Funding Software Development Through Bonds 76
TwP writes "There is a rather long but very interesting paper posted on First Monday that describes a software completion bond market. The bond market would be used by programmers to generate revenue for software projects, open source or otherwise. It would also help to identify potential users of the software package - those who invest in the bonds would most likely be those to use the developed software."
Will it hurt innovation? (Score:1)
Task Market & Buskware (Score:1)
This is not the bond market (Score:5)
This financing through bonds has little if anyone to do with the bond market as you would find on Wall Street.
A normal bond would be where I give you $1000, and every year you send me $50 interest. At the end of 10 years you send me $1050. (The orgional $1000 + $50 interest) Interest rates change of course, trust worthy companies with little dept pay less interest, while untrustworth companies with a lot of dept pay high interest. You get the idea though, basicaly a bond is a loan.
These bonds are an agreement, I put up $1000 (with a trusted third party), payable to anyone who provides certian software functionality. The third party, upon reciving a program with that functionality would pay the programers. The bonds avaibale would be known so programers could decide what to work on.
I'm not sure if it is a good or workable idea, but it is an idea.
Is this necessary? (Score:2)
It seems to me that there are currently at least 4.5 million (more or less) schemes designed to make Free Software development "profitable." Now, I am certainly not opposed to making money, but I fail to see how the current system of Free Software development is broken. It seems to me that when I sit down at my Debian GNU/Linux box I have plenty of good software available to me. In fact, the advance in the state of the art for Free Software has been so amazing in the last 7 or 8 years that commercial software houses are finally realizing that they have to adopt some Free Software techniques in order to remain competitive. Nearly every major commercial software vendor has sponsored some type of Free Software project. And Microsoft is clearly borrowing ideas from the Free Software community with their "Shared Source" initiative.
If you really are interested in making money writing free software here is the trick. Don't spend a big fat pile of money going to trade shows, buying fancy cars, and purchasing expensive office space in Silicon Valley. Instead start by doing contract work for small companies and make sure your contract has a provision that allows you to keep the copyrights for your work. Then turn around and use that same source in your next contract. Now take that working software and release some (or all) of it on the Internet, and start to market it. Chances are good that your source will be of interest to a fellow developer with a similar problem, and with a little marketing you might even get some patches containing new features (which you can then sell to your existing customers).
Cygnus made money like this for years. With many business type packages the service and support contract is the main revenue source anyhow. You won't make Microsoft type money, but you probably wouldn't make Microsoft type money with a closed source product either.
There are plenty of software packages that small businesses pay tens of thousands of dollars for that are literally overgrown Access Databases. Competing with these packages on price and features is not particularly difficult (considering the wide array of inexpensive useful tools and existing source code), and more importantly it isn't particularly expensive to finance this type of software. In fact, that's one of Free Software's biggest advantages. Free Software development requires substantially less working capital, and the expense can be shared among interested developers.
Re:Some of this is done already (Score:2)
Wouldn't it be easier to simply hire the contractors that are actually doing the work? It seems to me that the infrastructure that would go into making these sorts of bonds possible would be a lot more expensive than simply hiring a lawyer to write up a standard contract with the developers (or their company).
Heck, if you actually hired the developers and brought them in house you could even decide which parts of the software in question became Free Software. That might be important if you had important business intelligence you were interested in coding into the application that you didn't want your competitors to have. This would be perfectly legal under the GPL. Your customer would receive a copy of the source with their copy of the modified binaries fulfilling the requirements of the GPL and then neither you or the customer would distribute binaries with the proprietary bits (guaranteeing that you needn't distribute the code you didn't want to share).
With bonds and several investors this sort of deal wouldn't be possible.
And that's not even the most obvious of its failings. The most obvious failing is that companies that don't participate in the bond will probably also receive access to the product. What exactly, then, is the incentive to pay?
Free Software developers currently share code for various reasons. One reason seen in Mozilla, OpenOffice, eSpeak, etc. is that the sponsoring company wants a product to become a standard. The company then hopes to leverage their expertise to sell hardware, support, or other goods and services. These projects generally don't need to worry about outside financing as the the organization sponsoring the project has sufficient resources to carry the bulk of development out itself.
The other reason that Free Software developers share code is because it allows small time developers with limited resources the ability to tackle large projects by pooling their talents. The fact of the matter is that if you have enough money to pay for all the coding to be done in house, and you plan on paying your bills by selling software (and not some other good or service) then you are probably better off keeping the code private.
Too complicated. (Score:2)
How is this easier or more functional than simply hiring a contractor to make the changes that you would like to see made? And why should a company pay money so that it can vote when instead it can pay money and hire a contractor to add features. Especially since you can sit down with your contractor and sign a legally binding contract.
Re:Too complicated. (Score:2)
If you happen to have an exciting new idea, and you want to create an Open Source version of it, the easiest way to do this is to a) set up a website, and b) start putting code there.
Let's say I had an idea for a fabulous new piece of software, but I didn't have clue one as how to create it (very unlikely in my opinion). Under your system I would have to round up a bunch of developers interested in building the software, and a group of investors and money larege enough to make competing for the cash prizes worth the developers while. Oh, I also have to get these groups of people to agree on a license that would be compatible with their needs but still open enough so that I would have access to the software for my needs when they were done.
Want some eternal life and world peace with that order? Good Luck sorting that mess out.
On the other hand Linux, Emacs, Sendmail, the Gimp, Perl, Python, Apache, etc. all exist today without any such process. People simply started sharing code because the project was too big to do by themselves, and they were too poor to pay for the commercial alternatives (or no such alternative existed). In groups, however, these small time developers could afford to tackle these large projects. None of these projects were started to make money. And had money been the prime motivator then the source code to the project would not have been released. It's far easier to simply sell commercial licenses.
The next generation of Free Software will come into being the same way the previous generation did. Someone will release the source code to their software because it is in their best interest to do so. Either they will have based their software on existing Free Software (to save time and money in development), or they will do it in the hopes of receiving developmental help. In both of these cases the question isn't raising the money to do the development work, but instead it is about lowering the cost of development work so that it is affordable to the people who need the software.
Worse! (Score:3)
How many would invest knowing that it was likely that the software would be released as Free Software at the end of the project whether you paid or not. Why not simply let your competitors pay for development, and you could simply scoop up the project when it was finished.
You could probably even hire the original developer to install it for you (he would be looking for a new job).
This type of system would actually work much better for closed source development. But we already know how to finance those sorts of companies. Basically the whole point of Free Software development is that it requires less working capital, and allows you to spread development costs over several interested parties. If you are going to develop software in a closed source commercial type of setting (ie, cathedral style) why not simply fund your R&D in a more traditional manner.
Journalist needs money, points out obvious (Score:2)
Then, the programmer goes to the bank and gets a loan against the money in escrow. Okay, this already works this way on cosource... Seems to me that he is just rewording what the site already does, this isn't a proposal for anything new...
I also notice that he mentions sourcexchange in the article. Since the article was published 6/4/01 and sourcexchange was shut down 4/6/01, this article was sorely out of date before it every went out. Now if we figure 90 days from submital to publishing, ie print publishing. This would have been written and submitted 3/4/01, so sourcexchange wasn't down yet, but they had already announced that they were going down...
So let me paraphase the article,
reporter: I need money, let me reword the cosource/sourcexchange business model and submit it as original work...
Lando
Some of this is done already (Score:4)
Companies that use open source projects could buy bonds, and then direct to the path of the project to suit them. I'm a midrange copration, and I want an office suite. I buy X amount of bonds in OpenOffice, and say I want A, B and C. A, B and C are quickly added, the changes benefit all, and my company has an office suite with the exact fetures my company needs.
I COULD just as eaisly hire programs, and have it done internally. But why? If my company makes wire, why the hell do I want to go though the trouble of another department to optimize the company standard office suite. I have wire to worry about, not office suites.
So, if bond purchacers have an actual say in where they want a project they invest in go, this could be a VERY good thing for all open source projects.
Poke holes in this for me please (Score:1)
I put up 10million in funds. This money goes
to a medium intrest account and the intrest goes to the company.
The conditions are: use this intrest to build a good company within x amount of time or untill you have used this to get a value of x amount and the rest is yours to go strong with the idea. Fold and I get the 10 million back.
This seems to me that it would help build a company on shoe string budget untill they got a working model, then they get the money to do the real work, of building and expanding.
Or they fold and VC gets there money back loseing only the intrest they could have made on it.
Re:Starving OpenSource Developers (Score:2)
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Bond Market (Score:3)
Making Money With Open Source (Score:4)
1) Sell a feature-added proprietary version of the software. Aladdin and Trolltech do this and are quite successful.
2) Sell proprietary addons to the software. The Kompany is doing this.
Conspicuously absent from this list are service/support, consulting, and reselling.
I haven't seen any profitability for service/support yet. It might be possible, but I just haven't seen it. Besides which, it's a lousy incentive for quality.
Consulting can be very profitable, and in fact, is where Cygnus made a heck of a lot of money. But consulting isn't generating revenue from the software. It's generating revenue from the consulting! The software merely acts as a glorified resume.
And of course, resellers aren't writing the software anyway.
I wish there was a way to make money directly off of Open Source without resorting to proprietary versions, extensions or addons. But I just don't see it yet. Bonds and other investments don't count, because they are not revenue. Likewise, I don't count donations to the "cause".
Instead of trying to find ways to make Open Source profitable, perhaps we should be trying to find ways to make closed source less onerous. Very few people are against paying for quality software. What they do object to are closed standards, upgrade cycles, and restrictions on personal and internal use.
Re:Worse! (Score:2)
Why not simply let your competitors pay for development, and you could simply scoop up the project when it was finished
Only one problem with this reasoning - the software is opensource, so you end up with exactly the same software that your competitor (and the rest of the world for that matter) has. So what advantage does that give your competitor? Or even you for that matter? Your potential "customers" can download the software for free, they wouldn't have to go to you OR your competitor. The way you tell it, you'd think the competitor ends up with the only copy of the software.
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Re:Worse! (Score:2)
Sorry, I think I had it the wrong way round there. Doesn't matter, argument applies regardless of the side from which you apply it.
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Re:Investors != Users (Score:1)
Re:This is not the bond market (Score:1)
The problem with the idea (Score:2)
It's basically the difference between driving across the US and hitchhiking. Hitchhiking works but you don't know how long it will take, what class of ride you will get and whether the person you hitch with is gonna shoot you with that gun under his seat.
I like the GPL... (Score:2)
Basically, when you bought the product, you would receive the source, with a license stating that you could only share the source and any modifications with other license holders of the software, as well as with the company - in fact, make it a necessity that the company gets the mods , so the new users/buyers of the software get the mods as well in their copy of the source. Maybe have some kind of CVS system set up for all of this.
The license would have to state that any sharing of the source or binaries outside the group would be prohibited. Finally, the license would have to state that in the event that the company goes under, is bought out, etc - that the source would be automatically transferred to GPL status.
Would this even work? Would it be appealing? I am looking at this and am thinking it isn't that appealing (I am a GPL zealot for the most part), but it would make money. I also have this nagging idea that this is already being done by a company, but I can't put my finger on it.
Comments?
Worldcom [worldcom.com] - Generation Duh!
Interesting idea... (Score:1)
solution to vaporware? (Score:2)
It worked for us (Score:1)
As long as you, as the developer, are really good at The Paper Trail and you're not trying to hide anything, I really recommend going with a bond. Of course you get the publisher to pick up the fee
I can't wait to see the propoganda posters (Score:2)
Solution #3: Fund development from profits on the (Score:2)
This is the only realistic option I saw. Trying to set up the bond jury would be ridiculously difficult, subjective, and prone to undue outside influence.
Option #3 is something that you can do today, and your revenue stream is entirely within your control. You can decide how much you want to market/advertise. You are in control of your profit model. You will fail or succeed on your own merits.
You could even set up a business supporting someone else's software. Examples: Cygnus, all those Perl consultants, book authors, magazine article authors, etc.
Possible loophole (Score:2)
- Programmer nominates friends as bond judges, perhaps with explicit or implicit promise of a cut of the take.
- Programmer cranks out a half-baked implementation of the idea, and asks the bond judges to approve it.
- Bond judges comply, even though the product falls far short (in most users' eyes) of the promises.
- Bond judges either cash in bonds they have bought, or get money from the programmer (who has also cashed in).
- If anyone complains, bond judges have a detailed justification of their saying "yes", sufficient to convince any judge of law that the complaint may be just an honest difference of opinion between professionals, and thus not legally actionable as fraud.
And the sad thing is, this doesn't even have to be a scam. The bond judges and programmer could honestly believe they're legit. (In which case, bribing the bond judges becomes optional.) Or the bond judges could flash all kinds of credentials but be unable to honestly judge software. (Which might be solved by having reputable bond judges who are known for only approving good systems, but how does one avoid having this problem discredit the whole system until reputations can be built up?)Profits? (Score:2)
let me explain:
programming was originally done to solve known problems. spreadsheets made bookkeeping a hell of a lot easier and THIS was the main reason a hobby became a neccessity. THIS is the reason companies and corporations embraced computers. (yes there were other reasons such as cost of hardware etc.)
but, in the last 20 years Microsotf has shown people how to become rich by software alone. "write once, sell forever" was a motto a friend of mine used to mutter and yes, he is wealthy because of it. but i believe this is no longer valid. there is too much competition. there is too many features that mean nothing to businesses.
i know of a company that has been trying to find software to handle the books for 2 years now. the software they search for is very sophisticated (Municipal Bonds and Securities) and the only product that matches their needs is horribly bloated and costs around $30m with an additional $20m in yearly maintanence fees. this company will NOT support this type of extortion.
they now pay me to write/find any software they want/need.
THEY ARE NOT UNIQUE!!!
i could sit at home and write code to do what i want it to do and hope someone will buy it from me or i could CONSULT for some companies and have the pleasure of solving problems that are already defined.
and i turn away 2-3 requests a month.
Microsotf got rich by creating problems to which they had solutions. that is the goal of any monopoly.
but trust me, solving problems defined by a paying customer is MUCH more rewarding then coding for the possibility to sell it later.
the danger is this:
until programmers stop worrying about how they can sell their software, make money, go public and retire, and start coding for other peoples problems, they further nothing but greed.
they will never have the joys of a happy customer and a fat bank account.
this is my post from after before.
Another option. (Score:1)
That way you always have it there ready to pay the developers when their program solved a particular problem of yours. Could work.
Of course Gnome is just an example (because it has an help menu) but you catch my drift here.
Of course there will be needed big infrastructure here and it will only work if it's really easy to use. Having to put money on paypal or similiar is probably to much effort to ask from the users.
this seems familiar ... (Score:2)
hmmm (Score:1)
What's in it for me? Nope, for us! (Score:1)
This idea really only works if the bond backers cannot produce the software more cheaply by hiring programmers themselves. Of course, the assumption is that the backers want the product, not the capital returns; but investment is a major factor in providing capital.
Even if the investor were to receive the interest accumulated, if the money from the bond backers must go into an interest-bearing account, to be released only when the product is finished, then investors would not see a high enough rate of return to cover interest on the value of the bank loans the programmer has to take out -- which must be covered before the investor could see any return at all.
More simply, the rate of interest which the programmer faces on the loan will be higher than the rate of interest earned on the bonds. Although the bank won't provide anything near the entire value of the bonds for a loan amount, the difference must be made up entirely in the difference between the programming costs and the final value of the bonds.
This is great for programmers; but these bonds would be worthless to anyone actually interested in investment. And without a heavy influx of investment capital, today's tech companies wouldn't be able to do much of anything.
As an excercise in communitarian ventures, it's a great idea.
Larsal
Equity not Debit should finance new ventures (Score:1)
Re:Making Money With Open Source (Score:2)
I must admit I very much admire their business approaches. If I recall correctly, Aladdin has a current release and an older GPL release, and as new verisons come out older ones are GPLed. Trolltech has several possible licenses, and they insist on money only when there is commerical software being developed. There are many advantages to these, both for the company and the consumer:
The consumer can be confident in the quality of the code, since it is open to examination and review. In the case of Trolltech, the current release is being studied all the time, and in Aladdin's case their current version will eventually be opened. In both cases this means that the code quality must be maintained.
The companies get continuous feedback from outside developers. Also, they get mindshare. Who can think of a better advertisement for QT than the KDE desktop and applications? A further advantage is that it discourages the creation of alternative open source products which might wipe out your product line. Rolling changes made to the GPL version back into the commerical one is a problem, but if the company simply uses the idea and codes it their own way, or talks to the developer and gets their permission to add it to all versions (reasonable for most people, since the code will stay GPL and will also help support further overall development of the product) it can work beautifully.
This may ultimately be the most viable way for companies to work with open source. It has been very successful with Trolltech and Aladdin, so hopefully that will attract more attention to this model.
"2) Sell proprietary addons to the software. The Kompany is doing this."
Also viable. For certain kinds of commerical applications such as end user deskop applications, this is almost certainly the way to go. I believe once the company has a fair number of businesses who are willing to pay for the latest and greatest option one is better, but otherwise this is a smart move.
"Conspicuously absent from this list are service/support, consulting, and reselling. I haven't seen any profitability for service/support yet. It might be possible, but I just haven't seen it. "
The problem with this is that in order for it to work you must have a large installed user base which is not capable of supporting itself. In other words, someone other than geeks and open source developers. If Microsoft wanted to, they could probably convert entirely to income from service contracts and live happly ever after, provided they improve the quality of their service.
"Besides which, it's a lousy incentive for quality."
True to a point, but if you're open source you have to toe the line or you will have someone forking to make a better version. Also, if you mess it up too much you might lose your users altogether. I don't think companies have to worry about not getting enough support requests once ordinary end users start using their software. Remember there are people out there who are scared of anything new. Just training them would be a goldmine, provided you do your job well.
"Consulting can be very profitable, and in fact, is where Cygnus made a heck of a lot of money. But consulting isn't generating revenue from the software. It's generating revenue from the consulting! The software merely acts as a glorified resume."
That's one way to look at it.
"I wish there was a way to make money directly off of Open Source without resorting to proprietary versions, extensions or addons. But I just don't see it yet. Bonds and other investments don't count, because they are not revenue. Likewise, I don't count donations to the "cause".
Whoa, another source of toilet paper! (Score:1)
A bond issue backed by software is nuts. How is the company going to pay back the bonds in X years or months? Most, and yes, you know I'm right, software projects wither and die or make little money. To get people to invest in bonds with a crap rating, which software bonds would have, you need to promise massive returns in a short period. I know software engineers are good at promising things they can't deliver, but this is another story.
Re:But... (Score:2)
From a quick skim of the article, it sounds like these bonds may allow software companies to build up what was usually angel-stage money by taking funds directly from potential clients.
It's so crazy, it just might work!
(email addr is at acm, not mca)
We are Number One. All others are Number Two, or lower.
OSDN BAKE SALE!!! (Score:1)
BusinessMan: Yes, I'd like a C++ Carmel Cake, please
Programmer: Would you like a programming bond with that???
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Re:Poke holes in this for me please (Score:1)
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Bond Ratings (Score:1)
Poor bond ratings will likely prevent the use of bonds from becoming a viable way to raise money for software development. The concept of having the end users pay for development, while an interesting idea, is unworkable under the model proposed.
Re:OSDN BAKE SALE!!! (Score:1)
BusinessMan: Yes, I'd like a C++ Carmel Cake, please
Programmer: Would you like a programming bond with that???
I don't know about you, but I'd pay $20 for a programmer car wash. Just think, you can now listen to Eric Raymond talk about open source philosphy while he scrapes bug goo from your grill with a toothbrush.
Seriously though, I've heard an awful lot of rhetoric about making money with open source. This may seem like a blantantly obvious question, but is anyone asking for money? I mean, Ximian doesn't have a PalPal link up, nor does RedHat, etc. They seem to want people to contribute with source code, not cash. I didn't read the article, so maybe I'm missing the point here.
Not a bad Idea (Score:1)
Advice (Score:1)
Don't fork over $$$ for any bond that has specifications like "Bug Free Microsoft OS".
If the only tool you have is a hammer, you tend to see every problem as a nail.
Re:Debt financinf of technology is vary risky (Score:2)
Starving OpenSource Developers (Score:4)
For just pennies a day, the cost of a cup of coffee, you can save one of thousands of OpenSource developers like these:
Camera pans down and to the left to the image of a shrunken, pale, programmer, intraveneously importing deep brown coffee into his system, working with gdb on debugging a file system.
For just Pennies a day, you can make all the difference for a programmer who has no life, no future. When you pledge your pennies, you will receive, with every quarterly report, a low quality JPEG of your programmer, and also a plaintext email from your programmer, telling you about his dreams for his software.
(Camera pans up and to the right, focusing on an image of Linus Torvalds, with a silly grin, reaching out to punch a final semicolon on his keyboard.)
Just look at what previous contributions have done for these people; As your developer grows and grows, day by day, you will feel such pride at his accomplishments.
Please, go to your PayPal account [paypal.com], send a $15 contribution for this month to "lion@speakeasy.org" and have the satisfaction that for the pittance of a cup of coffee a day, you've made the world a better place.
The Biggest Problem will be their Ratings . . . (Score:3)
The BIGGEST problem will be the RATINGS of these bonds. Remember it will be the suits who just got hosed on tech stocks for the last few years giving any software bonds their ratings.
In this market, don't look for too many WS types to hand out many AAA ratings to coding, VC stealin' hippies.
Re:Solution #3: Fund development from profits on t (Score:1)
-Mynn the Museless
Re:Possible loophole (Score:4)
1. Programmer will not nominate friend as bond judge. They will go through a proven bond-assistance company. Many law firms already provide these services (e.g. Miller Canfield or Hawkins Delafield & Wood).
2. Half-baked implementations will not be approved because our smart bond issuers will set very strict requirements and the software will be complete when it complies with the requirements. This is currently how good software development processes work. No reason that using bonds for funding would be any different.
Anything else that a bond judge might do would be a breach of contract.
With regard to your comments about discrediting the whole system until reputations can be built up, there are already many good reputations that have arisen from the sale of government bonds. There are many companies that deal with various aspects of government bonds. The difficulty would be for the bond issuers and purchasers to carefully go over the software requirements to ensure that they are clear and attainable.
again: IANAL and I welcome and response from anybody who agrees/disagrees.
Wow! (Score:1)
"The most recent calculations show that the annual cost to consumers and taxpayers of [Organisation for Economic Cooperation and Development, OECD] 29 member countries' support for agriculture and horticulture amounts to US$361 billion. Such a large sum is difficult to grasp, but it is large enough to pay for a first class, round-the-world air ticket for each of the 56 million cows in the 29-member OECD's dairy herd, and to give each cow a further US$1450 spending money for her stopovers in the US, Europe and Asia. Or the cows could slum it in business class, and have US$2800 spending money. And they could have this sort of trip every year, thanks to the generosity of OECD consumers and taxpayers."
You can't have your cake and eat it, too. Either you support inherently ineffective "social programs" as espoused by your beloved Ralph (uri)Nader, or you don't. You cannot use Libertarian logic when it pleases you and ignore it when it doesn't. Sorry.
[Waiting for my moderative spanking.]
Ha ha ha ha ha ha (Score:1)
Debt financinf of technology is vary risky (Score:4)
This is why companies like Nortel Networks [cnn.com], hith high debt loads are having a tougher time weathering these tough economic times than companies like Cisco Systems [cnn.com] that has a low debt load.
This is basic economics. It's been proven over and over.
--CTH
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Re:I like the GPL... (Score:1)
Re:Debt financinf of technology is vary risky (Score:2)
Re:reminds me a lot of sheep (Score:1)
But... (Score:2)
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dont know that it would work (Score:1)
Financing intellectual property through HSX (Score:2)
In email discussions, I always argued for issuing bonds over issuing shares of ownership in a media property because bonds are less risky for an investor, so long as they can properly assess the ability for the property to generate the promised income. A stock, as we all know, can soar and crash. There are also huge issues surrounding ownership after bankrupsy, SEC regulations, and so on. Through the bond price may fluctuate, it will continue to generate income (unless they are unable to pay) until it is due.
I think that there is definitely a future for creating bonds for intellectual property, whether a film, software, a book, or whatever. Heck, junk boonds in risky movies and software projects could also have a big impact. However, bonds will be most successfully issued by individuals or groups having a good deal of credibility. Example: a prominent oss engineer funds a new version of his product by issuing a bond based on future corporate sales.
Not sustainable (Score:1)
What the article does not point out is that SourceXchange has closed shop, and CoSource development is economically unsustainable. The problem in both cases is that people will not pay for open source development.
SourceXchange allowed programmers to negotiate the price of the software, with the result that no one was willing to meet these development costs. I am not aware of a single project that was sucessfully negotiated through SourceXchange.
CoSource is even worse, it allows people to request whatever projects for whatever amount of money they wish. The result is that most requests have zero dollars and zero cents committed. That's right, they expect someone to develop software for them without ever receiving a cent. Other projects have commitments of up to $300. There is no way you can develop a full-featured application for a total cost of $300.
Closed-source works because people are willing to fund closed-source shops with millions in investment cash. Until the same thing happens to open-source development, it will be playing catch-up to closed source applications.
NOOO! (Score:1)
Investors != Users (Score:2)
If a user has enough money, he'll hire programmers. If he does not, he probably doesn't need a program so special, it needs to be developed i.e. doesn't exist. I cannot understand the logic behind this assumption.
Re:This is not the bond market (Score:2)
That way, I wouldn't have to *hope* that someone would take my offer.
Yes, it may be more expensive, but at the end, it will be something that I need, not what somebody else think I need.
--
Two witches watched two watches.
Bonds for Programming? (Score:1)
So...
Yes... I can see it now. Okay, I've got an idea... I'm going to start a "free software fund"... everyone who wants to join will send me $10... then for every person you get to join, you take $10 of their dollars and send me half of that... then when they get someone to join, they take THEIR $10, give you five of it and you give me $2.50. Hrmm oh yeah and the money I "earn" will be funding a project to code a PHP script to refresh a browser every 30 seconds incrementing a variable by 1. How about it?
I think you need to flash your brain's firmware.
007 (Score:2)
ok, I know james bond is a cool guy, but come on, software development too?
oh, I get it... maybe he wants to put a back door in the evil villain's system so that he can escape before he gets sawed in half or something. /p?
These aren't "bonds" at all (Score:1)
And you thought the stock market was a crap shoot? (Score:1)
'crow
Nothing New here (Score:1)
Last year, I came up with something very similar that I called the Partnered Development License (PDL), thinking that it would be the shiz-nit. No lawyer would touch it. Actually, they told me to sell it to e-trade or Ameri-trade (maybe I should)
Basically, you can just think of this as a micro-IPO, you invest, you get a share on the return and we're all happy right?Well, in devising such a plan, I realized a major factor of accountability here: Accurate and Accountable reporting on Gross sales statistics. That is, how do we know how much is actually sold on the market to be able to ensure that all participants get their due share?
The only real answer: A common market. So basically, we would need to create a model based upon the working model of NASDAQ or NYSE to accomodate the accounting of sales for each traded commodity (software) to ensure accountability and accurate exchange rates.
What a frickin mess!!!! damn-it Jim, I'm a developer not a suit!So, seeing the tremendous efforts that would be involved, and after presenting the following framework (linked below) to Capitalists to seek investment in this venture, and seeing them shudder with anxiety at the slightest thought of what would all have to into this:
- The hundreds of millions of $$$'s
- The ordeal of a year or more of filings and scrutiny by the SCC
- The effort to attract participants for this market
- The utter uncertainty
They kindly told me to rethink the requirements and suggested that I just forget about it and do what I do best: Develop Software. The fact that they gave me several hours of their time and pointed out these issues was reward unto itself and I thank them.I should note that a market very similar to this has already been established here: Asycrony.com [asyncrony.com] and from what I can tell, really isn't doing all that hot. But, they've around for awhile and maybe they just need and deserve more support from the development community to gain more public awareness.
So for those who are interested in a Partnered Development License or agreement to facilitate Co-Development with Capitalists, see the following link for the M$Partnered Development License v2 [webfresher.com]
Re:Not a bad Idea (Score:2)
I'll be one of those annoying anal retentive Slashdot guys for a moment and point out that Chris Roberts left Digital Anvil a while ago.
But to focus on the crux of what you're saying, I have to agree that the game industry would be a good testbed for this kind of thing. A lot of people would've sent money hand over fist to John Romero when he started Ion Storm (and lost miserably) but a few would now be cleaning up on their investment with American McGee. Just seems like a neat idea, people would essentially be able to "bet" on their favorite game designers and companies, I think a number of gamers would go for this. While I doubt most developers could raise enough from the general public to fund the whole production, it would be a nice bonus. Interest in a certain bond could even attract additional dollars from a VC or publishing firm. Cool idea.
Amazingly stupid... (Score:1)
Where the hell have you been, didn't you notice the IT crash?
It's not less revenue (that is what this would make) that is required but a lot more!
The problem with the great number of new IT-related companies is that they are run by people who have absolutely no idea what so ever about how much revenue a company need. Or how to run them at all for that matter.
People look at companies and say that they make too much money. They don't. Do you have any idea what the costs are? Vacations, sickness, taxes, training and so on...
Say you have a pure consultant company. Not much additional costs above salaries for it's consultants. Just to make it (without profit, just avoid bancrypsy) each person have to make about twice his or her salary. Say you have ten people (a small company), you do the math for a year. You will discover that it's expensive to live!
Most companies have alot higher costs than this example company.
Bonds, you can't be serious! What we need are real companies, run as real companies with real (big enough) revenue.
And, just how the hell do anyone have the nerv to point fingers at the venture capitalists of all people? They are after all the ones that put in million after million to companies without income. They are the ones that lost ALOT of money because these companies are run by incompetent people who thinks it's possible to live on air.
You can blame VCs for being stupid for putting in money into companies without real revenue but it's certainly not their failt that they are failing.
Re:Not sustainable (Score:1)
Take a simple example. Say we have a projects that takes five people one year to complete. The cost for each person is about twice his/her salary (taxes, sickness, etc etc).
Lets say each person make $4.000 a month, that makes the total cost 4.000 * 2 * 5 * 12 = $480.000 a year. Just to survive!
I just don't understand how anyone can beleive that those kind of money can be made on service&support and bonds like in this case.
If you spend X amount of money doing something you must make atleast X amount of money on it. Simple as that!
If you give it away (as in open source), there is no way people are going to give you this kind of money.
That the software has the source with it is not much of a problem, that people can modify isn't either. BUT, that people can redistribute it however they want to is.
Not a terrible idea (Score:1)
Re:Possible loophole (Score:1)
About the lead identification (Score:1)
It is my experience potential buyers of big software projects go out of their way _not_ to show to the developing firm their eagerness for this software. Let it be clear I am not talking about software products being sold to thousands of customers, I'm talking about software that is being developed for just a small potential market, possibly just a few interested firms.
Might it not be better for this small group of potential buyers to not reveal too much of their eagerness to buy a certain product?
Re:What's in it for me? Nope, for us! (Score:1)
On the other hand, if you are implying no money can be made buying these bonds, I beg to differ. In a well-functioning market, the price of a bond will reflect the potential gains of investing in this bond (taking into account risk of investing in this particular bond).
Great in concept... (Score:1)
alternative idea (Score:1)
You have a general fee that companies and individuals could pay to be on an "all you can eat" subscription plan where they can use any software produced by such a system. Everyone who subscribes can use everything produced by the system.
Each subscriber also gets a fixed amount of "voting rights", so they can reward anyone who has contributed. They can give their vote to whole projects, individual developers, or whatever they like. The votes are weighted, so a licensee can throw all their votes at one thing or divide them up among a bunch of things, that is their choice. There is also a system for proposing and voting for things you'd like to see developed.....this doesn't commit actual money, but lets people know whether their proposed project might go over well. Again the voting would be weighted.
Anyone can go ahead and develop anything they want, in hopes that someone will like it and send a vote their way. Then the subscription fees are divided up based upon how people vote. Some people may not get anything for their efforts, but at least their is the chance of making a lot of money if you do something that really is great.
The key is that 1) voting for project doesn't require you to pay more money, the amount you pay is the same regardless, and 2) the rewards are not given out until the project has delivered.
Re:the gpl is flawed (Score:1)
Re:Too complicated. (Score:1)
Obviously all those things already exist today, but for their next generation (and for new stuff that hasn't yet been thought of), why not have a system that rewards people for their effort, and keeps it open so anyone may contribute/improve upon it? Best of both worlds. And its only complicated if the voting system is done poorly. (I'm sure many people see slashdot's moderation system as too complicated...but it seems to work)
This won't work. (Score:1)