Open Investment

Posted 27 Jun 2003 at 22:06 UTC by lkcl Share This

What if we could pay our own way for open source software development: would you jump at the chance to take the initiative?

We lament the lack of sponsorship, of donations, of corporations willing to shell out to keep us employed: put in that quite stark way, it looks like we are asking for a free ride.

So, the responsibility for wishing to realise our project aims (free software) lies with us, not anyone else. to achieve that i'd like to propose that we band together to form investment syndicates.

the ultimate goal is to gain financial independence.

in this article, i'd like to outline what it means to have financial independence; why we should aim for that goal; finally, how i believe we should go about that aim.

financial independence

Financial independence means having a passive income that is sufficient to cover your expenses. Typically that means having assets that exceed any liabilities on them, where the assets generate income without you having to do any actual work.

That may sound like it's very very obvious, but when was the last time you checked your balance sheet, not to see if it balanced, but to see whether you fit the "poor", "middle-class" or "rich" profile?

the profile above is that of a rich person, where the difference between well-off and stinking is just in the degree of the assets owned.

a poor person's profile is someone who has very few assets (close to negligable), even less liabilities, a meagre income and slightly less expenditure.

where it gets interesting is the "middle-class" person's profile sits: relatively high income and expenditure; relatively high asset value; liabilities that match or exceed the assets.

such people typically own their own home, but have it mortgaged to the hilt to pay for the wife or girl/boyfriend's "absolutely essential" shopping sprees on the credit cards, or the kid's new bike, computer or funky-trendy shoes that cost more than frugal people would spend on shopping in a month.

the crucial and significant difference between rich people and middle-class people is that:

  • middle-class people's income goes to service their liabilities and their expenditure (the mortgage, the credit cards) and also that their assets generate little or no income
  • the rich have assets that generate income, and their income goes mostly into buying more assets.

which one are you, and what can you do about it?

well, there are plenty of books on these subjects, but here's some basics:

  • save 20% of your income, 30% if you have debts
  • get educated about finance and investment and i mean SERIOUSLY educated
  • never make an investment in an area you know nothing about (you'll be giving your money away to someone who will NOT thank you)
  • surround yourself with experts rather than fools.

i'll leave it at that because the books on the subject are written by people who have become successful, and want other people to be.

it's ironic that most such people say that they get very many requests for money, but very VERY few requests for knowledge on how to MAKE money...

what's the rationale and motivation, here?

a number of articles and diary entries recently lament the lack of funding of open source. if you believe some of the inflammatory and slightly scary observations made in one of my former articles, or even if you don't, you will note that those corporations who have invested in open source basically control the purse strings (at your expense) and consequently control what you work on.

taking that logically one step further, corporations basically control what you do NOT work on. and the projects that "matter" these days, that make a difference to their users, are horrendously complex: we lament, in only partial jest, the days when we could write assembly code in a week on our ZX-Spectrum or Commodore Pet 3032, and it would produce "wow" results?

well, sorry guys, but the "wow" factor is wearing thin on today's computer users. remember Terminator 2? where the film directors were going "wow" over the use of real-time wire-frame overlays, and the special effects were all hyped? i remember overhearing someone saying "what's so special about a silver man?" as they came out of the cinema: the technology was so smooth that it was lost on them.

our users expect simplicity, ease-of-use and software that second-guesses their every move (in some cases, literally, with AI plugged in that "learns" their user), but unfortunately, users don't actually appreciate just how much work goes into such technological advances.

so consequently, they expect more, but as their expectations are met with seeming ease, they expect to pay less.

so if we wish to keep up, developing software that WE believe in, we have at least TWO motivations for doing so whilst also being financially independent:

  • users are unlikely to pay (doubly so if it's free software!)

  • corporations typically control what we work on
    (even by offering sponsorship. how many strategic and critically important projects fall by the wayside because they can't get funding and take too much of an investment of time and effort to reach the "useable" stage so lauded by the cathedral and the bazaar papers)

what do we do, next?

the proposal i would like to put to you is that we band together to form investment syndicates. applying the principles of open source, we set up a web site with mailing lists, links to and articles containing information resources that encourage communication between people who wish to gain financial independence.

the site should NOT dictate how people should proceed. the site should NOT force people to sign a document stating that they MUST invest in open source. the site MUST warn people that they make investments at their own risk.

the site SHOULD be a resource where:

  • people can obtain information about how to make investments, whom to contact, what the pitfalls are: all the inside tracks and tips in the areas of interest to the potential investor.
  • where they can contact other people who wish to form a syndicate
  • advice on how to set up syndicate contracts, whether a company is best, a trust, charity or to use self-employed status
  • to pool resources (informational and skills as well as financial resources) and to learn from each other's experience.

KNOWLEDGE IS THE KEY.

how to find it, and how to apply it.

the ultimate purpose: to make enough money such that YOU are in control of what open source software you work on.


Several Problems, posted 28 Jun 2003 at 05:26 UTC by mirwin » (Master)

1. Need a business model that generates revenue to attract investors. This lack, in general, would seem to be what the lamentation is all about.

2. IIRC In the U.S.A it is illegal to solicit investment accross state lines from unqualified investers. "Qualified Investor" is a legal term defined by the SEC. Basically it means you thoroughly understand investing as played by the big boys and have sufficient capital that you can afford to lose the investment under consideration. You can participate in a startup if you work for the company or are an officer at the time of startup. You can also receive options as a form of employee compensation. The firm cannot solicit investment across state lines from unqualified buyers.

MySQL has an interesting business model. They give away their software so successfully that a commercial market for related services and licenses has emerged.

thank you!, posted 28 Jun 2003 at 08:42 UTC by lkcl » (Master)

mirwin, thank you for pointing these things out. these are, amongst others, are the sorts of things that this article was written to encourage: pitfalls to negotiate.

your points raise some issues that i should further clarify:

  • any business model will do: that is entirely up to the individuals to decide before forming a syndicate. the "open investment" site should be a repository of "boilerplate" documentation for like-minded potential syndicate members to pass over to their solicitors, bank managers and other experts that they know of and trust.
  • very interested to note the distinction of "qualified investors". i was not necessarily advocating at the very start that anyone [from the US] start from scratch to consider themselves to be a "qualified investor", however at some point in the future, as people become more experienced, they may actually be such, and therefore be able to invite other open source developers to participate.

    so, unless there happens to be some very rich or non-US-based closet open source investors out there, it is NECESSARY for anyone who participates [from the US] that they form a trust, charity or company.

    the line will have to be drawn very carefully between any [such US-based] company "asking for advice" from a mailing list and the other side "implicitly encouraging unqualified people to want to join a syndicate".

    perhaps it would be necessary to ensure that the "open investment" site is not based in the US, and that members of syndicates have to decide for themselves what information they make available, and to what degree.

example 1: professional gambling!, posted 28 Jun 2003 at 08:50 UTC by lkcl » (Master)

this may seem odd, but with enough knowledge, contacts and creativity it is possible to make money from horse racing.

KNOWLEDGE IS THE KEY.

i heard on radio four recently that a successful professional gambler, who had to give up and write a book after three years (presumably because he became too well-known!) had these three things to recommend to anyone wishing to become a professional gambler:

1) study the form

2) talk with the trainers

3) shop around for good odds.

whilst this is the sort of example that i PERSONALLY would not want to get involved with (because i have chosen to specialise in another investment area) it is a good example of how to successfully apply knowledge, communication and statistics.

heck, how many of us could NOT write a data mining program that analyses racing form!! i wrote one when i was fourteen, for pity's sake!!

slashdot, gotta love it, posted 28 Jun 2003 at 08:57 UTC by lkcl » (Master)

if you thought i was kidding about the expectations of computing going up and up, take a look at this.

what sort of investment of time and effort will it take the open source community to duplicate or take the lead in such projects?

example 2: property investment (aka real-estate), posted 28 Jun 2003 at 09:43 UTC by lkcl » (Master)

davidw gave us this link from the economist: http://www.economist.com/surveys/showsurvey.cfm?issue=20030531

it advises people to exercise caution in property investment because a house price crash tends to cause a much harsher effect on an economy than a stock market crash of the same magnitude. it also advises that large numbers of people are investing in property because of the low confidence in the stock market.

so... people with little or no knowledge of how to make money in the stock market are instead attempting to transfer their lack of knowledge into another area... uhmm...

anyway: here's a short-list of tips on property investment.

KNOWlEDGE IS THE KEY.

1) improve your credit rating, and then use it. and i don't mean go on a shopping spree. you can typically improve your credit rating by regularly paying off any loans you have IN FULL. if you took out another loan to do that: so what? :)

2) improve your communication and negotiation skills. learn how to approach people, learn the right questions to ask to get the most information from a seller and to put them at ease.

3) find MOTIVATED sellers and offer them win-win deals. there's no point in wasting your time and money on someone who believes that YOU should pay for their £50,000 fitted kitchen that is totally unsuitable for a rental market property and you're going to have to rip it out.

however, approaching someone whose property is about to be repossessed and sold at auction, and offering to take over their mortgage, is a win-win situation for you, them AND their bank. if the house goes to auction, the bank gets peanuts, the seller gets credit black-listed, and you could end up losing a really good property to another bidder.

4) look for "opportunities". a banged-up house that is advertised as "requiring modernisation" is a golden opportunity. after a MINIMAL amount of redecoration, the property's value is increased such that it can be re-mortgaged.

the money so raised can be used to pay the builders.

5) look for government grants!

in the UK, conversion to multiple-occupancy houses can qualify you for grants covering 50% of the renovation and conversion costs.

6) redecorate a property for rental, not for you to live in!

put showers ON the walls not IN the walls. magnolia and eggshell paint. increase the number of rooms, not decrease them. electric ovens NOT gas. combination boilers NOT immersion heaters. light-brown heavy-duty carpet. SIMPLE and MINIMAL pine furniture sufficient to sell the property to tenants with no imagination.

7) look for good mortgage deals.

in the UK, the present buy-to-let mortgage deals offer up to 85% of the property's value, and a 1-to-1 ratio of rental income to mortgage interest payments.

example: a "distressed" property valued at £187,000 requires a deposit of £27,000 on an 85% buy-to-let mortgage. the interest payments would be £650 per month. after doing about £50,000 of work on the property, the value would be increased to about £280,000 - an increase in value of around £90,000. the rent from the four rooms (or as two flats) would be £1,400 per month. and that's EXCLUDING rental of the garage at the back, in a town where parking is at a serious premium!

the rental income on this example property is more than adequate to cover the interest payments on the mortgage and any other finance that was needed for the deposit (don't tell the mortgage company that). and after revaluation and remortgaging, the interest payments could go up to £950 per month and you'd STILL be in profit, with the building work paid for AND the deposit AND your costs.

that's what i mean by having assets that cover your expenses AND generate income that can be used to buy more assets.

Motivational Self Help Reading, posted 28 Jun 2003 at 11:10 UTC by davidw » (Master)

Looks like lkcl got his hands on "Rich Dad, Poor Dad" or something of that ilk. Am I wrong?:-)

side note, posted 28 Jun 2003 at 11:24 UTC by yeupou » (Master)

mirwin wrote "MySQL has an interesting business model. They give away their software so successfully that a commercial market for related services and licenses has emerged".

It's misleading to use the term "give away" to mean "distribute a program as free software." It has the same problem as "for free": it implies the issue is price, not freedom. One way to avoid the confusion is to say "release as free software".

(from http://www.gnu.org/philosophy/words-to-avoid.html#GiveAwaySoftware)

rich dad, poor dad., posted 28 Jun 2003 at 13:18 UTC by lkcl » (Master)

uhm... how did you guess?? yeh, that's the one ;) could be condensed down into two pages or less of easily forgettable junk, for which _actual_ experience of "doing" is no substitute.

next step is that i'm also going on a course to get some advice on financing deals, and on negotiation.

practice what you preach.

independent wealth, posted 28 Jun 2003 at 14:45 UTC by mbp » (Master)

Hi Luke,

I'm certainly not going to argue against saving money, or trying to invest it wisely, or educating yourself, or using some leisure on doing free software. Those are all fine things.

Some people have criticized Kiyosaki for being exploitative. You might like to search for criticism before swallowing it completely.

My main point though is that in most cases becoming independently wealthy becomes an end in itself. People say it always takes longer than you expect, and the process of doing it changes what you think is important and interesting. You can forget what you were originally trying to do.

goals to achieve, posted 28 Jun 2003 at 15:22 UTC by lkcl » (Master)

hiya martin, good to hear from you.

[google.com shows kiyosaki to be the author of richdad poordad].

that book is just one of those "little gems". i've read a couple of others. it took me ages to actually be persuaded to read the darn things, i thought they were pathetic and worthless.

the main thing that they taught me was to not waste money on toys!

i know someone who was very pissed off that he had featured in the "top 200 world's richest" recently. the first reason he was annoyed was because his enemies had obviously leaked his name to the press and got him on the lists. the second reason that he was annoyed was because his net worth was so staggeringly underestimated.

this same person was asked recently what he intended to do with all his money. he didn't understand the question. when repeated slightly differently ("what's all this accumulation of weath actually _for_?") he went into shock, because he didn't have an answer.

in other words, this man, one of the wealthiest people in the world, has absolutely _no_ idea why he is accumulating assets.

humans are happiest when they have a purpose - goals to achieve.

so, one of the things that the syndicates might wish to put in the charter [of their company or trust] that they all agree on is that at least 10% of the profits, after a 5 year setup period or sooner if agreed, MUST be directed into goals A, B and C [e.g. fund internet connectivity]. and the "individuals" in the syndicate could qualify as recipients of a share of that 10%, IF they can demonstrate that they have fulfilled goal A, B, or C.

or some-such clause. there's quite a lot to think about, to make a cooperative framework actually work! [e.g. what if someone wants "out"? what if their share is large? how about giving at least 18 months notice and first refusal to the existing shareholders to buy them out? etc.]

in short: you are absolutely right. and hey, if after five years we all get so rich that we don't _want_ to do software development, then heck, let's PARTY INSTEAD!

:)

Unto the Last, posted 28 Jun 2003 at 18:28 UTC by badvogato » (Master)

everyone must earn his bread daily to carry out chores that does not benefit himself in anyway within his own understanding. If ALL can live financially independent, then, it is quite all right for one to demand that. Otherwise, why desire to be something one loath when others did unto oneself? Billionaires are far more dependent on the outcome of their finances than an average poor man. An average man is always poor if no woman understand and appreciate his labor. Isn't "Father, son and holy spirit" enough to live for for all men?

On the plus side, posted 29 Jun 2003 at 07:20 UTC by mirwin » (Master)

I recently saw a television news article regarding high unemployment in the technology sector in Colorado, USA. Part of the response has been the organization of services to match high tech professionals (MIS, computers, engineering, etc.) with companies that need their services but cannot afford them. The professional works for a fraction of their "market" earning power in exchange for stocks or options. Perhaps it will be helpful in refining your concept to write some of the organizers or participants.

How about investing *in* open source itself?, posted 29 Jun 2003 at 19:04 UTC by bwh » (Master)

This is a topic I've loved thinking about for years. I spent some time working in the financial industry and learned a lot about investment, and gave lots of thought into how it could relate to open source. I came up with a different twist than the author, that I'd like to share.

First off, I'd definitely echo what mbp said - if you are trying to invest in the stock market for the purpose of gaining an income to support yourself, this really is sort of orthogonal to open development, and can shift your focus from software development to stock investment (or real estate, or whatever). Requiring that some percentage of the income go into OSS impacts one's income/financial independence so puts the two goals at odds (and so sort of feels like a kludgy solution).

But back up and think about this more broadly. The desire for financial independence in this line of thinking is motivated by a desire to have the freedom and sufficiency to work on developing open source software full time, independent of the traditional corporate hierarchical structures that characterize how things tend to work today. Or in other words, "How can I get something valuable out of my work at furthering the Open Source world, without having to ass-kiss The Man?"

The solution given in the top article is to tap into the regular corporate investment system with the objective of getting enough income to satisfy one's basic tangible needs (food, shelter, etc.) so that one need not have to expend 40+ valuable hours of life per week to do that. But this has several problems as others have mentioned. For one thing, easier said than done! It takes money to make money, you have to become an expert in investment, it distracts you from what you really want, etc. etc. And in the end, your success is driven largely by luck and factors completely out of your control. Besides, if our investment goals are to enable ourselves to escape corporate controlled OSS development, wouldn't it be more in keeping with principles to _not_ invest our wealth in a way that furthers that system?

Wouldn't it be better if our wealth could be invested in ourselves directly, for the purpose of achieving our OSS goals?

Of course, this leads to the question of, if not invest in the existing market, what else to invest in? But I think an even deeper question needs to be examined first.

"What does investment mean?"

Investment is the process of using wealth to motivate the creation of more wealth. For example, acquiring assets that produce wealth directly and/or could be exchanged at a later date for more value than was initially put in. One important purpose of investment is to provide a cycle for the profits of inventions to be reused to create new and better inventions. This cycle is of benefit to civilization because those inventions help it better achieve the things it values. It is of benefit to the individual investors because it offers a way to become wealthier without having to do labor. It is of benefit to the investee because it provides them the resources to do the things they want to do without having to accumulate all the resources on their own.

In a way, it's a motivational mechanism. For the investor, it's a tool for them to get people to do things they feel is important. For the investee it's a way to challenge themselves while being their own boss. Given the large number of "uninteresting" problems in the open source pool, that few seem interested in working on (such as that last 10% of all those 90% done pieces of software), another motivational mechanism could be a very Good Thing.

So what we need is a cycle that takes the fruits of open source development and uses it to motivate additional open source development. A closed feedback cycle. So that, for example, by contributing 100 patches to add features and fix bugs in some OSS app(s), you gain wealth that you can use to get things you want later on.

I've been careful up 'til now to avoid talking about money. While plain old cash certainly is a form of wealth, and has been extremely effective in traditional investment systems, wealth comes in many forms, and it may be that some other form of wealth is the ideal currency for investment into open source development. Money is good because its a general purpose way to reliably store value that can be used down the road to make your life better or easier. But it seems to be a clumsy mechanism for open source developers given its limited role so far (the reasons which are probably well known to this audience).

So, to put this all together, here's what I'm imagining: A system that allows people who are interested in doing OSS work for gain to connect with people who are willing to give something in exchange for getting some OSS work done. This could be coding but I'm imagining that often the help needed is in the non-glamorous areas such as writing docs, setting up testing harnesses, creating logos, etc. The perfect situation would allow for and promote sharing of specialties - exchange something you really excel at for something you need but can't do, with someone who has the inverse skill/need. For example, a graphic artist could trade logo-making to developers in exchange for getting features coded for their graphics program. But instead of being a straight barter, there'd need to be some level of abstraction, so that the artist could store the "potential work" of the many developers and accumulate it into a lump sum that he could trade to, say, the principle developer of his graphics program, since obviously that's the guy that'd be able to add those features most efficiently.

Now, there's a few spots here that I'm stuck on, like how do you convert software into food, where does the wealth come from if not money, or if it comes from money how to deal with its issues?

But if those spots can be figured out, then we'd have a system with strong feedback to use open source's achievements and strengths to bring it new strengths and achievements.

Ways And Means, posted 29 Jun 2003 at 21:11 UTC by nymia » (Master)

Now, there's a few spots here that I'm stuck on, like how do you convert software into food, where does the wealth come from if not money, or if it comes from money how to deal with its issues?


This is a very question, one that is definitely I'm trying to figure for X number of years. At the moment, there are probably a lot of people out there trying also. One particular item related, I mean two software business model we can look at are GaragaGames who own Torque and EPIC, the Unreal Engine.

There is one guy who works at GarageGames (can't recall his name) who wrote about using Open Source as part of the business model. Maybe someone can hook up with the person and get him in here.

Not really a plus side..., posted 29 Jun 2003 at 23:15 UTC by cbbrowne » (Master)

If the stock is worth any real money, then the effect is that the company is paying them, by virtue of diluting other investors' investments.

And if the company "isn't public" yet, then the stock is so much waste paper unless the company actually makes it big.

There's lots of opportunity for this to be a bad deal for both sides...

investing in open source, posted 30 Jun 2003 at 01:52 UTC by mbp » (Master)

So what we need is a cycle that takes the fruits of open source development and uses it to motivate additional open source development. A closed feedback cycle. So that, for example, by contributing 100 patches to add features and fix bugs in some OSS app(s), you gain wealth that you can use to get things you want later on.

That's more or less how it works at the moment. I am motivated to work on open source by seeing all the other cool and useful stuff that people do.

How to convert between open source's "use value" and food, housing, etc is still an open question.

Luke writes

humans are happiest when they have a purpose - goals to achieve.

I think merely having the purpose is not enough; you need to be actually doing it. Spending all your time making money in the hope that you might eventually do what you want is not a recipe for happiness. Anyhow, you might die tomorrow.

To become independently wealthy is likely to require rather more than five years unless you're particularly lucky. Assuming a (optimisitic) net profit of 10% from your investments, you must have assets of at least 10x your desired annual income. Can you really save up 10 years income in five years, even with compounding? Perhaps if you work in a very highly-paid job, and then retire to a very frugal lifestyle.

Most people would not have the determination to do something they really hate for five, ten, or twenty years, however important the goal. It is likely that people will either drop out, or alternatively grow to like the high-income job.

Suppose your rich person originally wanted to save up money so that he could retire and be a writer. By the time he's actually become wealthy, making money has become a fascinating exercise or a goal in itself. It probably seems more interesting at this point than writing. Why would he want to give up something he's grown to enjoy?

People's expenditure tends to expand to consume their income, or at best to consume 80-90% of their income. Suppose you become a real estate or stock market investor to save up money to do open source. As you mix with people in that industry you are surrounded by flash cars and suits, and perhaps need to acquire such props to network successfully. After slaving away all year, can you deny yourself the little indulgence of an international holiday, when it's such a small fraction of your bank account? Why shouldn't you? But these expanded expectations make it harder to scale back and live on your savings. And after all, by this time you're finding investment pretty interesting -- perhaps you were deluded to ever want to do software. Why not stick with what you enjoy and what pays well?

Certainly sometimes people retire to more humble lives, but it seems like that's more to do with them being burned out or having a change of heart than because of originally planning it that way.

Successful people generally seem to enjoy their jobs. Spending most of your working hours on something that is just a means to an end does not sound like a way to either make money or be happy.

In any case, it's not like the IT industry is really poorly paying. I realize things are a bit tough right know and most of us have gone through disruption, but on the whole the means to be well off are available.

So as a way to find time to do free software, I think your original post is pretty flawed. Should hackers save more money? Probably. Should we all change careers from software to doing something more financially rewarding? I don't know how many people you will convince.

I hardly have it all figured out, but to me it seems like the recipe is to try and do something that you enjoy and that makes you enough money to live on, and to try to save a bit of it. If what you really enjoy is high finance then good for you! As a bonus you may be rich. If you really enjoy childcare then you probably never will be rich but you might be happy.

$0.02, posted 30 Jun 2003 at 03:32 UTC by tk » (Observer)

[mbp] How to convert between open source's "use value" and food, housing, etc is still an open question.

I suspect the two kinds of things aren't very compatible. Use value isn't subject to the Tragedy of the Commons, but food is.

[lkcl] (even by offering sponsorship. how many strategic and critically important projects fall by the wayside because they can't get funding and take too much of an investment of time and effort to reach the "useable" stage so lauded by the cathedral and the bazaar papers)

Er... "strategic"? "critically important"? It looks like what lkcl really wants isn't to write free software, but to bring down Microsoft. His "strategy" is to earn lots of money by investing in stocks, retire and write lots of free software, and watch as the winds of free software blow away the M$ Empire.

But why use such a roundabout method? It'll be easier to simply link up with Al-Qaeda, and get them to blow up the paragon of Evil Western Capitalism. :-) Or, for a less violent solution, one can follow lkcl's idea to a point, and play around with stocks -- Microsoft stocks. :-B

Open Source in the Business Model, posted 30 Jun 2003 at 05:36 UTC by chromatic » (Master)

nymia: There is one guy who works at GarageGames (can't recall his name) who wrote about using Open Source as part of the business model. Maybe someone can hook up with the person and get him in here.

Do you mean Rick Overman? I've some contacts at Garage Games and have been meaning to get Rick to write about his experiences for several months.

great!, posted 30 Jun 2003 at 08:40 UTC by lkcl » (Master)

some of the best and most encouraging feedback i've seen on an advogato article yet.

i've been thinking through some of the possibilities of this "open investment" approach, and i am very pleased to see that people have raised some of the issues, and even more so some that i have not.

onwards with some comments...

charity, posted 30 Jun 2003 at 08:41 UTC by lkcl » (Master)

everyone must earn his bread daily to carry out chores that does not benefit himself in anyway within his own understanding. If ALL can live financially independent, then, it is quite all right for one to demand that.

badvogato, you are weird and have a strange way of making your points. let me translate: badvogato is saying that it is not okay for everyone to be financially independent and at the same time be totally uncharitable.

there are two possible solutions to the issue of being in a position of financial or information richness:

1) make lots of $ and then give some of it, in an unrelated and completely altruistic manner, to charity.

2) whilst MAKING money, be charitable: even if you have someone absolutely by the balls, just pat them to say "i got ya" then let go and tell them that you'll give them a free pair of trousers if they sign the contract.

personally, i prefer approach 2). it can happen more frequently than 1), and it also can be used to make people feel that they are in that "win-win" deal situation such that they are less likely to walk away.

purpose and fulfilment, posted 30 Jun 2003 at 08:42 UTC by lkcl » (Master)

I think merely having the purpose is not enough; you need to be actually doing it. Spending all your time making money in the hope that you might eventually do what you want is not a recipe for happiness. Anyhow, you might die tomorrow.

good grief, i am glad you are keeping an eye on this article, martin. i had assumed that people would know that having a "plan" in and of itself is not sufficient :) thanks!

barter and closing the loop., posted 30 Jun 2003 at 08:51 UTC by lkcl » (Master)

So, to put this all together, here's what I'm imagining: A system that allows people who are interested in doing OSS work for gain to connect with people who are willing to give something in exchange for getting some OSS work done.

yes, absolutely!

going down one solution-route: you have the beginnings of a barter system. i've suggested to people before that they might wish to join a barter group. some of the largest barter companies in the world are multi-billion dollar industries.

despite that, some people might not find barter attractive.

[mbp] How to convert between open source's "use value" and food, housing, etc is still an open question.

now, if a syndicate's "charter" or "business plan" stipulates that in order for funds to be released, certain work must be completed, then the syndicate is a means to kick-start any "loops" it finds - as advocated above by a resource centre that can put people in touch.

the open investment syndication that i am advocating is simply _another_ tool to get open source going.

you are lucky, posted 30 Jun 2003 at 09:02 UTC by lkcl » (Master)

Er... "strategic"? "critically important"? It looks like what lkcl really wants isn't to write free software, but to bring down Microsoft. His "strategy" is to earn lots of money by investing in stocks, retire and write lots of free software, and watch as the winds of free software blow away the M$ Empire.

tk, i thought about ignoring your post, but thought it best instead to correct some of your misconceptions. please do not be offended if i do not spend too much time on considered language that cushions these contradictions of your assumptions: i have quite a lot to do, today.

1) not all strategic software is written by microsoft.

2) if i can write software that makes a lot of $ i don't really care if it's free or not, but i would prefer it if it was.

3) my goals towards microsoft are to keep them honest and to be their nemesis in the same way that i would consider myself to be open source's nemesis.

4) i have absolutely no experience of the stock market and how to make money in it. it seems also, to me, that the stock market is open to corruption and manipulation by people with trillions of dollars of financially unregulated money. consequently i have no interest in putting my financial affairs at their mercy.

we are as insignificant to such people as a single eskimo peeing in a frozen wasteland.

5) retirement is quite difficult to do if you have to watch your back all the time because you took on a large corporation and the much more powerful people who want to see that corporation, and the control over ordinary users it represents, persist in its present form.

please do not adjust your eyesight, there is a fault in reality.

back to our normal programme...

sticking at it, and getting educated., posted 30 Jun 2003 at 09:21 UTC by lkcl » (Master)

Most people would not have the determination to do something they really hate for five, ten, or twenty years, however important the goal. It is likely that people will either drop out, or alternatively grow to like the high-income job.

most financial projects need kick-starting.

my experience has been that, after seven years, things are beginning to turn around. i have hated not being able to pay off my car (a toy), buy a better computer (a toy), give my wife some $ to buy another horse (a toy), build a robot-wars competitor (a toy), buy a house with stables (an income-draining asset). i have hated having to turn down good jobs because they didn't pay well enough, because i needed to continuously pour $ into keeping hold of my assets.

but you know what? i'm REALLY PROUD that i've stuck at it.

just recently, however, i went to an introductory lecture on real-estate financing and dealing. and i was sufficiently scared at just how _little_ i know, and also sufficiently impressed by some of the success stories that the lecturer was describing, that i immediately decided that it was worthwhile getting educated a bit more.

it's been seven LUCKY years of investment: what i have done is a "bootstrap" mechanism but i've been pulling on ancient seven league boots that are buried in mud two feet deep.

in short, i believe that by having and applying the right knowledge, where i am QUITE prepared to listen to people who can demonstrate to me their expertise, i could make money a LOT quicker than i am doing at the moment.

which brings me back to the point about starting up the "open investment" site. i would LOVE to have known about such a site, i would have gone to it and read it and maybe even started getting involved, talking to people, asking their advice about where to get REAL world information, advice on how to think CREATIVELY about making money.

and keeping it.

and then using it in ways that will make me happiest.

Why not a modified traditional startup?, posted 1 Jul 2003 at 08:11 UTC by mirwin » (Master)

Why not use the examples of the successful startups (Red Hat, mySQL, Valinux, etc.) and create a startup around a product/distribution.

Pick potential category killer or large application, finish it and polish it up (serious debugging and version control), port it to all applicable environments (Linux, Mac, Windows) and develop training courses and a consulting list to sell to the Corporate sector. Gnumeric or Abiword might benefit from this if the majority of their developers were interested.

The advantage of this approach is: 1. It is partime 2. If it pays off, the pay is in cash via consulting fees, training, installation services, etc.

On the negative side ..... even if it never pays off, presumably the virtual company has improved some open source tool and enjoyed the work performed in pursuit of the elusive cash opportunities.

On the seriously negative side, the company has to get organized, negotiate partipation methods and values, and expend some effort (or cash) on overhead such as marketing and sales.

Graphics Information Systems are a possible prime opportunity if done well: Good integration between the database and the CAD interface that the user experiences loading the program. Some of the current ones focus on extra graphics for printing and presentation rather than the CAD operator. GIS systems are typically expensive and used by government entities with large stable budgets.

startups, posted 1 Jul 2003 at 09:08 UTC by lkcl » (Master)

mirwin, thanks for the suggestion.

i would like to see a large number of part-time open source investors and developers being in a position to decide, at the drop of a hat, that yes, they really want to see such a start-up idea funded and succeed.

oh - or, are you suggesting that as a _means_ to fund other projects, create a product / distribution startup?

so, the principle is to use our OWN expertise, our OWN knowledge, and leverage THAT as a means to make money?

hmmm :) nice idea.

Reply, posted 2 Jul 2003 at 17:57 UTC by nymia » (Master)

Do you mean Rick Overman? I've some contacts at Garage Games and have been meaning to get Rick to write about his experiences for several months.
No, I'm sorry it was probably not GarageGames. I think it was one of the developers at BraveTree who commented about it. The list is busy that I just couldn't find the right page, there may be one from GarageGames but it is definitely not Rick.

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