Open Data Business Models - OSCON 2011

Open Data BusinessModels for Hackers Luke Closs - OSCON 2011 @lukec

Lets unpack that title!• Open Data • World Readable (& re-usable!) • Open formats • Open licences • Trendy!

Lets unpack that title!• Business Models • Designs • Making projects ﬁnancially sustainable • (or thrive-able!)

Lets unpack that title!• Hackers • Awesome citizens who make stuff! • This talk is not for MBAs.

This talk …• … is to help hackers• … think about business models• … suitable for open data projects

But ﬁrst, a story!

VanTrashSaving Marriages one garbage day at a time.

The story of VanTrash

June 11, 2009Open Web Vancouver

I Met David Eaves

I Met David Eaves• twitter.com/daeaves

I Met David Eaves• twitter.com/daeaves• Open data advocate

Talking about: O3

June 29, 2009 Blog Post

“How Open Data even makes Garbagecollection sexier, easier and cheaper”

A side-note:• Vancouver has confusing garbage schedules• Everyone’s day moves forward every holiday• Canada has lots of holidays• Every other week is green bins

Time Passes

Community collaboration event (AKA a code sprint) (AKA a hackathon) (AKA drink beer and make cool things)

Super HappyHacker House (#2)

Kevin Jones

Kevin Jones• @kevinj

Kevin Jones• @kevinj• co-worker, friend

Kevin Jones• @kevinj• co-worker, friend• not in a boy band

“Hey Kevin, this can’t be that hard ...”

... hack hack hack ...

Fast forward a few months Make it work in Internet Explorer (ugh) ...Add logging, backups, metrics, feedback, error reporting, email system, administration features ... 347 commits later 142 ﬁles changed, 19624 insertions(+), 644 deletions(-)

VanTrash API• Leave the data better than you found it• HTTP (REST) interface• Provide garbage API for other projects

VanTrash SMS (Text Messages)• Wanted to add SMS notiﬁcations• BUT • We do not wish to support incumbent mobility companies in any way.• Decision: Focus on Twitter instead

Technologies• Perl - all server-side development is in Perl • CPAN++ (Geo, ICal, Polygons, Scraping)• Javascript - frontend is all in the browser • Uses REST/HTTP to talk to the server• Android - mobile platform of choice

Licensing• Server-side code is completely open • Perl Artistic License or GPLv2• Javascript and Images are Copyright• We could prevent garbageday.ca from taking our work w/o permission• OK initial balance, would change long term

Motivations• Be a good citizen, leadership by example• Show Gov’t, Business what nice, simple APIs look like• Help our neighbors• Learn, take a project start-to-ﬁnish• Have fun

Epilogue• Vantrash ran for ~20 months with no problems. Ideal!• Thousands of users, word of mouth marketing only.• Receive LOTS of praise from friends, family & strangers• It’s genuinely useful!

But …

How could we bring this to moar ppl?

Ideas to make it better• MOAR cities• MOAR notiﬁcations (Text / Voice call)• MOAR value to municipalities

Paradox

Cities will only embraceour tool if they pay us to do so.

If we’re providing value to citizens …

Maybe we can start a (micro) business?

BM Gen• Patterns & framework to understand & design business models• “A startup is a company in search of a business model.”

The Canvas• A visual framework for exploring aspects of a business model

Cost Value

Walkthru

Text• Citizens? - Parents? - Drinkers?• Governments?• Businesses?

• Make life easier?• Do things cheaper?• Make better decisions?

• Social Media (Tweeter, FB, …)• Municipal / Gov’t conferences• Business conferences

• Self service - web / wiki / forum / email

• App store sales?• Subscriptions for services?• Municipal contracts?

• Hackers• Servers• Coffee?

• Feature development / maintenance• Support• Sales / Marketing / Communications

• ISP / Hosting?• Open Data advocates?• Municipalities?

• Hosting?• Financial infrastructure (accepting moneys)• Your time?

The Book• Business Model Generation• (It’s visually beautiful)• Techniques for brainstorming, analyzing, testing business models.• Buy it!• businessmodelgeneration.com

What business modelswould work for VanTrash?

My BM Gen Process• Brainstorm every possible detail/idea• Stare at it• Split into distinct business models• Compare / Contrast• Try, blend, iterate!

VanTrash Models• We came up with these options: • Sustained by citizens • Sustained by municipalities • Infrastructure as a Service • Public Open Source Service

Sustained by Citizens• Provide basic service for free, charge for enhanced services (SMS / Voice)• Citizen not willing to pay too much• “Freemium”

Characteristics• Requires marketing, but no sales team• Requires many paying citizens• Hard to market to target customers • Non-techie citizens• Easy to execute, few barriers

Sustained by Municipalities• Provide services to citizens for free, city pays for infrastructure costs• Not incompatible with “Freemium”• Value is more towards reducing costs• Municipal ads & admin features

Characteristics• Sell to Municipal decision makers• Looong (long) sales process• Administration features needed• City handles marketing to citizens• Too cheap for cities to buy

Infrastructure as a Service (IaaS)• Offer tools to run VanTrash as a service to others• Let hackers in other cities easily create their own• Common infrastructure saves time

Characteristics• Very little marketing / sales needed• Hackers localize the service for their area, market it to their citizens• Money from any party that wants to set it up• Too niche?

Public Open Source Service (POSS)• Idea: poss.gliderlab.com @progrium• No proﬁt incentive• Citizens collectively pitch in to cover costs as needed• Donations => Account => Hosting fees• $$ / run rate = months of service

Characteristics• Content to be small• No $$ motive to expand, enhance• Good model for established infrastructure that can be run cheaply & is hard to accept money for

Introducing Recollect.net

Recollect’s B-Model• Free for web/email/twitter/ical• Citizens pay for SMS & Voice reminders• Municipalities pay for ad space, administration, extra features• Custom features for $$$

Initially …• Fuck the gov’t, they’re too slow!• Citizens can sustain us!

Weeks go by …… maybe not

Later …• We gotta get municipalities onside • Make it “no-brainer cheap” • They advertise it to their citizens• Some citizens pay for extra services

Finding Balance• Knowing the models we can evaluate the tradeoffs• Listen to your customers• Try things, don’t be in a rush • Need to be lean to not be rushed

Other Open Data Companies

SeeClickFix• Bugzilla for Cities• “Sustained by Municipalities”• Charge cities for admin features, branding, customization• Around $100 / 100K citizens / month

Morningstar• Started out scraping printed SEC reports• Figured out how to use that public resource better than anyone else• Started rating Mutual funds for 401ks• Now they are a huge company

How to do it.

How to do it.• Hack cool things with open data

How to do it.• Hack cool things with open data• Let people use them, be patient

How to do it.• Hack cool things with open data• Let people use them, be patient• See what has value

How to do it.• Hack cool things with open data• Let people use them, be patient• See what has value • … Value to citizens

How to do it.• Hack cool things with open data• Let people use them, be patient• See what has value • … Value to citizens • … Value to governments

How to do it.• Hack cool things with open data• Let people use them, be patient• See what has value • … Value to citizens • … Value to governments • … Value to organizations

Business Sustainability• Is there relevant data?• Is there demand?• Can you generate $$?

Lessons Learned

Lessons Learned• Municipalities are slow

Lessons Learned• Municipalities are slow• Municipalities don’t want to be ﬁrst

Lessons Learned• Municipalities are slow• Municipalities don’t want to be ﬁrst• It’s not cheap to accept money on the internets.

Lessons Learned• Municipalities are slow• Municipalities don’t want to be ﬁrst• It’s not cheap to accept money on the internets.• When you don’t have VC, you can run on your own (slow) schedule.

Breaking Dependencies• Turned off vantrash.ca, redirects to Recollect• Got email yesterday from City 311 staff! ZOMG!• But we use your site! • OK, we can help you! ($$)• Unintentional catalyst!

… In Conclusion

… In Conclusion• Brainstorm about how to charge for that value

… In Conclusion• Brainstorm about how to charge for that value • Given your skills, time, capabilities

… In Conclusion• Brainstorm about how to charge for that value • Given your skills, time, capabilities• Narrow down to speciﬁc experiments

… In Conclusion• Brainstorm about how to charge for that value • Given your skills, time, capabilities• Narrow down to speciﬁc experiments• Try them out.

Thank You!• Contact me - lets talk about open data ideas! • Twitter - @lukec • luke@recollect.net• http://www.BusinessModelGeneration.com/

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Open Data Business Models - OSCON 2011

by lukec on Jul 29, 2011

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Open Data Business Models - OSCON 2011 — Presentation Transcript