Tag Archives: Business

Business Personal Political

On the idolatry of investors

December 23, 2012 – 5:09 pm

It’s seems you can’t tune into any sort of political debate on the economy these days without a glut of commentators and politicians lining up to tell us how all our problems can, nay must, be solved by ‘attracting investors’. We must do everything we can, we’re told,  to catch the eye of these incredibly elusive and rare beasts, who are constantly on the move and always on the lookout for the juiciest pickings. They’re a different breed from us if you’re to believe the breathless accounts of expert observers; by all reports globally mobile, notoriously fickle and with the patience of a three year old after three tubes of blue Smarties. Miss your chance by making things hard for them – common faux pas by the poorly prepared include having labour laws and asking them to pay some tax – and they’ll breeze past your metaphorical begging bowl and on to more attractive opportunities. The only answer is to prostrate yourself at the feet of the investment cadre, regardless of whether you have to slash other things like health and education to do so, because if you don’t your destiny is destitution anyway. Or so the narrative goes, admittedly dressed in slightly more palatable phrasing. You’re not supposed to question this, it’s part of the doctrine of the Priesthood of Economics.

Now, having investors ready to fund business ventures is unquestionably a good thing. But if you think that this particular breed of gadfly investor – the straw man most often constructed by financial middle men and right-wing politicians in order to sell a particular philosophy – is the root of the majority of new businesses, then you’re very much mistaken.

Let’s talk fundamentals for a second. In order to launch a business, which I think is universally accepted as the engine of economic prosperity, you basically need 3 kinds of participant:

These 3 roles are pretty much fundamental, and investors are clearly present: but are just one third of the recipe. The inference by some of the narrative I often hear is that while investors are rare, precious and indispensable,  the people in the other two roles are not – if the money’s there, then we can surely rustle up people to do the other jobs, they’re almost two a penny. This is, of course, nonsense. People with good ideas, and people who can execute well on ideas to create a great functioning business, are at least as rare as the investors who would fund it, and in my opinion even more so.

My second point is that if you can do without any of the 3 roles, it’s actually the investor. It’s impossible to launch a new business without ideas, and without execution – nothing happens without these two things. But particularly in the technology space, it’s getting easier and cheaper to launch your own business thanks to cloud services, easy access to global distribution platforms, and the pace of change regularly giving great opportunities to newcomers, and often external investment just isn’t necessary in the early stages. Maybe you’ll scale using external money later, maybe you won’t – with a lot of successfully bootstrapped businesses, it often seems like they’re letting the investors on the bandwagon later not because they actually need the money, but because it’s literally being thrown at them and saying no gets boring after a while ;)

And those businesses who do launch with initial seed investment, do they get it from these nomadic global investors who only glanced their way because the economic environment was designed specifically to attract them? No. Almost exclusively they get this seed money from family, friends or business angels, people who invest because they see the potential of the idea or the people, and who are usually located in the same rough area already.

So what’s my point here? It’s that the political and economic narrative is regularly at odds with the reality that at least – at least – two thirds of the engine of economic prosperity in a community comes from its own internal resources. The kids who might grow up to have great ideas, or become really great at executing on those ideas. The kids that can build new businesses and create an engine of their own prosperity. Too many times we get caught up in a fashionable chase after the globally nomadic investor class, at times sacrificing the things that benefit the local populace in an attempt to pimp ourselves out in return for what often turns out to be frankly modest and, more damagingly, short-term returns whose conditions tend to worsen over time.  The actual effect on lasting prosperity within a community of courting fickle global investment is highly debatable – not only is the majority of seed funding for new business generated from local rather than global sources, but this funding also tends to be much ‘stickier’ – it doesn’t tend to evapourate at the first sign of difficulty, or in the face of slightly better terms available somewhere else.

Let’s think less about global fly-by-night investors, and more about the people with ideas, the people with creativity and powers of execution, and the at most the local angel investors who are here already and don’t need to be attracted with coy waves of a Geisha’s fan. The long-term returns are better anyway.

(With apologies to XKCD for my blatant imitation)

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Business Internet Personal

On the Internet, everyone should know you’re a dog

November 13, 2012 – 7:02 pm

One of the things I hear on occasion is the maxim ‘People buy from people’. Usually what people mean when they say this is that the only real way to sell things to people is to go meet them, shake their hands, wine and dine them, play golf with them, organise trade delegations to impress them, and so on. I’m sure that’s still the way it works in some industries, especially those which are large, slow-moving and headed mainly by the over-50s who are most comfortable negotiating over walnut boardroom tables. I hear sometimes what cuff-links or school tie you wear is somehow a relevant factor in the negotiation. Curious.

Of course when it comes to more modern businesses, particularly in the digital space, the idea that you have to meet people in person to sell them things is ludicrous – take tech companies like Atlassian for example, who exceeded $100m in sales revenue without ever having a single sales person on the payroll. When barriers to communication and trade come down, if you offer a great product or service, at a price that makes sense to people, and you find good ways to tell them about it (preferably with ways for them to try it and make their own minds up), they’ll frequently come to you and hand over the money without ever meeting you. If you do a good job, they’ll tell their friends about it too and do your marketing for you, in a more influential way than you ever could (3rd party recommendations are always trusted more).

So, the days of needing travelling salesman are long gone for many businesses. However, the maxim that ‘People buy from people’ is still actually true, it just isn’t addressed in quite the same way. Customers do still care about who they’re buying from, they just don’t feel the need to shake their hands any more. While the features of the product / service are forefront in a potential customers mind, they do still care who it is that’s producing it, and what their values are, even if only subconsciously. We enjoy buying things from people we like, and companies we can relate to, and are more likely to resent buying from companies who are much larger, faceless and treat us like an account number rather than a human being – ask people who buy from Oracle about that maybe ;)

It’s not even simply a touchy-feely issue – a company that shows it cares about its customers, and has a corporate image that suggests that it’s likely to understand a customers own challenges and goals, is more likely to give great after-sales support, and to listen to customers requests for improvements, and so on. Whether or not a customer feels that the supplier ‘gets them’ is an important indicator of what the future relationship will be like, and not just a nice warm feeling.

Of course, these are the same sorts factors that a travelling sales rep would address in the ‘old’ pre-digital businesses. Achieving this relationship in the digital domain might seem far-fetched to traditionalists, but actually as customer audiences become more and more digitally savvy it’s really not a stretch. Let’s not forget that anyone born after around 1990 probably can’t remember what it was like not to communicate online, and probably do most of their day to day communication this way. To them, the golf course is probably as alien as Twitter is to most 50-something executives around those walnut boardroom tables, but it’s these people who are increasingly your audience – if you’re not getting this yet, be aware that someone is actively moving your cheeseas we speak.

So what do you do? To truly connect with people online, you have to be:

  • Highly accessible in multiple channels (e.g. all the major social networking sites)
  • Responsive to all feedback, good and bad
  • Open and transparent
  • A real person – even if you’re inside a big organisation, people want to know who you are. You can’t connect if you’re Drone A from BigCorp
  • Collaborative – you’re not controlling the community even if it’s your product, you’re a part of it. Value people as peers and not just customers.
  • Honest. Seriously, the Internet will find out if you’re not.

Big companies have a real problem building these relationships well online, in my experience, because a large bureaucracy just isn’t designed to deliver it. Small, open, agile companies have filled the void and often kicking the older guys asses here, solidifying long-term relationships with numbers of people unheard of before in the traditional traveling sales models.

It’s a new world out there. Personal relationships still matter between suppliers and customers, but increasingly they’ll be in the digital space, and you can build them with vastly more people than you ever could before, if you do it right. People like Crowd can help you with that too.

(Image (c) Peter Steiner)

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Business Personal

Scale isn’t everything

May 20, 2012 – 3:47 pm

If you limit your reading material to articles on TechCrunch and similar sites, you’d get the impression that to succeed in business requires that you plan to scale to a massive level. The received wisdom is that if you’re not targeting a user base of several million, and are not raising capital in Silicon Valley commensurate with that aim, then you’re not doing it right.

This is nonsense, of course. It simply reflects one end of the spectrum of business ventures – that which is high-risk and high-reward. There are many groups with a vested interest in this extreme being perceived to be the only valid approach – not only the media companies which hype them to generate news (big wins and big failures are news, the middle ground isn’t), but also the venture capital machine requires a steady stream of people willing to roll these high-stakes dice, because the unfortunate reality is that most of them will fail. The fact is that at the high-stakes end, you have to keep feeding the wood chipper in order to keep generating the minority of successes that fund the rest – it just sucks for you if you’re one of the majority who flame out. Failure can still be a good experience of course, and in the US past failures do not carry the stigma that they seem to in Europe, but still, being back at the start a few years on with probably a burn-out or two is not the outcome you were shooting for.

And at its worst, this can have a serious negative effect on would-be entrepreneurs – those people who are not in their early 20′s with no commitments, and who do have something to lose (houses, families etc). The perception that the only startup business worth doing is one where you move to Silicon Valley, pitch to VCs and then sleep under your desk for a few years can appear so daunting and high-risk that someone with anything to lose is likely go white and run back to the ‘safe’ world of employment (the actual safety of which is vastly overestimated of course, but that’s for another time). And yet in reality there are countless ways those over 30 can start their own business without risking destroying their lives, particularly if they’re creators themselves – programmers, artists, engineers, writers and so on, by profession or by hobby – whether part-time or full-time, and the Internet has made many ventures largely location-independent in practice. Sure, if you want to start the next VC-funded über-growth company you probably need to move to Silicon Valley, but seriously, that’s not the only kind of business that makes sense.

Here’s a truth that you rarely hear in the rarefied world of tech business journalism – a successful business is one that makes more than it spends, and ideally increases that margin over time. That’s it. If you can do something that you enjoy doing, and you can make more money than it costs you to do it, you’ve won. Don’t listen to people who imply that success comes in some kind of first-class and second-class offering; that you have to be on the cover of Wired and have millions of users every day to be successful. If that’s how your business model works, great. But if it isn’t, if you make money by giving a tiny niche audience something they like and they reward you for it with enough money to pay your bills, that’s awesome - don’t for a second let anyone make you feel that it’s not. Don’t get into willy-waving competitions with the ‘go big or die trying’ crowd, it’s pointless and just legitimises what is often a poorly disguised frat boy competition.

Running your own business and seeing it work is a fantastic feeling, and I think anything which encourages more people to dip their toe in that water, at a risk level that they’re comfortable with, is a good thing. The bar that TechCrunch et al set is the precise opposite of that – it’s a kind of elitism, really, designed to keep out all but those who think in that particular way.

I’ll just finish by referring you to 37 Signal’s Bootstrapped, Profitable and Proud page, which is a collection of companies who took a different, bootstrapped route and have done extremely well. Not that I think the $1m revenue benchmark on this page should be considered a threshold for success either; the only success factors I believe make any difference are being happy, and being profitable. If you can nail those two, it’s party time – whether you get to ring the NASDAQ starting bell or not just isn’t as important, IMHO. :)

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Business Development

Sales work – who knew?

May 26, 2011 – 5:00 pm

The SourceTree 1.2 launch sale is now over, and I thought I’d post some indicative results. I went for a fairly large discount of 40% over a full week, and some people I know commented to me along the lines of ‘what about all that money you’ll be losing on each sale?’.

I decided on a large discount because SourceTree 1.2 was a major update that I was actually quite proud of, so I wanted to get it in front of as many people as I could. I was also aware that there might be people who tried SourceTree before, but who decided it wasn’t for them, and I wanted to encourage these people to try it again, since I’d made pretty big strides in this version on the overall appearance of the app and the smoothness of the workflow, in addition to all the normal new features. The way to do this of course is to make it worth their while to do so, by offering a discount that really grabs their attention. A 20% discount probably wasn’t going to do that effectively, but 40%? That’s almost half price! It’s this sort of gut reaction I was looking to promote.

The other thing I was acutely aware of is that you have to be careful not to have too many sales. If you go on sale too often, people are going to start assuming that there’s a sale coming almost any time of year, so will avoid buying unless there’s a sale on. In my opinion, sales need to be infrequent, but big and attention-grabbing when they do happen.

So actually my goal for the sale wasn’t necessarily to make more money than usual, but to get more eyeballs on the new version, and more active users, which I hoped would then translate to more awareness and more sales further down the line, because satisfied customers are the best marketing resources you can ever have. Solid reasoning, but as it turned out, things went much better than I could have hoped, so in the end I actually achieved both at once. :)

So for those people who were wondering whether having a sale is worth it, my results are on the right, in fashionable infographic form ;)

As I said above, what I was really looking for was to reach more people, and I certainly did that – with a 793% increase in units sold in the sale week, that’s about 2 months’ worth of new users in one week. And as you can see, in value terms it also ended up a considerable net positive even with the 40% discount – now of course I’m expecting sales to be more sluggish immediately following since the sale will have caused people to bring forward their purchase, but I’m pretty confident it’ll remain positive even with that compensating effect.

So why am I writing about this? Am I doing it to strut around flashing my ‘wad’ at people? No, and if I’d included the actual $ values you wouldn’t think that anyway – they’re fantastic news to me but they’re in the ‘I can keep doing this sort of thing for a living!’ range rather than the ‘I can buy a Ferrari tomorrow!’ range :) I’m writing it to hopefully provide a data point to other developers who, like me, are still learning about selling their wares online, and are wondering about what kind of affect a sale might have. I don’t know whether it will be exactly the same for you, and there are no doubt a number of variables involved, but this was my experience, and I’ve been very happy with it. Maybe it will help someone else pondering a similar decision…

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Business Cocoa Development Objective C OS X Personal

SourceTree, your Mac Git & Mercurial GUI, is 40% off this week

May 19, 2011 – 5:13 pm

Since I’m trying to spread this news as far and wide as I can, I might as well say it here too :)

Since the approval light just went green on the Mac App Store, I’m happy to announce the launch of SourceTree 1.2! In celebration, I’m having a crazy-bonkers 40% off sale just for one week, so get it while it’s hot!

There’s loads of things that are new or improved in this release, but here are the headlines:

  • Support for GitHub, Bitbucket and Kiln APIs, so you can see your hosted projects inside SourceTree, clone from them, link them as remotes, and even create new projects if you want.
  • Streamlined and polished user interface – I specifically dedicated a lot of extra time in this release on making SourceTree easier on the eyes, and to streamline the layout and workflows better.
  • Performance - I thought SourceTree was already pretty fast, but I managed to find quite a few more places to trim the fat, and also parallelised more activities to make things feel more responsive. Everything feels snappier, and complex repositories benefit especially.
  • New Sidebar - I had previously resisted the need to emulate iTunes here, but once I had implemented it, I had to admit that I was wrong, and in fact this worked great. Provides lots of shortcuts to navigating and operating on branches, tags and remotes.
  • Stashing and Shelving - oft requested, now delivered :)
  • Customise Git and Mercurial – you can now use your system Git / Mercurial instead of SourceTree’s standard versions (which have been updated), and enable additional Mercurial extensions (at your own risk).
  • French and Japanese translations – local versions for our friends in far away (and not so far away) places, likely to be more to come in future. Big thanks to tuan_kuranes and mzch for their help with these two!
  • And the rest – just lots of little refinements too numerous to list. Examples: copying text from the diff panel, ‘git commit –amend’ support, close branches in Mercurial, switch tracking branches in Git

It’s quite a big update – one user remarked to me that they’d normally expect developers to charge an upgrade fee for something like this, but like all other SourceTree updates this is free to existing customers. I have no plans for any paid upgrades for some time yet, I just want to keep making SourceTree better, and hope that more people come onboard. Maybe it’s my open source background, but I like to keep iterating and continually improving things, based on what I want to do (I’m a daily SourceTree user myself), and on what people tell me they’d like to see. SourceTree 1.2 certainly won’t be the last update by far :)

When I look back 6 months at SourceTree 1.0, it’s incredible how much better it is as a product now, both visually and functionally. I’ve learned a ton of things while I’ve been developing it, and I continue to learn more all the time, and I can’t think of anything I’d rather be doing right now. Also, my wife Marie re-designed many of the icons for 1.2 (and I think you’ll agree they’re a lot nicer) – that was fun to do as a joint project, even if I am a picky ‘customer’ ;)

I hope you enjoy the new release!

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Political

Grow your own economy

January 30, 2011 – 5:21 pm

We hear a lot about globalisation these days; how money, people and business move freely around the world (although that has had a few teeny problems of late) and how countries must therefore compete in that market for investment, and ultimately jobs and economic success in general. Much of this is true and common sense, however, I do object to the tone and emphasis that is used whenever this argument is made. There seems to be a preference of late for attracting external players to flirt with local economies for as long as possible before they get bored and move somewhere cheaper, rather than focussing on organic growth of businesses from within the existing local entrepreneurial base. You can do both of course, but in recent years I’ve observed that here and in some other places in the world, the balance is strongly in favour of the short-term plan of courting of large, external players, versus the long-term prospects of ‘growing your own’.

Of course, inward investment is a good thing, but too often this investment isn’t in new local businesses, it’s simply about grafting a globally mobile business to the local economy for a while, usually as a result of some kind of sweetener (a tax break, a public private investment, etc).  It’s a ‘quick fix’, injecting money into the economy quickly (perhaps most importantly, within the time frame of a politician’s tenure), but when viewed at a macro scale it’s also very much a temporary one which can be pulled out at almost any time.

Global companies don’t even hide their temporary commitment; in fact, quite the opposite – they are always exploiting this to lobby governments into making changes which favour them, the line is usually “You’re dependent on us now, so you’d better keep things attractive for us (subtext: at the expense of others if necessary), or we walk.”. You see this all the time – the shrinking of the UK games industry because the UK doesn’t  have tax breaks like Canada, and here in my local jurisdiction the introduction of a tax regime which shifts the tax burden to ordinary people and away from companies in order to appease the financial services industry. In the end, being so dependent on such fickle and demanding ‘friends’ is not the greatest of strategies. At times, it can almost be a protection racket – “Nice economy you’ve got here, it would be a shame if something happened to it” (see this Monty Python sketch).

Every economy needs a bedrock of locally-driven, independent entrepreneurship, made up of of people who do business in that economy because they want to, or because it’s their home, not because someone bribed them to bring their money here and are constantly looking for the next sweetener. There are countless success stories of businesses that went global from a local, organic base, such as Ben and Jerry’s and Specsavers, and these companies have kept their attachment to their origins. Such businesses are ‘stickier’ and less fickle, and I’m willing to bet they require only a tiny fraction of the overall cost (once you count tax breaks, subsidies, and other policy changes / deals) to attract and retain than an equivalently sized global player. It takes more time to get there, but when it does, it’s far less likely to be going anywhere.

I’m not suggesting that we somehow cling on to protectionism, nor do I deny the benefits of globalisation. What I am saying is that in my experience, the balance of policy making is way off in favour of the global players at the expense of others. Maybe if politicians weren’t so easily impressed by financiers in expensive suits with their short-term promises of wealth injection, and learned instead to see the long-term sustainable potential in that garage-dwelling startup, they’d be better at not skewing the economic landscape towards the ‘floaters’ rather than the ‘stayers’.

It’s actually why I shake my head when I see people claiming that the UK needs tax breaks for games companies, to compete with Canada and other places. Personally, I think that even if you gave a tax break to the companies that are relocating away from the UK because of this, they’d just be asking for something else next year. Where does the bribery end? I think that games companies that only go where the tax breaks are, are probably not worth trying to hold on to. I sincerely hope that the talented people who are sadly left out of a job because of this are able to start up or join independent game businesses of their own, and dare I say are likely to be a damn sight more creative in that environment too. The UK games industry has lost much of its individuality in recent years, and who knows, this process might well regain some of that.

So I guess my main point is that bribing and paying protection money is not a sustainable way to run an economy. Sounds obvious really?

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Business Development Games

“Maturing” download games market starts to show retail-like characteristics

January 25, 2010 – 1:15 pm

Watching the ebbs and flows of the game industry is simultaneously inspiring and outright depressing. As is usual for this stage in a console generation, we’re at the ‘consolidation point’ (pun unintentional)  - where the tech is pretty well understood, even if it is starting to look a bit dated compared to even a modest PC (how much hassle AA is on this console generation is a case in point), but that at least developers can crank out content in a more efficient fashion. This has led to some darned good games.

What’s depressing is what’s happening to the ‘official’ download channels – which were a bastion of independent content a year or two ago, and now are turning more and more into just another channel for the same mainstream developers & publishers we see at retail. XBLA has been the trend maker here, it was first to really embrace and promote downloadable games to a ‘core’ market, and has done extremely well. Now, however, we have a limit of 2 games per week, and all too often those 2 slots are being assigned to either major developers (Shadow Complex, Alien Breed Evo) or shovelware ports with brand recognition but little quality or innovation (I’m looking at Taito in particular: Bubble Bobble and Qix remakes were incredibly lazy, uninspiring affairs). It’s very clear that the team behind choosing which developers are published in XBLA has changed in recent years, and not for the better from my perspective. That’s not to say there’s anything wrong with Shadow Complex and Alien Breed Evo, but if they’re using up the slots it means that publishing route is rapidly being cut off for small developers who are big on ideas and talent, but short on funds and established brands. Alien Breed Evo’s budget was supposedly around $2.5m for goodness sakes – although it’s looking like that’s going to backfire anyway since sales have been poor. Trials HD, ‘Splosion Man and Peggle are pretty much the only games from small studios with modest budgets that I can think of that made a splash on XBLA in 2009 – the rest just read like a whos who of regular retail channels. Indeed many developers who have had games published on XBLA are no longer welcome there, such as PomPom (interview) and Llamasoft. Clearly the message is ‘win big, or get your coat’. This isn’t the right environment for an indie scene to flourish, where experimentation and mistakes are part of the process.

Yes, I know there’s XBL ‘Indie Games’ but that’s the absolute opposite end of the spectrum, hobbled with a niche development environment that’s incompatible with the most established dev libraries and every other platform a developer might want to deploy on (barring PC), and so far almost totally lacking any way for a decent game to effectively ‘rise above the noise’, except via external review sites like XNPlay, which doesn’t work at all for targetting the majority of game players with information.  It’s just not a very good target for those I would call ‘serious indies’ and actually acts as a false argument for not opening primary download channels more; there’s nothing wrong with the concept, it’s just implemented completely wrong.

PSN got started later so has been earlier in the curve of promoting independent content, but they’re going that way too. I guess they’re all just ‘following the money’, and the games industry remains obsessed with hits because of its current top-heavy model. I’d hoped that the downloadable content channels would promote an equivalent to low-budget and art-house cinema, where content can survive and make a profit for the creators, without necessarily having to be the Biggest Thing Ever(tm), encouraging experimentation. But, the giant flaw in this plan is that independent cinema is able to be published and consumed anywhere – while most games consumers remain shackled to console platform holders, who just want to publish a limited number of the very biggest hits, everything else not being worth their time or risking ‘distracting’ the customer with choice. If you’ve read my blog before, you know my opinion of the effectiveness of closed platforms in the long term when it comes to broadening and deepening a medium, but I’ll say it again – closed platforms are bad for the industry in the grand scheme of things. Games will never be as big as film until this changes, they might compete on the blockbuster level, but that’s far, far from the whole story. But, until we’re further along the lifecycle of games when hardware and delivery becomes mostly invisible,  the vested interests aren’t going to allow that to change for a little while yet.

You really need to go to the iPhone/iPod Touch for more prolific indie content these days. But, how long will that last?

I honestly don’t know why platform holders find it so hard to manage an open publishing strategy. All you need is systems that:

  • Allow users to rank content; and nominate ‘trusted reviewers’ such as those from major game review sites
  • Allow wide marketing opportunities – both in-system and cross-site (such as to xbox.com, where you can buy in-browser too)
  • Robust searching, on keywords, categories, user ratings, friends recommendations etc
  • Cross-promotion, aka the ‘You might also like…’ lists

Hell, if Amazon can create a compelling buying experience with millions of products across a diverse range of departments, why on earth do platform holders think a console user can’t handle more than 2 game choices a week? It’s hugely patronising, and says more about the inadequacy of the platform to manage larger amounts of content effectively than about any limit on what consumers are willing to peruse. Saying “we can’t sell as effectively if we have more product available” actually means “we suck at organisation”. This argument stacks up at retail, where there’s a limited amount of shelf space, and customers don’t want to wander around a massive warehouse or to squint at shelves of tightly packed boxes looking for something, but not when you have unlimited shelf space and a cloud full of computers to index it in the blink of an eye for you (and make suggestions), and where a marketing campaign or friend recommendation can bring a customer instantly to the point of sale with the use of a simple link.

For Christ’s sakes platform holders, wake up to the opportunities of the channel. Stop being blinded by what works at physical retail, it’s really not the same. There are people out there already doing it leagues better than you (see pretty much any of the e-commerce leaders), and putting your fingers in your ears and saying it can’t possibly work  is both ignorant and doing a massive disservice to both customers and content creators.

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Business Health OGRE Personal

Refocussing

January 20, 2010 – 12:19 pm

lensSo, I’ve been a little quieter than usual since the new year, and that’s because I’ve been in  a rather reflective mood as I plan out how I’m going to spend my time in 2010. That’s right – planning! Talk about the final frontier ;)

Basically, as you may have gleaned from my previous post, I’ve been looking to make some significant changes to the way I do things in 2010. I spent 2009 reeling from a back injury and trying to figure out how to deal with that given that I’m self-employed (ie I don’t get paid when I’m not working, regardless of the reason), and a leader of an open source project (with the inherent time requirements that comes with). This meant working out on the fly how to stay afloat financially, and still keeping my own interests and open-source plates spinning, without slipping back into the ‘permanent voluntary crunch mode’ style which triggered my back problems. I can’t stress enough how difficult that transition has been for me – it’s not like anyone was forcing me to work/live that way, I did it because I wanted to, but then it suddenly had to stop. When you invest so much of your time and perceived identity in something, backing away from it is very, very hard.

Of course the economic climate wasn’t great either, meaning I spent a lot of time jumping around between many small projects, leading to more overhead dealing with admin & business relations. I ended up just going almost month-to-month on-demand, not  planning very much and just being grateful to be able to work a decent amount at all – which given how unwell I was at the start of the year was definitely something to be glad about. But, now I’m back on my feet and pretty confident of my future health again (within reason – I’m not going to be bungee jumping any time soon!), I’m ready to start being more pro-active again and to map out some plans.

One thing is for sure, there’s no going back to how I used to do things. My days of saying ‘yes’ to almost everything and being at the keyboard until past midnight most days, and most of the weekend, are gone forever. I don’t regret doing it, despite the pain it ended up causing me, because OGRE wouldn’t be here otherwise and I learned a vast amount and had a ton of fun – but I’ll leave that to the under-35s in future; have fun guys ;) From now on, I’m being ruthless and somewhat selfish about what I work on, and concentrating on things that maximise my personal love-growth-cash triangle. It means I’m passing on a lot more projects, and concentrating far more on things that are strategically significant to me, rather than anyone else.

I’m still planning to lead OGRE, so long as the community is happy for me to do so, but by necessity I’m stepping back a bit to let other people take more responsibility where they want to, and to refocus my time on mentoring and advisory roles rather than trying to be everywhere at once. We have some great people in the team and in the wider community, and I hope our MIT license will foster even more in future. Both I and the community have gotten used to perceiving me as the ‘go to guy’ in the first instance, with responsibility for pretty much everything, but in practice for some time now it’s been very much a team & community effort, just one that I happen to lead (and financially support where needed). In fact one of the things I’m quite proud of is the way so many others have picked up on the way I do things, and taken things forward themselves in a way that I wholly approve of. That’s open source in action, and I’m glad to be part of it, even if I can no longer have my fingers in absolutely every pie with an OGRE symbol on it :)

Here’s to 2010 anyway. It’s going to be different, but change is good.

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Business Open Source

“Commercial Source” licensing

December 14, 2009 – 6:33 pm

Making a living from open source is hard. Correction – making a living from writing open source software is hard – it’s incredibly easy to make a living from someone else’s open source software of course, which is why that’s what most people do :) At one time the popular opinion was that pure-play open source companies could make a living from support services, which works to a degree but I know from both my own experience and from that of others that it doesn’t work that well. Again, the best chances of it working are if you’re providing support services for software that someone else writes, because you’re only able to monetise the service, not the development. This actually discourages people from investing in development, and instead merely in deployment and ancilliary services which isn’t actually a good thing for core product development.

The best cases of companies funding open source are where they’re using it to deliver some other product or service which is directly monetised, therefore the open source development comes under their general R&D budget. Google, IBM and others fall firmly under this category, and you can bet that the largest open source software projects are funded this way – Apache, Eclipse, Firefox all pay their core developers like this. But, it requires a fairly significant level of scale to be able to do that, hence why it’s usually the giant corporations that do it rather than smaller companies.

The next favourite option is dual-licensing; the general set-up if you come at this with a commercial hat on, is that you pick a license that a lot of commercial entities will have a problem with extending from (ie GPL), then you sell them an alternative license; the idea being that you get the adoption via the open source license and make money from the commercial license. But, it can be controversial, as most recently discussed by Greg Stein in the Oracle / MySQL case.  The argument is that if your commercial license is just a proprietary license, and can be revoked and otherwise monkeyed with by the issuing company (or perhaps more importantly, its acquirers), you have actually been lured into a honey trap – the lure being that open source comes with certain protections, but that if you rely on the availability of the commercial license you actually have none of those and might as well have bought from a proprietary software vendor.

So, what to do? If you’re a small development company, open sourcing your product will definitely bring more people in, but if you’re not in the hosting / cloud business and don’t want to rely on services to earn your keep (who can blame you), what can you do to earn your keep except abandon open source for your main products (maybe splitting your time between proprietary and open source), or dual-license and face accusations that you’re fibbing about the true nature of your product for your commercial users?

Well, I’ve been wondering whether the problem is that dual-licensing typically falls back on traditional licensing concepts, ie that your commercial license looks very much like a normal proprietary license, which has all the problems of ‘what if my vendor changes the license conditions’ etc – when in fact it really needs to be more like a permissive open source license, with a payment condition. One of the great powers of open source is that it is ‘detached’ from the producer and compeltely predictable and immutable – once the software is out there, it can’t be taken away from the receiver and is always ‘whole’ in terms of the source code so no-one is tied in. There are also cast-iron source & binary redistribution clauses that are known up-front, and are again immutable, which mean everyone knows where they stand, forever. Why can’t the commercial side of a dual-license continue to do this, while at the same time generating a revennue stream for the company?

Maybe I’m being naive. But what about this sort of dual-license set-up for a library or toolset:

  • Default is GPL (and obviously free)
  • Commercial alternative license available, giving very permissive rights, but with these important rules:
    • The license is irrevocable once issued
    • The right to redistribute unlimited copies of derivative binary works is included with Apache-style conditions
    • The right to redistribute unlimited copies of derivative source to anyone under the GPL (for free) is included
    • The right to redistribute unlimited copies of derivative source under the permissive commercial license conditions is also included, provided the same original license fee is paid per receiver. Critically, the price and conditions surrounding redistribution may not be altered unilaterally by the licensor at any time after the license is issued (so once you’ve bought it once, the conditions and price for non-GPL redistribution are set in stone and cannot be altered unless both parties agree – say if the price is reduced later)
    • All software reverts to the Apache license if the company folds without selling the rights to someone else

This would mean that those choosing to opt for the commercial license would have the same kind of cast-iron guarantee an open source user has that once software is out in the wild and being used under some conditions, that the originator cannot possibly change that, ie take it away or change their right to modify and redistribute under conditions they agreed to at the start. To me, this seems to give the same kind of certainty over not being screwed over in the future as open source does, thus blunting the accusations of proprietary lock-in by the back door, but while generating some revenue for the developer too. It is, in effect, the same as a permissive open source license with the one addition that redistribution of the source to a new party requires either payment to the originator, or reverting to the GPL.

Now, of course there is still potential uncertainty around new versions of the software, but this is no different from open source, where your only guarantee is over what is published right now, not what might happen in future versions.

Does anyone know companies that use this model? My experience is that commercial dual licenses tend to be as restrictive as proprietary licenses, which then can justifiably lead to accusations that the open source license has been used as a shill to get people into a lock-in scenario. Is there really a ‘third way’ or am I missing the point?

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Business Open Source

Some CIOs don’t know what the hell they’re talking about

December 2, 2009 – 10:42 am

I picked this story up via Matt Asay and it pretty much summed up the frustrations I’ve had in the last 10 years when talking to certain people about open source – particularly when I was involved in business software. Peter Gyorgy, CIO of GE made this comment in a recent panel discussion:

“I think open source is great for own internal playground type of things but if it’s running vital mission critical applications – networks running on open source for example – then that is a huge, huge risk to the organisation,”

This would be incredibly funny if it wasn’t so damn indicative of so many CIOs, managers and other closed-minded, overly conservative IT people who have long since given up on trying to stay reliably informed and just believe what their vendors tell them. It’s especially amusing given that GE’s healthcare division runs its mission critical software on Linux, which their CIO seems oblivious of. And I would expect the New York Stock Exchange would be considered ‘mission critical’, and it runs on an open source platform (and interestingly the LSE is switching to Linux too) – so clearly not everyone thinks like this.

The one place where he does have a potential point, albeit skewed beyond all recognition is when he says:

“We are not here to be an IT shop, we are here to be the partner of a business and we shouldn’t put businesses operations into risk by running very low cost solutions,”

That’s a very valid point. However, it’s got nothing whatsoever to do with the choice between open source and anything else! This is such a common misconception. Open source has matured – if you need enterprise-level open source there are companies that are quite happy to take your money to remove the hassle and worry of system stability. They’re really no different from the Microsofts and Oracles of this world, except that the software they’re running your system for you on is open source rather than closed. That gives you an additional bit of leverage because if they suck, or if they try to pull a fast one on prices, you can actually get that enterprise management from someone else without having to change your software too. Try doing that when you switch from Oracle to Microsoft or vice versa for services.

You also have the advantage of not having to wait for a central vendor to hear your pleas for feature A or B, or a bugfix that might be low priority for most people but is absolutely critical for you. Instead of hacking workarounds and seething in the wings while you wait for your vendor to get around to addressing something they think isn’t a priority because it’s not affecting that many people, you can pay someone to fix it for you and submit it upstream, where it will undoubtedly get accepted far quicker than it would have got fixed if only a central vendor was looking after it.

You don’t have to be running an IT shop – although if you do, you have the option of trading your own time for monetary savings and greater agility – your support options are just different. Sure, they can be slightly more complicated if you let them be – particularly if you’re looking to save money or drive things in an optimal direction for your company such as tailoring the software – but if you want to have a simple 1-vendor setup using only standard versions you can do that with open source too. Delegating all support to a third party will cost you more but the option is there. It’s all about choice, flexibility, and empowerment – all things a CIO should welcome, not be afraid of (otherwise he/she’s probably in the wrong job).

I think too many IT managers / CIOs have a mental block which prevents them from being really committed to optimising their IT delivery, in terms of both spend, alignment with the business and agility for the future, because they’re locked inside a box of their own making.

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