Rails - Jan 2007 - OT: Open source business models

I''m posting this here because it involves a real project that
I''m
starting that uses ruby and rails.  The project should work fairly
well as a commercial enterprise using a model similar to Mysql or
Redhat.  There are options for hosting the software, support services,
customization, etc..

I''ve also been thinking about using a non profit cooperative business
model.  This appeals to me for a few reasons.  First, I think the
combination of a great product, open source, and non profit might be a
really good marketing angle.  Not that it wouldn''t also be a great
value, but face it, you have to do something to get noticed now days.
Second, I hate the pressure that investors put on a company to do
things that are not in the best long term interest of the company,
it''s founders, or the customers.  I came from a company that self
destructed because they focused more on what investors would think
then what customers think, and I''m looking to get as far away from
that approach as possible.  Also, I think people like transparency and
honesty, and I think the cooperative structure encourages that much
more than a typical corporation.

The first challenge though is how to fund a non profit?  My first
thought was to get a small group of companies that would benefit from
the project and have them provide some initial funding, or even donate
some development resources.  The other challenge, and the biggest one
IMO, is how to attract smart people to come work with you.  Why work
for a non profit when you can go to some other startup and get shares
that might make you rich?  While a non profit can certainly pay
bonuses based on performance, it can''t leverage stock like a
corporation can.  Most startups pay a decent wage, but it''s the stock
options that really give you the leverage early on to attract the best
people and pay them later.  There is absolutely nothing wrong with
that, it''s what entrepreneurs do every day, but it''s not an
option for
a non profit.


Thoughts?

Chris

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A non profit should really be some kind of charitable organisation.
Working to help others in some shape of form. And the funding should
come from foundations, grants, etc.

In Europe there''s a lot more access to public funds than in the US.
Thinking back to when the NEA got axed, for example.

To attract good people, there needs to be a good idea and a raison
d''etre. Something to tempt people away from the big bucks and into an
organisation that they believe in.

I''ve been a corporate hack, on and off, for eight years and am sick of
it. At this point in life, I''m not driven by making wads of cash -
though I''d never turn it down! Having a bulging bank acrount really
hasn''t helped my well being, though it''s been a boost for
enjoying
extravagant hobbies.

Perhaps a millionaire with philanthropic intentions could get excited
about backing a sustainable business model that aims to contribute to
something that our society is really lacking.

I think the key is "how can we leverage our tech skills to do
something good in the world" as opposed to "let''s make a
cooler
version of xyz that nobody really needs, but we want to do it anyway".

My random thoughts, i.e. the kind of thing I''m looking to get involved
in...

Toby

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