This document discusses strategies for organizing and funding free culture projects. It notes that many free culture projects fail due to a lack of resources. By focusing on raising funds through methods like donations, merchandise, and grants, projects can increase their chances of survival. Successful foundations and projects employ modern internet marketing strategies to build communities and attract financial support through various channels like websites, email, conferences, and social media.

1. How to Organize and Fund
Free Culture Projects
Kevin Shockey
Founder, Mis Tribus

2. What?
Free culture projects often fail
due to a lack of resources.

3. So What?
By focusing on raising funds (resources),
a project can increase its' chances
of survival

4. Why me?
Computer Science, Math,
Financials, and Software Development

5. Why now?
 Declining interest in FLOSS
 Lingering confusion surrounding free software
 Lack of unity, more division
- Freedom
 Cloud computing and proprietary platforms, like iOS, are:
- Reducing awareness of FLOSS contribution
- Reducing interest in freedom

6. O'Reilly Home Page (06/16/2012)

7. Disclaimer
Some of this class
Is based on theories
I'm currently researching
And using

8. Key Takeaways from Tutorial
 Now:
- Ideas are easy, execution is hard
- Most FLOSS projects fail
- Lack of resources
 Financing Freedom:
- Funding is available
- Most popular FLOSS foundations aggressively pursue funding
- Success requires a methodical process
- Mastery of Internet marketing

9. Software Development Project Methodologies
 Waterfall
 Microsoft Solutions Framework
 Rational (IBM) Model
 Open Source
 Expert Programming
 Agile/SCRUM Development Method
 Lean Startup

10. Tutorial as a Startup
 Eric Ries – Lean Startup
 Financing Freedom - “How to organize and fund free culture projects”
- Slides
- Handout
- eBook
 Supporting Materials
- Background
- Data
- Illustrations (Graphs)
- Vision for Maximum Strategy
 Community

11. So far...Startup Progress
 Funding Free Culture:
- Blog: news.financingfreedom.com
- Homepage: www.financingfreedom.com
- @_ff12
- Tumblr: FundingFreeCulture.Tumblr.com
 One Blogger post triggers:
- 5 Automated tweets on 3 different accounts
- 3 Twitter accounts
- Linked In
- Financing Freedom Page on Facebook

12. Bridge

13. Assumptions
 Free Culture
 Project Execution
 Project Funding

14. Free Culture Assumptions
 Free culture projects often fail
- Never shipping
- Unable to attract a community
 Division makes free culture weaker
- Contributors must choose
- Only able to sustain two or three projects

15. “Free” Assumptions
 Ambiguity between free and open source software
 In many cases there is a an unequal value transaction:
- Many use “free” software
- Few look for ways to give back to the community
- Volunteer
- Recommendations
- Donations
- Merchandise
- Services

16. State of FLOSS?
 Projects in emergent, growth, & maturity stages
 State is Mixed
- Enterprise recognition
- Limited user recognition/support
- Finances (resources) are limited (often to just one person)

17. Top 10 FLOSS Hall of Fame
1. Linux Kernel
2. GNU Utilities & Compilers
3. Ubuntu
4. BSD
5. Samba
(Top 10 Open Source Hall of Famers. (2009). http://mstrb.us/zjn6zK)

18. Top 10 FLOSS Hall of Fame
6. MySQL
7. BIND
8. SendMail
9. OpenSSH & OpenSSL
10. Apache

19. Measuring FLOSS
 Through search, Google Trends
 Through search, Google Scholar
 Through investigation, Mining SourceForge.net Repository

20. Search is relative (Rabbit Hole)
 Search is a simulation;
- By measuring “reality” we affect reality
- It is a proxy,
- We humanely can not understand the math involved
- Artificial intelligence

21. What SEO Tells Us
 Many Thanks to Stephen O'Grady and his SEO research, which he shared: “The State of
Open Source: Startup, Growth, Maturity or Decline?”

22. General trends for mature projects - Linux

23. Apache

24. MySQL

25. PHP

26. Open Source

27. GPL

28. Emerging Technologies Dominated by FLOSS – Linux Cloud

29. NoSQL

30. Hadoop

31. Another Bridge

32. 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.)

33. Open Source Academic Papers by Year
900
800
700
600
500
Direct Results
400
300
200
100
0
2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997

34. “Open Source” vs “Free Software” (since 1983)
900
800
700
600
500
400
300
200
100 Free Sof tw 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

35. Academic Paper Analysis
 Growth reversed in 2011, but 2012 will show new growth
 Free software has not been researched much
- Out-published by a margin of 5 to 1 by open source.

36. Academic Paper Questions
 Has research on “open source peaked?
 Why isn't anyone researching “free software?”
 Has “open source” obscured the importance of free software?

37. Most Famous Bridge

38. SourceForge Research Data Archive (SRDA)
 Many tables archived from February 2005 to present
 Data includes any churn in the number of active users, projects, messages, etc.
 Observations

39. Monthly additions of users is slowing down

40. User base is STILL growing
- Just over 3 million users

41. Sharp increase in the number of projects

42. Number of packages is also up.

43. Number of releases are down

44. Number of files are down.

45. Downloads are generally rising
- Extreme variances are unexplained

46. 3.6 Million in January 2009 *

47. Is GitHub Eating all of SourceForge's Candy?

48. SourceForge and GitHub Smackdown
 Three comparisons
- Number of Users
- Number of Academic Papers
- Number of Repositories
 Round One - Number of Users:
- SF (3 Million to 1.6 Million)
 Round Two – Academic papers
- SF (195 to 8)
 Round Three – Repositories
- No correlation for repositories

49. Possible Conclusions
 Certain aspects of open source are in decline:
- Open source has moved beyond technology maturity
- Cloud computing and apps are more popular

50. Another Bridge

51. Project Execution Assumptions
 Most projects end in failure
 A successful project organization has emerged
 FLOSS projects are similar to startups
 Execution is achieved through testing assumptions

52. Open Source Failure
 A project that is unable to grow a community beyond the founder.
 A project that fails to ship anything.
 Abandoned projects

53. Open Source Failure
 A project that is unable to grow a community beyond the founder.
 A project that fails to ship anything.
 Abandoned projects...when either of the 1 two conditions reoccurs
st

54. SourceForge Projects
 324,000 projects
 268,554 projects with only 1 developer (83%)
 44,446 “viable” projects (14%)

55. Developers Per Project

56. Open Source Success
 Constant and synchronous communication
 Consistency in methodological development approach
 Geographical dispersion management through an extensive testing culture
 FLOSSD experience in accepting and handling the environmental limitations

57. Critical Success Factors
 Obligatory use of project methodology
 An extensive testing culture (Lean Startup)
- Build Measure Learn or your competition will
 Irrelevance is your enemy
- Mastery of Internet and Social Media marketing
 Create, nurture, and manage a viable community

58. An Infinite Marketplace
 Thousands of new OSS projects every month
 Thousands of new apps on Android and Apple
 A hundred thousand new e-Books
 Millions of social media updates
- Photos
- Videos
- Blog entries

59. Irrelevance is Your Enemy

60. Build Measure Learn (Rabbit Hole)

61. Build
A good design is
one that changes customer behavior
for the better.(Ries, 2011)

62. Modeling
If we do not know who the customer is,
we do not know what quality is. (Ries, 2011)

63. Questioning Assumptions
“What if they don’t care about [fill in the blank]
in the same way we do?” (Ries, 2011)

64. Questioning Assumptions
“In fact, piercing the reality distortion field
is quite uncomfortable. ” (Ries, 2011)

65. 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
- Other?

66. Breaking Bridge

67. Free LOSS
Session Two – How to Organize
and Fund Free Culture Projects

68. Project Funding Assumptions
 Our software (product) is sufficient to obtain resources
- Build it and they will come
- Free beer will fuel our project
 Not much is known about how to raise funds effectively
- Only one level “information”
 Funding is an independent function, different from __________________

69. Resources = Time = Opportunity
 Most projects fail
 They fail due to a lack of resources
 What resources?
- Community
- Contributions
- Participation
- Money
- Attention

70. Paying for FLOSS
 Software is “free.”
 Recognition that projects are highly sensitive to resource constraints
 Usual methods available:
- Project donation page
- Merchandise
 Missing most lucrative donors:
- Corporations
- Governments
- Customers

71. Common Fund-raising Alternatives
 Bootstrapping
 Donations
 Merchandise
 Grants
- Private
- Government
 Seed funding
 Dumb money
 Corporate Donations 501.3(c)
 Raise resources not only money
- Building community
- Creating a platform for donating time

72. Why Do People Give?
1. Belief in the cause
2. Recognition and honor
3. For a tax deduction
4. Family tradition
5. Religious beliefs
6. Joy
7. Guilt
8. Fear
9. To make a difference

73. Why we give, or don't
 Experience internal satisfaction, the “warm glow”
 Helper's high, which increases our feelings of self-worth
 Different kinds of giving, and therefore different explanations
- People who are religious give more
- People who have more, don't necessarily give more
- Senior citizens who volunteer live longer
- People who plan donations, give more
 Some research links oxytocin to generosity:
- Amygdala has oxytocin receptors that control feelings of safety and fear

74. Examining Popular Foundation Revenues

75. Foundation Metrics
 If they are a 501(c)(3), they must file publicly their financial statements
 Form 990 or 990EZ

76. Case Study: Perl Foundation
Perl Foundation Revenues
$350,000.00
$300,000.00
$250,000.00
$200,000.00
$150,000.00
$100,000.00
$50,000.00
$-
2006 2007 2008 2009 2010

77. Case Study: GNOME Foundation
GNOME Foundation Revenues
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$-
2002 2003 2004 2005 2006 2007 2008 2009 2010

78. Case Study: Apache Foundation
Apache Foundation Revenues
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
2006 2007 2008 2009 2010

79. Case Study: Free Software Foundation
Free Software Foundation Revenues
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$-
2003 2004 2005 2006 2007 2008 2009 2010 2011

80. Case Study: Mozilla Foundation
Mozilla Foundation Revenues
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
2003 2004 2005 2006 2007 2008 2009 2010

81. Case Study: Wikimedia Foundation
Wikimedia Foundation Revenues
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
2006 2007 2008 2009 2010

82. Mozilla Foundation
2011 Annual Report (sort of)

83. Mozilla Foundation Drill Down
 July 15, 2003 - The Mozilla Foundation is born with a $2 million start-up support from
America Online's Netscape division
 FY 2005 - The Mozilla Foundation added $28 million in revenues in royalties
 August 3, 2005 - The Mozilla Corporation was established to handle the revenue-related
operations of the Mozilla Foundation.
- The Mozilla Corporation (abbreviated MoCo) is a wholly owned subsidiary of the Mozilla
Foundation

84. Mozilla and Subsidiaries
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$-
2003 2004 2005 2006 2007 2008 2009 2010

85. Mozilla Versus the World

86. Free Software Foundation Drill Down
 Primary channels are:
- Website
- Email
- Conference participation
 Internet Marketing
- Discover the niche communities
- Adding value to relationship
- Earning trust

87. Assumption Take Aways...
 Mixed State of Open Source
- Acceptance of open source decline is misguided
 Best projects use project methodology
- Growing a community
- Shipping in iterations
 Financial support (donations, purchases, memberships) is lacking
 Large difference between public relationship strategies
- Most successful projects use modern strategies
 Niche groups who are content with scratching their own itch
- Dogmatic approach to community

88. Another Bridge

89. Top Ten Startup Fund-raising Lies
1. All we have to do is get 1% of the market
2. We filed patents so our intellectual property is protected
3. Our management team is proven
4. The large companies in our market are too big, dumb, and slow to compete with us
5. Our product will go viral

90. Top Ten Startup Fund-raising Lies (Continued)
6. Hurry up because our other investors are about to do our deal
7. No one else can do what we're doing
8. Several Fortune 500 companies are set to do business with us
9. Jupiter says our marker will be worth $50 billion in ten years
10. Our projections are conservative (Kawasaki, 2012)

91. Fund-raising Best Practices
 Build a Foundation
 501(c)(3)
 Establish a Fund-raising Program
 Obtain Grants
 Corporate Donors
 Community

92. Best Practices for Startups
 Build something interesting
 Innovation Accounting
- Testing
- Methodology
 Team
- Talent
 Leadership
 Use Web2.0 and Cloud Computing

93. Build a Foundation
 Incorporation
- Think about SEO first
 Mission/Vision
- Ensure your mission matches up with the charitable activities you plan for your 501(c)(3)
 Board of Directors
 Transparency
- Expect to make all of your founding documents public
- Required by IRS for all 501(c)(3)

94. Setting up a 501(c)(3)
 Choose an available business name
 Formal articles of incorporation
 Create corporate bylaws
 Appoint the initial directors
 Hold the first meeting of the board of directors
 Financial data
- Financial statements
- A current balance sheet
 Open to foreign corporations
- Donations are not exempt

95. IRS Application
 Form SS-4 – Employer Identification Number
 IRS Form 1023 – Application for Recognition of Exemption
 IRS Form – Power of Attorney
 Organizations must usually file a form 990 (or 990-EZ) every year

96. How to Start a Fund-raising Program
 Create a fund-raising committee
- 5-7 members
 Put your fund raising goals in writing
 Develop a plan of action
 Revise your plans
- Build-Measure-Learn
- Contingency
 Share your plans

97. Finding Government Grants
 Grants.gov
 Department of Health and Human Services
- http://www.hhs.gov/grants/
 National Institute of General Medical Sciences
- http://www.nigms.nih.gov/Research/
 National Institute of Health
- http://grants.nih.gov/grants/guide/
- http://grants1.nih.gov/grants/funding/sbir.htm (*)

98. Finding Government Grants (continued)
 National Science Foundation
- http://nsf.gov/funding/
 National Endowment of the Arts
- http://www.nea.gov/grants/index.html
 Department of Defense
- http://www.dodsbir.net/ (*)

99. How Can Grants Fund A Project?
 Must be able to align project's needs with needs of the CFP
 Whether it is research or development, the needs can be the same
 Examples:
- DARPANet
- The US DoD has spent > $100 million on social network sentiment analysis
- The NSF just initiated a multimillion dollar CFP for Big Data projects

100. Finding Private Foundation Grants
 Other 501(c)(3) Organizations
 Private Foundations
 Best Practices; Be clear about:
- Purpose of your program or project.
- Type of support that is needed to carry out the project.
- Total amount of money that will be needed to complete the project.
 The Number One Complaint of Foundations?
- People do NOT do thorough RESEARCH!
- If you do NOT qualify – do NOT apply!

101. Top Private Foundations by Giving (June 2012)
1. Bill & Melinda Gates Foundation - $2,486,342,209
2. Walton Family Foundation, Inc. - $1,479,636,053
3. Genentech Access To Care Foundation - $587,337,392
4. Pfizer Patient Assistance Foundation, Inc. - $569,495,443
5. GlaxoSmithKline Patient Access Programs Foundation - $555,867,032

102. Top Private Foundations by Giving (June 2012) - Continued
6. Abbott Patient Assistance Foundation - $482,610,604
7. Ford Foundation - $424,695,000
8. Johnson & Johnson Patient Assistance Foundation, Inc. - $416,443,559
9. Sanofi-aventis Patient Assistance Foundation - $392,778,999
10. The Bristol-Myers Squibb Patient Assistance Foundation, Inc. - $392,567,134
$7,787,773,425

103. Total Giving By Top 100 US Private Foundations (June 2012)
$18,498,784,792
$46,900,000,000

104. Why Corporations Give?
 Creating programs to use company employees as volunteers
 Forming partnerships
 Promoting the corporation
 Gaining cost effectiveness
 Creating a win-win situation

105. Best Practices for Corporate Donations
 Create list of corporations
 Identify A-list prospects
 Personal contacts make a difference
 Don't take “No” for an answer
 Stay in touch
- Thank you
- Add to social network

106. Most Common Forms of Corporate Support
 Matching donations of employees
 In-kind
 Cash
 Employee time

107. Corporate Solicitation Kit
 Current list of board of directors
 Mission statement
 Budget information
 Audit information
 Purpose of funding request

108. The Power of the Crowd
Crowd Funding &
Sourcing

109. Contributions From the Crowd
 Crowd source
- Bugs, testing, documentation, code, design
- Governance
 Crowd funded
- Donations
- Merchandise
- Customers
- Crowd funding platforms

110. The Crowd Funding Battle Royale
 There will be an estimated 530 platforms by the end of 2012
 $280,600,000 raised by CFPs in 2012
 Majority are ONLY for 501(c)(3)

111. Kickstarter
56% of all projects fail!

112. Drill Down on Kickstarter Success
Success Rate By Category
80.00%
70.00% 69.00%
63.81%
60.00%
54.18%
50.00%
48.22%
45.49%
Overall Average is 44%
40.83%
39.62%
40.00%
38.30%
35.47%
33.83%
31.86%
30.00% 28.80%
27.29%
20.00%
10.00%
0.00%
Fashion Technology Publishing Games Design Photography Film & Video Food Comics Art Music Theater Dance

113. Kickstarter Failure Analysis
Funding for Failed Kickstarter Projects, by Percent
0.52% 1.19% 3.89%
22.51% 11.19%
0% Funded
1% to 20% Funded
21% to 40% Funded
41% to 60% Funded
61% to 80% Funded
81% to 99% Funded
60.70%

114. Kickstarter Best Practices
 You're already a 501(c)(3) non-profit
 You have an existing brand, fan base, or personality
- Kickstarter does not grow your network it harvests existing engagement
 Your project explanation is clear and concise
- Extensive pre-launch preparation and testing have already taken place
 Your social engagement platform is working optimally
 You consistently share valuable status and progress and communicate effectively
 You maintain constant contact with anyone granting you permission
 Imbalance between offer and value
- Getting too greedy

115. Kickstarter Best Practices
Crowdfunding forces a proof
of concept before the product
hits the shelves:

116. The Crowd as Customer
 Merchandise
- Make it cool
- Make it limited
- Use it to drive engagement
- Badges (The gamification of community)
 Services
- The most successful open source businesses model

117. The Crowd as Donor?
 In 2009, the Giving USA Foundation reported individual donations were $217.79B
 Of a grand total $298.42B donated, the top 5 recipients were:
- Religion (32%)
- Education (14%)
- Human Services (12%)
- Gifts to Foundations (9%)
- Public-Society Benefit (7%)
 Direct marketing to the crowd is the most challenging

118. Crowd Sourcing = Building Community
 Who ever has the biggest social network wins
 Using Social Media
 Build-Measure-Learn

119. The Art of Community

120. Final Bridge

121. Transmedia Production and Lean Startup Mashup
 Max Strategy
 Big Data
 Innovation Accounting
 Expert Systems
 Machine Intelligence

122. Transmedia Production and Social Media
 Caves
 Supermarkets
 Rain Clouds
 Better To Give

123. Afraid Of Caves?

124. Caves Are Like…
=

125. Social Media Is…
 The Unknown
 Dark
 Scary
- Most of your customers are in there
- And they’re probably talking about you!!!

126. Filled With Treasure

127. Unusual Characters

128. Just Do it!

129. Do Whatever It Takes
 Hire a guide
 Get some tools
 Learn the ropes
 Talk to people

130. The Internet Is…

131. Social Media Is Like A

132. How big is ∞?
 Facebook – 700,000,000
 Twitter – 140,000,000
 LinkedIn – 125,000,000
 MySpace –19,7000,000
 Flickr – 32,000,000
 YouTube – 3,000,000,000

133. ∞ Needs Max-Strategy
 ∞ means you can’t predict:
- Who will become a customer
- Where you will find them
- What products they will buy
 Need to:
- Simplify around keywords
- Find better tools
- Data & AI

134. Social Media Is Not…
About
You!

135. Social Media Is About
 Your customers:
- How do you give THEM more value than you get?
- How do you gain your customer’s trust?
 With trust comes permission

136. Using Social Media
 Doing nothing is not an option
 Have to answer the critical question: “Now what?”
- Engage/Converse/Ask/Answer
 Can’t implement and forget
 Deliver value

137. Final Suggestions
 Those who use social media will learn what works
 Break it down:
- 3-5 simple tasks
- Do them daily
 And…

138. Grow your Network!
got permission?

139. The Biggest Social Graph Wins
 All major networks:
- FB, LI, Twitter, & YouTube...
 All the large networks:
- Flickr, Tumblr, Hi5, & MySpace...
 All the small networks:
- About.Me, Paper.li, PhotoBucket, Pinterest, Wikia...
 All future social network systems...

140. Cutting Costs
 Significantly reduces cost of advertising
- Nothing is unacceptable
- Cost approaches $0
- Less direct or email costs
- Generate leads (24/7/365)
 E-Commerce
- Potential to sell (24/7/365)
- Cost approaches $0

141. Cutting Costs
If you can spend less time marketing,
recruiting, and networking…
Spend more time producing

142. The Era of Big Data
 Many accepted business metrics are obsolete
 Engagement is the only metric that counts now
 Only a max-strategy has a chance
 Mining the Internet for permission
 Using Artificial Intelligence to predict engagement and permission

143. The Singularity is Coming
 Sentiment analysis is coming:
- HLD: Predicting terrorist activity
- CDC: Tracking epidemics
- Big Data
- Data Mining
- Machine Intelligence
 A Minority Report Future
- Followed and interrupted
- Face recognition will track us
- We already carry a tracking device

144. Questions & Discussion
kevin@mistribus.com
@shockeyk
@mistribus
@_ff12