Financing freedom section1.02

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This is the second iteration of my Financing Freedom tutorial. I'm using lean publishing to deliver the highest quality of training possible. This revision contains some quantatative numbers supporting some of my assumptions.

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Financing freedom section1.02

  1. 1. How to organize and fund free culture projects Kevin Shockey Founder, Mis Tribus
  2. 2. What?Free culture projects often fail due to a lack of resources.
  3. 3. So What? By focusing on raising funds,a project can increase its chances of survival
  4. 4. Why me? Freedom is not free!(How many ways can you relate?)
  5. 5. Why now?● Declining interest in FLOSS● Lack of unity, more division● FLOSS success is taken for granted● Increased willingness to compromise● Lingering confusion surrounding free software
  6. 6. DisclaimerIm not pretending to tell anyone what to do, Im sharing my interpretation. My story. (Your mileage may vary...)
  7. 7. So far...● Funding Free Culture: ● Blog: FundingFreeCulture.MisTribus.com ● blog.financingfreedom.com ● @ffc_2012 ● Tumblr: FundingFreeCulture.Tumblr.com● One Blogger post triggers: ● 3 Automated tweets on 3 different accounts ● Updated Linked In ● Updated Finding Free Culture Page on Facebook
  8. 8. Assumptions● Free Culture● Project Execution● Project Funding
  9. 9. Free Culture Assumptions● Free culture projects often fail● People assume FLOSSs success is guaranteed● Division makes free culture weaker
  10. 10. State of FLOSS?● Four stages of Maturity: ● Emergent ● Growth ● Mature ● Declining● Projects in emergent, growth, & maturity stages
  11. 11. State of FLOSS is mixed● Enterprise recognition● Limited user recognition/support● Participation is declining● Finances (resources) are limited (often to just one person)
  12. 12. Top 10 FLOSS Hall of Fame1. Linux Kernel2. GNU Utilities & Compilers3. Ubuntu4. BSD5. Samba (Top 10 Open Source Hall of Famers. (2009). http://mstrb.us/zjn6zK)
  13. 13. Top 10 FLOSS Hall of Fame6. MySQL7. BIND8. SendMail9. OpenSSH & OpenSSL10. Apache
  14. 14. Measuring FLOSS● Through search, Google Trends● Through search, Google Scholar● Through investigation, Mining SourceForge.net Repository
  15. 15. Search is relative● Search is a simulation; ● By measuring “reality” we affect reality ● It is a proxy, – We humanely can not understand the math involved – Artificial intelligence
  16. 16. What SEO Tells UsGeneral trends for mature projects
  17. 17. What SEO Tells Us
  18. 18. What SEO Tells Us
  19. 19. What SEO Tells Us
  20. 20. What SEO Tells Us
  21. 21. What SEO Tells Us
  22. 22. What SEO Tells Us
  23. 23. What SEO Tells UsGeneral trends for emerging projects
  24. 24. What SEO Tells Us
  25. 25. What SEO Tells Us
  26. 26. Academic Publications● Collected in Google Scholar Advanced Search● Parameters ● “Open Source” exact phrase all in title ● “Engineering, Computer Science, and Mathematics” subject area ● Year to Year (eg; 2012 to 2012, 2011 to 2011, etc.)
  27. 27. Open Source Academic Papers by Year900800700600500 Direct Results400300200100 0 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
  28. 28. “Open Source” vs “Free Software”900800700600500400300200100 Free Softw are Results Open Source Results 0 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983
  29. 29. Academic Paper Analysis● There is a possible peak, and downward trend for “open source”● Free software has not been researched much ● Out-published by a margin of 5 to 1 by open source.
  30. 30. Academic Paper Questions● Has research on “open source peaked?● Why isnt anyone researching “free software?”● Has “open source” obscured the importance of free software?
  31. 31. What Else?● Niche groups who are content with scratching their own itch ● Dogmatic approach to community● Financial support (donations, purchases, memberships) is lacking● Large difference between public relationship strategies ● Most successful projects use modern strategies
  32. 32. Project Execution Assumptions● Organizing a FLOSS project has changed.● FLOSS projects are similar to startups● Execution is achieved through testing assumptions
  33. 33. Project Funding Assumptions● Our software (product) is sufficient to obtain resources● There is an over abundance of data ● Varying levels of “information”● Increasingly interact with more artificially intelligent systems
  34. 34. State of FLOSS● Build Measure Learn or Your Competition Will ● Irrelevance is your enemy ● Free Beer will NOT fuel your projects● In need of unity of purpose ● In favor of software freedoms ● In favor of asking for help
  35. 35. Build Measure Learn
  36. 36. Free LOSSFreedom is not free!
  37. 37. Fund-raising Alternatives● Grants● Seed Funding● Donations● Merchandise
  38. 38. Finding Resources● Crowd-Sourced
  39. 39. Top Ten Fund-raising Lies1.All we have to do is get 1% of the market2.We filed patents so out intellectual property is protected3.Our management team is proven4.The large companies in our market are too big, dumb, and slow to compete with us5.Our product will go viral
  40. 40. Top Ten Fund-raising Lies6.Hurry up because our other investors are about to do our deal7.No one else can do what were doing8.Several Fortune 500 companies are set to do business with us9.Jupiter says our marker will be worth $50 billion in ten years10.Our projections are conservative(Kawasaki, 2012)
  41. 41. ModelingIf we do not know who the customer is, we do not know what quality is.(Ries, 2011)
  42. 42. Questioning Assumptions“What if they don’t care about [fill in the blank] in the same way we do?”(Ries, 2011)
  43. 43. Questioning Assumptions“In fact, piercing the reality distortion field is quite uncomfortable. ”(Ries, 2011)
  44. 44. SourceForge Projects● 324,000 projects● 268,554 projects with only 1 developer (83%)● 44,446 “viable” projects (14%)
  45. 45. Successful Free Culture Project When its community is more than just the author of the project
  46. 46. Developers Per Project
  47. 47. Why Do People Give?1.Belief in the cause 6.Joy2.Recognition and 7.Guilt honor 8.Fear3.For a tax deduction 9.To make a difference4.Family tradition5.Religious beliefs
  48. 48. Thought Experiment● Put the following non-profits in order of size of assets (donations): ● Apache Foundation ● Free Software Foundation ● GNOME Foundation ● Mozilla Foundation ● Perl Foundation ● Wikipedia Foundation
  49. 49. Case Study: Free Software Foundation
  50. 50. Case Study: GNOME Foundation
  51. 51. Case Study: Apache Foundation
  52. 52. Case Study: Mozilla Foundation
  53. 53. Mozilla vs overall FLOSS Browsers
  54. 54. Mozilla vs overall FLOSS Browsers
  55. 55. Case Study: FSF Foundation
  56. 56. Fund-raising Best Practices● Ask● Prepare● Measure● Repeat
  57. 57. Best Practices for Startups
  58. 58. Best Practices for Politicians
  59. 59. Build A good design isone that changes customer behavior for the better.(Ries, 2011)
  60. 60. Fund-raising 101● Build a Foundation● 501(3)c● Grants● Corporate Donors● Community
  61. 61. Build a Foundation● Incorporation● Mission/Vision● Board of Directors● Transparency
  62. 62. Setting up a 501(3)c
  63. 63. Finding Grants
  64. 64. Corporate Donors● Pitch● Outbound Marketing●
  65. 65. Community● Building a Community● Using Social Media● Build-Measure-Learn
  66. 66. References● Kawasaki, G. (2012). Raising Money: What Not to Say and What Not to Believe. http://mstrb.us/zfhxIl● Dvorak, J.C. (2009). The State of Open Source on Firefoxs Fifth Birthday. http://mstrb.us/yF7CF3● Ries, E. (2011). The Lean Startup.● Fiscal Year 2010-2011 Annual Report for The Apache Software Foundation. http://mstrb.us/AzdrN2● Fiscal Year 2009-2010 Annual Report for The Apache Software Foundation. http://mstrb.us/yLiEIy● Fiscal Year 2008-2009 Annual Report for The Apache Software Foundation. http://mstrb.us/x8VKbv
  67. 67. References● Fiscal Year 2007-2008 Annual Report for The Apache Software Foundation. http://mstrb.us/xvGSe4● Fiscal Year 2006-2007 Annual Report for The Apache Software Foundation. http://mstrb.us/y63WzT● Fiscal Year 2005-2006 Annual Report for The Apache Software Foundation. http://mstrb.us/yNAbTE● Fiscal Year 2002-2003 Annual Report for The Apache Software Foundation. http://mstrb.us/wyCvAe● Fiscal Year 2001-2002 Annual Report for The Apache Software Foundation. http://mstrb.us/wRRw6w● 2010 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/yLAmX7
  68. 68. References● 2009 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/yOyW0n● 2008 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/xLdf1Y● 2007 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/xP1jqj● 2006 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/wDJDOV● 2005 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/yzTktK● 2004 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/zMnI1u
  69. 69. References● 2003 IRS Form 990 for the Mozilla Foundation. http://mstrb.us/wDpQeo● Perens, B. (2008). State of Open Source Message: A New Decade For Open Source. http://mstrb.us/zre7oP● Perens, B. (2005). The Emerging Economic Paradigm of Open Source. http://mstrb.us/xVlTXC● Perens, B. The Covenant - A New Approach to Open Source Cooperation. http://mstrb.us/ybrmfO● FSF 2011 Audited Financial Statement. http://mstrb.us/zCy7VT
  70. 70. References● FSF 2010 filing information. http://mstrb.us/x2Rumq● FSF 2009 Audited Financial Statement. http://mstrb.us/zyoFHX● FSF 2008 filing information. http://mstrb.us/xtBZi1● FSF 2007 filing information. http://mstrb.us/zbSp0Q● FSF 2006 filing information. http://mstrb.us/xzNEzS● FSF 2006 filing information. http://mstrb.us/yTjZuR
  71. 71. References● FSF 2005 filing information. http://mstrb.us/xCUQeQ● FSF 2004 filing information.http://mstrb.us/zwOlhl● GNOME Foundation Detailed Financial Plan 2011. http://mstrb.us/zxoI4N● GNOME Foundation Detailed Financial Plan 2010. http://mstrb.us/A0jA2g● GNOME Budget 2009. http://mstrb.us/zdFT0B● GNOME Foundation Financial Statement for Fiscal Year 2007. http://mstrb.us/Aw7sGN
  72. 72. References● GNOME Foundation – Fiscal Year 2005 – Balance Summary. http://mstrb.us/wP8h59● GNOME Foundation Financial Statement for Fiscal Year 2004. http://mstrb.us/wxQVGB● GNOME Foundation Financial Statement for Fiscal Year 2003. http://mstrb.us/xoFnzh● Sourceforge.net. (2012). Developer Counts – The Stats. http://mstrb.us/xmAWfu● Browser Market Share. (2009). http://mstrb.us/znr3Iy● Wheeler., D. (2007). Why Open Source Software / Free Software (OSS/FS, FLOSS, or FOSS)? Look at the Numbers! http://mstrb.us/xBkuQP● Browser Market Share. (2111). http://mstrb.us/znr3Iy
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