Monetizing Projects

R_J · January 2014

Yesterday I had time to surf around the web. In fact, I was doomed to do anything that keeps me awake the whole day while I was on a training...

I had to think about Flattr, a micropayment service that lets you donate a given amount per month. If you decide to donate 5$/month, your 5$ will be split between everybody, whose flattr button you have pressed. Downside is, that you can only donate to people that show a flattr button anywhere (in fact there are other ways, too, but they look very clumsy).
Flattr takes a fee of 10%, and works with PayPal, what might cost additional fees, not sure about that.
So I thought it could be cheaper and that's why I started looking for alternatives. Here is what I've come up with: https://snowdrift.coop/p/snowdrift/w/othercrowdfunding

This is not the list of micropayment services I was searching for, instead it's a list of payment services that are able to monetize a project/developer. As far as I understood, the list was created by a company that wants to start just another crowdfunding platform so the comments might be subjective. The services in the list are introduced in the following categories:

Threshold: work will be done after a given sum is collected
Bounty: payment is done for the first one who solves a given task
Ransom: closed source is released to OS for a given amount
Subscription: pay someone on a regular basis because you expect new whatsoever from him
Donation: just give money and that's it
Tipping: a more symbolic way of donating (Flattr is in that category)

I thought it might be an interesting reading for the developers here because it shows some possible ways on how to get money for projects.

Btw.: now that I've read about all those other articles, I still like the way flattr is working best and that's why I will start flattr'ing content as soon as possible

hgtonight · January 2014

Gittip is pretty much the only other site I have heard of on the list.

This is a very informative page!

businessdad · January 2014

As someone who has interest in monetisation, I stopped using Flattr, as even the effort of putting the button somewhere was not repaid by the (non-existent) tips.

Regarding the other solution, here is my personal view on them:

Threshold: if I'm not mistaken, it worked once on this community (Poll plugin), but it's not always optimal. It may take too long to reach the threshold and the developer, or requesters, may lose interest in it.
Bounty: I doubt it would catch up. As a contributor, I'm not eager to compete against others to "arrive first".
Ransom: currently ongoing for the CMS plugin. The drawback of such approach is that, if amount is never reached, the work done is not released and, therefore, nobody can benefit from it (including the author, who doesn't get feedback). If project is released even if the amount if not reached, then the whole "ransom" idea loses credibility (i.e. "I won't pay, they will release it anyway").
Subscription: it's a good commercial system, as long as the seller produces enough quality products to justify its cost.
Donation: put simply, it doesn't work. Very few users donate something, just ask @peregrine about it. Note: this doesn't only apply to Vanilla Forums. I released some donation-based products elsewhere, which are designed to handle payments (i.e. they are definitely running on a money making website, and they help collecting such money) and I never received a single donation.
Tipping: same as donations. Also, there's the chance that the amounts may be insignificant.

I also would like to add the "premium downloads" option to the list. It works for some platforms, but not much for Vanilla Forums, because the market is still too small. Most paying customers, if not all of them, move directly to the hosted solution, rather than paying themes, plugins and so on (if I needed a forum with complex features, I would also choose the hosted solution, as it's good value for money).

Perhaps there is a reliable solution for monetisation, but I'm still looking for it.

peregrine · January 2014

@businessdad said:
As someone who has interest in monetisation, I stopped using Flattr, as even the effort of putting the button somewhere was not repaid by the (non-existent) tips.

Regarding the other solution, here is my personal view on them:

Threshold: if I'm not mistaken, it worked once on this community (Poll plugin), but it's not always optimal. It may take too long to reach the threshold and the developer, or requesters, may lose interest in it.

true.

Bounty: I doubt it would catch up. As a contributor, I'm not eager to compete against others to "arrive first".

yes, that would be a non-starter. the idea is not a competition, nor should it be a timewaster for developers.

Ransom: currently ongoing for the CMS plugin. The drawback of such approach is that, if amount is never reached, the work done is not released and, therefore, nobody can benefit from it (including the author, who doesn't get feedback). If project is released even if the amount if not reached, then the whole "ransom" idea loses credibility (i.e. "I won't pay, they will release it anyway").

the other problem here, if it drags on for many, many months, the original pledgers, may no longer be available, switched, to something else, or changed their minds. At some point, you may need to decide to release it, even if your goal is not met, or the original pledges may dry up. and hope that after release, that donations will make up for the desired "Bounty" not being met in full.

Subscription: it's a good commercial system, as long as the seller produces enough quality products to justify its cost.

if

Donation: put simply, it doesn't work. Very few users donate something, just ask peregrine about it. Note: this doesn't only apply to Vanilla Forums. I released some donation-based products elsewhere, which are designed to handle payments (i.e. they are definitely running on a money making website, and they help collecting such money) and I never received a single donation.

It is not a way to get rich, that's for sure. But there have been a number (not provided) of good people on this forum who realized the value and decided that "buying someone a coffee for their efforts" is worth the added future value of getting more plugins and perhaps better answers to their questions, etc. There will always be people who will just take and expect more and more, without ever saying thank you or sending in a donation or reciprocating in some fashion. The way I figure it, anyone running a forum should and could have the means to buy a few people a "cup of coffee". There will always be people living off the back of others with no intent of ever making a contribution to society or anywhere, unless they have to.

I guess it gives the developer a chance to post a plugin they think might serve the community and perhaps get something back from users who might decide to skip in indulgence (skip their own coffee for a day or two and send it to developer) for themselves and make a donation to the developer

Tipping: same as donations. Also, there's the chance that the amounts may be insignificant.

Although $5 becomes $3 or $4 with paypal it is better than nothing.

I also would like to add the "premium downloads" option to the list. It works for some platforms, but not much for Vanilla Forums, because the market is still too small. Most paying customers, if not all of them, move directly to the hosted solution, rather than paying themes, plugins and so on (if I needed a forum with complex features, I would also choose the hosted solution, as it's good value for money).

yes, I don't see premium downloads of plugin as much as a viable feature with respect to making income.

Perhaps there is a reliable solution for monetisation, but I'm still looking for it.

me too.

Linc · January 2014

My stance remains: Find ways to monetize your forums, not the code you write to make it awesome & profitable. If you want to monetize PHP code, build a service.

R_J · January 2014

There is a service that offers the Bounty solution for GitHub issues. I really like the idea of giving an amount for solved issues. Yes, if more than one developer is working on one and the same issue and they are racing each other, it would be a waste of resources. But imagine you will get 5$ for each pull request for an issue of Vanilla milestone 2.1 Even if that will not make anyone a rich man, I think it could be motivating.
Those issues will be fixed anyway, but if you do not want to wait, why not prioritize "your" issue by promising just a small amount of money? It must not be much. A quick "I take the challenge" as a reply to the offer will stop developers taking a raid for the bait.

Linc · January 2014

There's actually research that indicates introducing monetary rewards into a community poisons the whole concept of open source / common good. That's why I don't favor most of the techniques described.

R_J · January 2014

@Lincoln said:
There's actually research that indicates introducing monetary rewards into a community poisons the whole concept of open source / common good. That's why I don't favor most of the techniques described.

You are right: that's most motivating for me =>

peregrine · January 2014

@Lincoln said:
There's actually research that indicates introducing monetary rewards into a community poisons the whole concept of open source / common good.

I don't doubt it, and i don't dispute it. On the other hand....

there is research that says coffee is good for you and there is research that says coffee is bad for you.

My opinion donations is the best way. the plugin gets made the source is available, and people have the ability to show gratitude with a bit of money towards the developer actually improves the open source.

That said, i wonder if the addition of a few of people on the forum who are hoping to get donations by writing plugins and helping with answers has actually improved vanilla forum here. And has there been research if this has actually been an indirect benefit to vanilla.com as well by spreading the potential usefulness of vanilla to people who don't host on vanilla.com

I wonder if there is similar research on use of badges and reactions poisoning a community as well. I know there was an article about gamification enhancing things, but there is probably something written somewhere that says the exact opposite.

I am also extremely appreciative that the vanilla developers have allowed us (developers) to put requests for donations in plugin descriptions and other areas of the forum. As well as allowing us to say we will write a plugin or theme for a pledge.

I am also more inclined to put an hour into something trying to solve someone's problem if they have sent me a donation for a previous plugin. I always try to answer a question if I know the answer whether person donated or not, so my answers are not ransomed. But I do try to make an extra effort if I can to those who donated.

vrijvlinder · January 2014

I like RJ's idea of a fund. I have a plan to give Vanilla T shirts to people who donate to the developer fund.

Asking for a donation or a tip or whatever you want to call it is fine by me as long as the exchange is equitable. For example, from my experience I know donating to peregrine for the development of plugins is a profitable one. Because not only does he develop healthy working and useful plugins, but also modifies them per user request. He also fixes other plugins and offers help in a magnanimous way.

It costs money to test and develop software. You need equipment, internet access etc etc.
Asking for a donation is not milking the cow for free. It is fair specially if you need the money to survive.

Open Source does not mean it is altruistic does it ? Maybe in a romanticized view of how the world works.

Poisoning the the whole concept of open source / common good.

Does it imply that unless people renounce to their livelihood they are not truly contributing for free to the betterment of software with which others will benefit from it's use ?

I would think that this poisoning would only apply to those who benefit financially from the work of others .

vrijvlinder · January 2014

I like the site Kickstarter, maybe because of the way it looks but you can find funding for just about anything this is for open source software projects

http://www.kickstarter.com/discover/advanced?category_id=51&sort=magic

The idea is that by exposing your project to the whole planet, you have a bigger chance of collecting the funds needed to get the project off the ground.

It is the new way to get funds. Or beg for money however you want to look at it. Hustling has now become crowd-funding . It is a brilliant idea

vrijvlinder · January 2014

Lol as I researched Lincoln's claim about microeconomics I found this study , here is a funny excerpt right in the intro. The psychology sounds backwards but humans are strange...

Contrary to what you would expect based on a standard introductory text in microeconomics, if you pay a person more for doing a task, she might be less willing to work on it, she might be less productive given her efforts, and she may enjoy the task less. If you start charging a fee for something, more people might start doing it.

http://faculty.chicagobooth.edu/emir.kamenica/documents/behavioralIncentives.pdf

Here is a paper on the same subject this part caught my eye on page 193

Titmuss (1970), who argued that paying people to donate blood broke established social norms about voluntary contribution and could result in a reduction of the fraction of people who wish to donate.

Using blood donation as say open source development in this case. I think what Lincoln is referring to this part. People who donate their skills to the cause of open source development would be less likely to donate their coding skills if they were to receive payment for the work .

Or would be less likely to contribute.

This paper also illustrates the correlation between higher pay more effort.
People do measure their worth and evidence this by their motivation towards a project. If they don't choke under pressure.

Monetary incentives have always worked to grease the wheels of progress ....

http://management.ucsd.edu/faculty/directory/gneezy/pub/docs/jep_published.pdf

Linc · January 2014

I was specifically referring to the idea of "5$ for each pull request" (the central idea of the post preceding mine) as being poisonous. Core issues are clearly a common-good issue (not to mention that all pull requests are not created equal). Monetizing it would scuttle the entire idea.

I don't think pressing the issue of whether you are receiving donations at the level you expect for your addon is helpful to anyone's long-term interests, but I don't really care about it, either. Certainly not enough to label it poisonous.

vrijvlinder · January 2014

I see , in that scenario the incentive to get more code out of people does not necessarily translate into better code. A Result of The watered down quality from an unfocused incentive ?

My scenario deals with the contributions on top and as an extension of the source ie add ons . Yes.
The main issue I see is with being able to quantify the effort towards the quality of the input. If people are aware of these things they can better gauge their donation quantity. Like a tipping scale you use when figuring out the tip for a restaurant check.

A system that is based on reputation could help keep garbage at bay. As with everything . It is strange that people put more effort in when they have to pay to do it.

Instead of being happy to get paid they hate to work... But when they pay for having to do something they do it happily . Go figure...

So if this is true, then the ones that you want to be interested in working on a project are the ones that need to pay to be allowed to work on it in order to make them interested in helping or working on the project. Not the other way around based on the science behind human behavior....

Neither of these approaches will yield quality unless those who get involved are truly capable. Hence a method of screening candidates would be required.

hgtonight · January 2014

I contribute for a few reasons.

Gives me a creative outlet for making software that I use to socialize
I get to make the software I use better
Helping other people gives me the warm fuzzies

I do put up donation buttons in most of my plugins. The donations I have received have always been unexpected and generous. I wouldn't be able to make a living off the donation model, but I would be able to pay for hosting costs if I had to host them myself.

As long as the community supports (or at the very least doesn't discourage) monetizing addons, I don't see a reason to complain about any of the mentioned fund-raising tactics. It would be beneficial to develop some common sense guidelines for users seeking to monetize. They may ignore it, but at least it would be a touching point for the whole community.

Keep being awesome and I will stick around.

vrijvlinder · January 2014

Helping other people gives me the warm fuzzies

I knew it !!! you are a softy

Monetizing Projects

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