Business Models for Nonprofit Software Development

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Facilitated by Ryan Ozimek, PICnet

This session will invite consultants and vendors at the event to compare notes on what's working when it comes to business models in 2009. Topics will include fixed vs variable price costing for jobs, staffing models, and implications of the cloud.

Session Notes

What are we looking for?

- Looking for new ideas that don't just reinforce standard models

- Explore the tension between executives and the web team. Monitization vs open.

- Strategies for making money on services when your platform is open source

- Getting more people to use the code that you developed and then open sourced

- Can open sourcing software keep you from being dependent on your current programmers

- How to convince management to open source a project instead of trying to sell it off

- How to balance turn key paid solutions with open source

- How to transition between being consultants, to building sellable products based on an open-source products


How can you fund a non-profit Open Source project?

- You can fund projects using grants to fund new features (but that is not sustainable over the long term)

- Cross-subsidizing by charging big groups and giving it away for free to small nonprofits

- Charge for your platform, but then open release the resulting data that is aggregated

- Give the platform away free, but then pay for it by charging the data you aggregate

- Give the product away for free, but then charge for support and updates (the Red Hat model)

- Build a name for yourself by building things and giving them away builds your cred for being hired on other stuff

- Release broken software and then charge people to learn to use it (the Microsoft model)

- Charge for people that want new features, and then give the resulting work back out for free

- Open Source your projects just as a way to convince your clients they would not entirely be dependent on you

- Have a hosted version that makes money while you give the platform away for free (The wordpress model)

- Get people to donate to the project. Simple!

- Get coorperations to sponsor the project. Simple!

- Sell ads on your site or hosted stuff

- Get people to pay into a bounty for doing a feature


Observations:

- money and open source software are not mutually exclusive

- opening up development to the world is not a way to save money. More developers mean much more management!

- If you open source something, and then don't respond to support requests, people might end up hating you

- Open Source projects have more upfront costs to start. Important for managment to understand it.

- You need to do market reserach before starting. See the demand and competitors

- If your open source community is "all questions and no answers" it is not worth it. you need developers.

- If you pull the existing development community into the project, then you really will reduce costs

- It is often much much easier to join an existing open source project, your handful of developers can never catch up with a crowd

- The incrimental development approach might not allow for major architecture changes that are needed

- Huge open source communities make for safer investments


Quotes:

- "Some people forget that it is about moving the your non-profit mission forward"

- "If the software is not easy to use, then it should be considered broken"

- "If you go through the trouble of making an open source product. It is only worth it if community develops."


Takeaways:

- Not automatic money, there are costs to open sourcing

- Lots of ways to bring money in. See notes.

- Need to decide where to spend money to facilitate further development