12 Replies - 3371 Views - Last Post: 03 August 2012 - 12:37 PM

#1 Choscura  Icon User is offline

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New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:32 PM

I had this idea a month or so ago and have been sitting on it, trying to think through use cases to see if it would work. It seems like it should; if it doesn't, you guys should be able to poke holes in it, and if it does, maybe somebody here might find it useful too!

The basic idea is to award a percent of value created by somebody's work in perpetuity, or for example, if you make a program that a company uses and they make 100 bucks a day on it, you get some portion, eg 10 bucks, of that hundred bucks per day for as long as they're using it.

This means that a dumb company which makes everything proprietary will continuously pay the same guy for the same work; in this way, I like this business model because it weeds out tards.

If a company open sources a program /etc that is implemented like this, however, it is continually paying the same amount for an ever-improving program; and the people who did the groundwork are still getting a portion of that, too.

This seems simple enough to me, at least the concept of it (not sure how I'd implement it- maybe a refactoring tool to look at how much an individual function is run, that cross-references that with a repo log or something).

Thoughts?

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Replies To: New Idea for an Open Source Business Model

#2 jon.kiparsky  Icon User is online

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:34 PM

The big problem I see is judging the "value created". How do we accomplish this?
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#3 DarenR  Icon User is online

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:40 PM

Actually John that is exactly how my company works. The Analyst that designed our main app has the "core" patented and copywrited. Having done that he makes 35% of the revenue produced by the app while in use at this company.
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#4 no2pencil  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:42 PM

The bigest problem that I see is untaxed funds. Who's going to track all of these financial transactions? State to State, out of country, vat tax? pffft. No thanks!
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#5 jon.kiparsky  Icon User is online

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:42 PM

Yes, works fine when you're in a proprietary model: you're selling it and tracking revenue.
More difficult in an open source model, where you've taken market signals out of the picture.
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#6 supersloth  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:53 PM

i believe the function i wrote is worth 99% of your revenue.
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#7 lordofduct  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 12:58 PM

int Main()
{
    cout << "Give me all yo' money";

    //put your program here
}



I haz my money now?
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#8 Choscura  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 01:54 PM

Cool, replies!

Wow, good ones!

@jon.kiparsky, "Value Created" can be measured in a few ways; by how much is saved that would otherwise have been spent, by how much revenue increases in relation to how much X is used, or some easier metric- how many new customers, cheaper production, higher customer retention, higher sales, etc. or maybe a new feature is ordered separately, or something like that. non-code example would be making an awesome TV show for a network that people buy as a standalone rather than subscribing to the network (eg, what some people are trying to do with Game of Thrones).

@DarenR Awesome!

@no2pencil This is the kind of problem you could solve in a programming 101 java class by the end of a semester, or at least have a working solution to for the most readily available data sets.

@jon.kiparsky (proprietary / open source market tracking post): this is an excellent point, but one that could still be solved by letting everyone do everything, and letting everyone only pay for the parts that they're using.

@supersloth Furiously?

@lordofduct Good point, divide it up by line, or even finer than that, by declaration/call/etc. Also worth mentioning is that this is the kind of thing that would be jealously taken out by the next person to read the code, in order to keep parasite calls out and increase their own revenue.

This post has been edited by Choscura: 02 August 2012 - 01:58 PM

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#9 Skydiver  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 05:10 PM

Actually supersloth has a point. Some functions are the hotspots of a program and have the key algorithm in them. Imagine the recalc engine of a spreadsheet. Imagine the encrypt() and decrypt() functions of a secure banking system.
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#10 Choscura  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 05:52 PM

Fucking well furiously. Well done, sloth, and thanks for smacking me upside the head with it Skydiver.

Hmm. My first thought, then, is to determine the value a function has each time it's called (on average- and this can be continually recalculated, maybe, or updated regularly), and award value according to that- and apply the same basic thing to loops, figure out how much it's worth to run a loop through successfully, et al.

The encryption example you gave could fit into this as a 'necessary component' for the things that interact with it directly (or in accordance to how directly they interact with it...it might be second-order or third-order interactions that do something, like dominoes), and either have an arbitrary proportion reserved for 'important bits', or find some logical way to calculate how valuable a given important bit is by comparing it to a less effective version of itself (rather than to the absence of itself).
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#11 Skydiver  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 07:25 PM

And how do you reward the poor game designer(s) who spent hours poring over the spreadsheets trying to get the game balance right for games that Rock-Paper-Scissors types units like Starcraft, Age of Empires, etc? They don't write a line of code, but the magic numbers they tell the developers to use to set an the armor, damage, and speed values for the units are what gives you a winner like Starcraft and Age of Empires, and losers where people say that "the game isn't balanced".

Just pay the designer a salary until their employment ends, while the junior level developer who mindlessly typed in the numbers gets x percent of the profits in perpetuity?
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#12 jon.kiparsky  Icon User is online

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Re: New Idea for an Open Source Business Model

Posted 02 August 2012 - 07:28 PM

View PostChoscura, on 02 August 2012 - 07:52 PM, said:

Hmm. My first thought, then, is to determine the value a function has each time it's called (on average- and this can be continually recalculated, maybe, or updated regularly), and award value according to that- and apply the same basic thing to loops, figure out how much it's worth to run a loop through successfully, et al.

The encryption example you gave could fit into this as a 'necessary component' for the things that interact with it directly (or in accordance to how directly they interact with it...it might be second-order or third-order interactions that do something, like dominoes), and either have an arbitrary proportion reserved for 'important bits', or find some logical way to calculate how valuable a given important bit is by comparing it to a less effective version of itself (rather than to the absence of itself).


Can you maybe sketch out how this might work in practice? That would probably help all of us - at least, I'm pretty sure I have no really clear idea what you mean.

Would you need a new license, in order to charge for the software? Or where does the money come from?
That might be an interesting place to start.
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#13 Choscura  Icon User is offline

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Re: New Idea for an Open Source Business Model

Posted 03 August 2012 - 12:37 PM

I'm trying to think of how to describe this in simpler terms, but here's an attempt for now. Keep in mind that when I say "they pay a percent" below, I mean that they pay a percent in perpetuity.

A company has a program that makes money (eg, online store). they open source the program: Dave creates an affiliate marketing expansion, which earns the company a specific amount of money. The company examines this, concludes that it is indeed awesome and Dave does indeed kick ass, and awards him some percent of the profits (not the gross income, but the profits after all costs have been calculated) resulting from the adoption of that expansion.

Jim comes along, finds a security hole in Dave's affiliate expansion, and fixes it. Dave's expansion now has less fraud, earns X more and saves X by catching attempted fraud more effectively. The company examines this, concludes that it is indeed awesome and Jim does indeed also kick ass, and he is awarded a percent of the profits ( after all costs/expenses have been accounted for ) for fixing the security hole.

Dave gets drunk, adds an expansion that turns the screen green whenever the letter 'g' is typed; The company gets complaints, traffic dips, sales decrease. The company concludes that Dave is a prick, reverts to a previous version, and temporarily decreases the amount that Dave earns from his affiliates expansion to cover the losses he created when he got drunk and acted like a prick; he'll earn the same amount again when he's paid off his debt.

A competitor finds the software and implements it; They earn X from the online store and Y from the affiliate expansion, and they pay a percent (set by the company, since they are the original authors) on that income in order to use the software; a percent of Y goes to Dave for the affiliate marketing expansion, and a portion of that goes to Jim for fixing the security hole.

Another competitor implements an old version of the software; they're cheapskates and don't pay anything, so they can't get the current version.

...

The license is going to take some thought. I was kind of considering amending some payment stuff to the end of a standard open source license, maybe GNU or something like that, not sure if that will work now, looking at this. Part of it sounds like Red Hat / Fedora, however, so I think it's at least worth examining.
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