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Open-source infrastructure is not venture-backable

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Re: Open-source infrastructure is not venture-backable

#51

Post by ralmidani »

I'm the founder of a startup working on free software applications.

Making money off free software infrastructure is hard, because infrastructure is meant to be used by developers. A developer knows (or can learn) how to implement, manage, and maintain your piece of free software infrastructure, so how can you convince a developer to pay you for support?

Applications, on the other hand, can be targeted at non-developers. These users can convince themselves or their bosses that your free (as in freedom) application is worth paying for, so you can make it run smoothly and let them focus on running their business.

The only solution I can think of is for free software infrastructure developers to set up foundations which can take donations, and for application developers to support the infrastructure projects they depend upon.

One of the best examples of this is the Django Software Foundation. I made a donation last month, and I haven't even started making money.

Re: Open-source infrastructure is not venture-backable

#52

Post by lazaroclapp »

adekok wrote: post #48
freshhawk wrote: post #43

This is a type of discussion that comes up often. There are some very important things to consider to avoid causing unintentional harm. First, understand the difference between social norms and market norms (I like this overview: http://danariely.com/the-books/excerpted-from-chapter-4-%E2%... ) and how the introduction of market norms crowd out social norms (this is a good overview: https://natewkratzer.wordpress.com…

> Open source projects need donations in talented engineer time, not in money. I'm willing to believe that most open source projects could make substantial improvements if they had funding. See how Patreon has made a huge difference for Youtube videographers.

For a lot of large open source projects, funding may come in the form of companies paying their engineers to dedicate a significant amount of their time to working on existing open source projects. Or even open source projects that are part of a company's "products" (e.g. https://facebook.github.io/react/ , http://llvm.org/ ). Plenty of startups that use open source spend time improving open source projects (although, naturally, focused on the features they care to use, given how precious of a resource developer time is for a startup).

Re: Open-source infrastructure is not venture-backable

#53

Post by jldugger »

freshhawk wrote: post #43

This is a type of discussion that comes up often. There are some very important things to consider to avoid causing unintentional harm. First, understand the difference between social norms and market norms (I like this overview: http://danariely.com/the-books/excerpted-from-chapter-4-%E2%... ) and how the introduction of market norms crowd out social norms (this is a good overview: https://natewkratzer.wordpress.com…

> Open source projects need donations in talented engineer time, not in money.

As a infra provider to many open source projects, I have a very solid way of converting money into engineer time: I hire and train them.

Re: Open-source infrastructure is not venture-backable

#54

Post by sarciszewski »

adekok wrote: post #49
sarciszewski wrote: post #29

Earlier quoted context omitted.

Thank you for that spectacular TL;DR. No rational investor wants to invest in something that will absolutely not give them a return. Most open source infrastructure tools lack a business model to capture revenue from its users. So one of several things will have to happen in order for open source infrastructure to get funded: - Investors will part ways with their money, full knowing that they will not see a return. (…

> Most open source infrastructure tools lack a business model to capture revenue from its users. Like youtube videographers? Who start off doing it for fun, and then later monetize it? That evidence shows you're wrong.

How do you monetize, say, OpenSSL?

Re: Open-source infrastructure is not venture-backable

#55

Post by amlgsmsn »

Mozilla with it's hundreds of millions of dollars a year in revenue comes to mind as a steward of such a initiative. But they seem to have been spending the money in pursuing project without a chance to succeed like FirefoxOS and expensive office and perks.

E.g. https://ryanseys.com/blog/summer-at-mozilla/

>Interns at Mozilla, myself included, are truly spoiled rotten. Competitive pay, free travel/housing, free snacks/drinks and catered lunches every week were really just icing on the massive cake that was my internship!

>Oh, and did I mention that Mozilla also sent me to Paris, France?! Yeah, it happened. For my final working week, myself and a handful of the Identity team met up in the Paris office and hacked on Persona, and ate… and drank… a lot!

http://www.businessinsider.com/inside-mozillas-amazing-offic...

http://ngokevin.com/blog/mozilla-day-one/

Re: Open-source infrastructure is not venture-backable

#56

Post by cpitman »

sarciszewski wrote: post #29
dzdt wrote: post #2

Bad headline. Article is about identifying open source infrastructure tools as an overlooked category for venture capital funding.

Thank you for that spectacular TL;DR. No rational investor wants to invest in something that will absolutely not give them a return. Most open source infrastructure tools lack a business model to capture revenue from its users. So one of several things will have to happen in order for open source infrastructure to get funded: - Investors will part ways with their money, full knowing that they will not see a return. (…

You seem to be ignoring that there are profitable open source companies, the prime example being my employer, Red Hat.

Re: Open-source infrastructure is not venture-backable

#57

Post by freshhawk »

jldugger wrote: post #53
freshhawk wrote: post #43

This is a type of discussion that comes up often. There are some very important things to consider to avoid causing unintentional harm. First, understand the difference between social norms and market norms (I like this overview: http://danariely.com/the-books/excerpted-from-chapter-4-%E2%... ) and how the introduction of market norms crowd out social norms (this is a good overview: https://natewkratzer.wordpress.com…

> Open source projects need donations in talented engineer time, not in money. As a infra provider to many open source projects, I have a very solid way of converting money into engineer time: I hire and train them.

Sounds right to me, I was talking more about Patreon or bounty type methods of converting money to engineer time.

Since you have the experience I am very curious about one aspect of this, does the fact that some fellow contributors are paid have a noticeable effect on volunteer contributors. As in "Why would I do this for free when Alex gets paid?" or "Fuck this, I'll let the paid guys do this annoying part" or even just a cultural divide between paid/unpaid or a drop in volunteer contributors in general?

The theory says there would be a small but noticeable effect along those lines if people are thinking about it.

I've seen similar effects with Patreon type contributions, once the money comes once things change and once the money is spent work stops completely until there is more money. Most never come back. That and you get promising fun projects dropped in favour of the stagnant projects with better name recognition, which doesn't last because fixing legacy bugs for less than minimum wage is not a fulfilling way to spend your personal time.

I'd also be interested in how you'd feel having a donation of skilled engineer 20% time compared to money to hire someone less experienced but full-time.

Re: Open-source infrastructure is not venture-backable

#59

Post by Blackthorn »

amlgsmsn wrote: post #55

Mozilla with it's hundreds of millions of dollars a year in revenue comes to mind as a steward of such a initiative. But they seem to have been spending the money in pursuing project without a chance to succeed like FirefoxOS and expensive office and perks. E.g. https://ryanseys.com/blog/summer-at-mozilla/ >Interns at Mozilla, myself included, are truly spoiled rotten. Competitive pay, free travel/housing, free snack…

What's wrong with offering good jobs and perks? That sort of stuff is necessary to hire strong.

Re: Open-source infrastructure is not venture-backable

#60

Post by sarciszewski »

cpitman wrote: post #56
sarciszewski wrote: post #29

Earlier quoted context omitted.

Thank you for that spectacular TL;DR. No rational investor wants to invest in something that will absolutely not give them a return. Most open source infrastructure tools lack a business model to capture revenue from its users. So one of several things will have to happen in order for open source infrastructure to get funded: - Investors will part ways with their money, full knowing that they will not see a return. (…

You seem to be ignoring that there are profitable open source companies, the prime example being my employer, Red Hat.

You said:

> You seem to be ignoring that there are profitable open source companies, the prime example being my employer, Red Hat.

From my post:

> Most open source infrastructure tools lack a business model to capture revenue from its users.

Can we please not put words in other peoples' mouths? Kthx

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