I looked, FOSS was commercially funded at about 45%; often by maintainers being employed by an organisation to continue their work. That said, Linux, in Debian/Ubuntu and Red Hat/CentOS flavours, has bigger structures supporting it.

If a dev is building something to scratch an itch in the expectation that someone will pay them for it, then they are a little misguided. Some might achieve that, of course.

By working for someone. By playing the commercial game that we all do.

I’m actually seeing the opposite. The majority of jobbing developers these days simply want a job; in the traditional sense. They aren’t curious about the field nor their craft. Those that are will do very well financially.

Our friend Joel is good example here. The idea behind Buffer is exceedingly simple. Many folk here could replicate it in a weekend. An idea is a tiny part of the whole. Execution is all.

(Andy Wootton) #3

I don’t know how to respond to this, point-by-point now.

I’m not sure “where I’m going”. I like there to be balance between selfishness and sharing. I don’t believe in “winner-takes-it-all” capitalism or “everyone is equal” socialism. I think either leads to a broken society.

“I don’t believe customers are being controlled.”

Google want people to use their OS so they cross-subsidise hardware sales to make their product cheapest and make it very hard to install a different OS. Microsoft Lean on PC manufacturers like HP and Dell to keep their other options well-hidden. I consider both of those abuse of market power.

I meant “free access to the source code”. I’d rather pay for software I have the right to keep using and to be able to change than have freeware. Software escrow existed before Free software. Lack of access to printer drivers was the last straw that triggered Richard Stallman to start GNU.

“This is the bargain that was struck.” It wasn’t originally. The GNU licence said that software which used Free software must also be Free. It was intended that people would choose either model and RMS believed it would be hard to compete on price with free. That should have led to a funding mechanism for FOSS.

I don’t think Microsoft could compete with FOSS office suites when asking for a lump sum, but could at a few quid a week against Google. Adobe never seemed to manage to secure their software against poor artists. I use ‘service’ for anything that gets turned off if you don’t pay, or the provider goes bust.

I’m trying to find a way to fund FOSS development ‘fairly’. To me that means that if someone makes money by using software, they give some to the people who make it. Having an itch scratched is payment. I’d only expect payment if you solve other people’s problems.

Working for someone is OK but quality “software manufacturers” of packages disappear unless paid for, then competition, secrecy and duplication of effort causes inefficiency.

Yes, we can sell our skilled labour. That’s RMS’ model. I think we should also be able to benefit from having ideas even if we don’t have the skills to implement them, but I want ideas to be shared too. My compromise proposal is ‘secret for a bit’, to give commercial advantage to customers that fund those who have ideas and develop software and to receive payment while passing the hand-me-downs to the worse off and the mean before they are completely worn out. Maybe we could try something similar with companies that pay tax.

The idea I’ve had was going into one of my books but it could be worth a lot of money to energy companies and give them a commercial advantage but I want all energy production to be more efficient, so I want them all to have it. Perhaps I could get funding, patent a design and sell it to one of them. My compromise is to offer all of them a chance to jointly fund my research or be left a couple of years behind their competitors that do, spreading the cost across those who will gain most. The effect should be to make energy production cheaper and benefit us all. I doubt if the investment would cost more than the Christmas party did, 10 years ago. They’re a bit tight now though.

(Andy Wootton) #4

Another way of looking at this is: why do we have to choose between risking our aquired wealth to exploit the labour of others or be exploited for greater security or because we don’t have capital? We are tribal creatures that balance the interests of self and tribe. I don’t think we’ve been doing it very well lately, so I’m trying to ‘solve it’, ‘as a team’.

Recent corporate history is to talk-up team work but reward selfishness. I don’t know anyone who has worked as part of a cooperative. Why do they fail?

I just came across a Thomas Edison quotation I’ve never seen before:

“Everything comes to him who hustles while he waits.”

Also: "“I find out what the world needs. Then I go ahead and try to invent it.”

“My main purpose in life is to make enough money to create ever more inventions…. The dove is my emblem…. I want to save and advance human life, not destroy it…. I am proud of the fact that I have never invented weapons to kill….”

“One might think that the money value of an invention constitutes its reward to the man who loves his work. But speaking for myself, I can honestly say this is not so…I continue to find my greatest pleasure, and so my reward, in the work that precedes what the world calls success.”

(Andy Wootton) #5

I found this video from TedX Brum 2015 by Indy Johar:
I don’t remember having ever seen it before but I had it bookmarked in YouTube.

There’s one by him from TEDxOxbridge too that talks about many-to-many contracting and multi-actor governance. He doesn’t know how to do it either. I think he and I are both looking for problem solvers, but how do we collaborate and share value fairly.