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View Full Version : Keeping the momentum (monetization thoughts)



San
14 Feb 2007, 1:13 AM
Jack,

There are a few hundred startups here in Silicon Valley that would _love_ a decent free web widget toolkit (scriptcrapulous, dojo, and jquery aren't it).

I've been reading some of the monitization notes with interest.

Paying $$/per-site is a non-starter for these companies. MySQL/Postgres are free, Rails and Django are free, PHP is free, java is free, Eclipse is free. These startups launch sites on no-budget except for their time. They'll probably opt to struggle with free solutions even if they're lesser just to save the cash outlay early on.

I think charging for widgets is also likely to slow the growth of a contributor community around Ext. People are not going to be incentivized to create new widgets if the Ext team are the only ones making money.

You've probably seen all of these, but just for the sake of framing - here are some approaches taken by other groups:

*) The mysql/ubuntu model: charge for support (large companies with real revenue will pay).
*) The 37signals model: Give away the toolkit and go build a web service or two that generates monthly income
*) Linux: create a huge community and the opportunities present themselves.
*) The Caucho model: charge for a deployment license, but only those companies that have real revenue (let startups get a free ride until they have money in the bank). (note Caucho has a teensy amount of market penetration).

I've seen some discussion about what other 'widget library' companies are charging. I wouldn't get too caught up with replicating the biz models of the widget makers. my guess is their balance sheets aren't going to impress you.

My main suggestion is to create a huge community, make it viral (the more consumer sites that have yui-ext will cause others to want it and spread), create a consulting group, offer commercial support packages, and be very startup friendly. Getting a 2% conversion of a community of a hundred thousand is probably a lot more money and fun than having a community of hundreds with a 10% conversion rate and having to pay salary to motivate your contributors.

What I'd hate to see is the scenario where Ext starts charging per site, the team makes a small bit of cash, the community stalls, and Jack decides working on other projects is more worth his time.

You clearly have the talent, I'd love to see what you could do with a massive community behind you. I only heard about YUI-ext 2 days ago and I'm usually an early adopter - I can only imagine how large this could be in 1 year if it remains free and spreads to commercial sites (as you know Rails, Django, Cake/PHP, etc. all are painfully in need of a decent free Javascript UI/Widget kit).

If nothing else, I'd vote for creating a yearly commercial support license as a first step and seeing how many larger (well funded) companies can help foot the bill.

San

San
14 Feb 2007, 1:18 AM
Ack, meant to attach that reply to the licensing thread.



There are a few hundred startups here...

San
14 Feb 2007, 4:34 AM
And speaking of keeping things going. I just added something to the Ext tip jar. Have a nice dinner for you and the wife on Us!

Webnet
14 Feb 2007, 8:36 AM
http://www.invisionpower.com

Invisionpower followed this model, offering their forum software entirely free and only charged for support. With this model, you will have income from those who see/use your software and are so obsessed and thankful for it, that they will purchase a lisence (which basically just means support only) purely to proivde you with financial support. Once their forum software (The only product/service they had at the time) reached 1.3 they removed the free copy from the internet and only allowed for licensed customers to use the forum. Now, you search throughout the internet and constantly see forums using their software that is extremely outdated. Thus, it's less free advertising for them, because their forum comes across as outdated.

Today Invisionpower does not offer any downloadable free demo, they have spread their services to web hosting, and other forum modules which can be purchased. Their forum is only free if you purchase the web hosting services. Now, the community has developed in stages:

1) FREE FORUM - A community of "fans" who contributed everything they could to the community. The company offered a free product for them, so they were giving back to the company.

2) CONVERTED TO LICENSED REQUIRED FORUM - Immediately the conversion didn't seem like that big of a deal. The community has simply diminished from this point to less of a community and more into a pure customer base, thus they get less technical feedback on their products. Also, immediately when this transition took place it didn't matter much, the latest software was 1.4 and people still had the free version (you could still download the 1.3 free version).

3) OUTDATED FREE SOFTWARE - Simply a pure customer base that provides "customer" feedback and less technical feedback on the software. Now all the community base that used that free product is either running outdated forums or has switched to another free forum, thus invisionpower has traded much FREE advertising for detrimental advertising.

Personally, I have lost interest in their company because they dont' give to the community as much as they used to.

A company/product can generally be judged based on it's community. A strong intelligent community can mean a strong efficent product.

yogurtearl
14 Feb 2007, 8:39 AM
I agree with San.
I think an open source license is key to the success of Ext.

A couple of models you could go with:

- pay for support
- pay for training
- pay for feature development (custom versions maybe)
- sell Ext base apps ( webmail, webcalendar, Database browser, bug/issue tracker )

I think the last option is your best bet.

If you are interested in a job in Southern California send me a PM.
I am suprised Yahoo! hasn't hired you yet. :)

Michael

PuritysDisciple
14 Feb 2007, 10:46 AM
I agree with an open source license. I guess it comes down mostly to two things:

some money now
a lot of money later

Really, if Ext stays free, the word of mouth and community marketing will grow it into the dominate library. It is already on its way there, as long as the development continues I can see Ext winning the JS Library war hands down. It is by far the most powerful, its only downfall right now is that its linked to YUI which, from my understanding, will not be an issue for much longer.

By going commercial, the community will die. It always happens t0 things that start free and then go commercial. Then people are not showing their gratitude, instead they are wondering why the next version isnt out yet if they paid you $xyz two months ago.

On top of that, the community is 100% free marketing. I know that every developer I know of has seen, and loves, Ext. Without the community the adoption rate will slow, and very quickly will stop in favor of other less powerful, yet free, libraries.


- sell Ext base apps ( webmail, webcalendar, Database browser, bug/issue tracker )

I dont agree that this is the best option to go with. Jack is amazing at coding and could probably decimate these projects, but while doing so, Ext isnt going anywhere fast. I say Support and Training fees are by far the best option. Not only will startups use them, but also commercial companies will be more likely to buy these than they would a DB Manager etc. Vs Microsoft's version of the same apps.

I personally hate MS's office and development products, but that is what the standard is for now, and as such makes it hard for large companies to sway from them.

vtswingkid
14 Feb 2007, 10:48 AM
I agree with open source license.

jack.slocum
14 Feb 2007, 1:00 PM
Thank you very much San. I will be posting a new thread momentarily (Part 2).

tedHusted
15 Feb 2007, 9:40 AM
You've probably seen all of these, but just for the sake of framing - here are some approaches taken by other groups:

*) The mysql/ubuntu model: charge for support (large companies with real revenue will pay).
*) The 37signals model: Give away the toolkit and go build a web service or two that generates monthly income
*) Linux: create a huge community and the opportunities present themselves.
*) The Caucho model: charge for a deployment license, but only those companies that have real revenue (let startups get a free ride until they have money in the bank). (note Caucho has a teensy amount of market penetration).

San

I'd suggest combining the approaches of Spring and Dojo.

The Spring lead created a consulting and training firm to support Spring (Interface21). The agency is strongly coupled to the open source project, but it is still a distinct entity.

Dojo created a non-for-profit corporation to hold the code, based on the Apache Software Foudnation's model. A non-profit entity makes it easier for corporations to make donations, and it creates a legal buffer. More importantly, it clarifies exactly who owns the code. People who want to help file "Contributor License Agreements" with the project, so that there is no mistake they they are granting a non-exclusive copyright and any patent rights to the project.

I can tell you that when corporations adopt open source these days, many are very conscious of the providence of the source. Without Contributor License Agreements from everyone on file, the ownership of the codebase is fuzzy. One reason the ASF has such wide acceptance is because the foundation takes licensing and code ownership very seriously.

I can see from the other threads that a community is starting to coalesce around the product. Keep that going by making a clear distinction of where Jack Slocum ends and YUI-EXT begins. Another place where Dojo and the ASF excel is that the products are perceived as group efforts, and not the brainchild of a single personl, who may lose interest or be hired away.

-Ted.

MrKurt
15 Feb 2007, 9:55 AM
The open sourced 37 Signals stuff isn't really a good basis for something like this. Their product was never Rails, their product was consulting and has become hosted applications. Open source for them isn't any kind of revenue stream, it's a way of getting more out of their tools of choice than they could build on their own.

They still do a large amount of actual Rails development, but user contributions make it a much more solid piece of code. Given that their applications are all built on Rails, they get a dramatic amount of benefit from having it out there and letting people build on it.

The real money for companies with open sourced products is consulting. Everyone who's making money with Linux is doing some kind of consulting, or offering a product built on top of it. I suspect MySQL makes most of their money off consulting of some kind (even support). The problem with consulting is that it takes away from actual product development.