Free Software Business Models

[davelab6]

Hi,

Over on the autonomo.us list, there's been an informal discussion
about if there are better and more profitable business models in the
Free Network Service space than in even the traditional Free Software
one.

So I thought I'd ask here about what free software business models
there are, exactly.

As someone looking to improve free software fonts, there are two
routes open to me: Find a way to get people who don't demand
proprietary-font-developer wages to publish free software fonts, or
find a way to pay font developers who currently work in a proprietary
software business model with a free software business model.

CSS3 has a method for linking fonts to web pages -
http://www.css3.info/preview/web-fonts-with-font-face/ - and this
appears to be the opening for free software business model applied to
font development; most of the incumbent proprietary vendors are
lobbying the W3C for a web font DRM format and refusing to serve the
market until then.

This situation will not last forever, so hiring existing professional
type designers is going to be a lot faster than training up a legion
of amateurs :-)

So I'm very interested to hear the business models that work
for free software, so I can try to roll them out for fonts.

Cheers,
Dave

[davelab6]

Hi,

Some clarifications:

2009/5/19 Dave Crossland <dave@...>:
>
> So I thought I'd ask here about what free software business models
> there are, exactly.

I understand this might become a long thread, and not too helpful to
me, but, I am interested in hearing a variety of business models even
if they don't appear to have any direct application to me.

> As someone looking to improve free software fonts,

I am not looking to maximize profit above all other concerns; I am
looking to improve free software fonts, and that could be done
commercially or non-commercially, but commercially so I can hire
existing trained professionals will be fastest.

Almost all other type designers are profit-maximisers and therefore
try to obtain the strongest, most restrictive monopoly they can find.
The market for that kind of font is totally saturated. For newcomers,
a less restrictive model seems to work well at breaking into the
existing market, and Jos Buivenga is a excellent example of this. Here
is his freeware EULA from
http://www.josbuivenga.demon.nl/delicious.html :

"Font license information

    * This font is free for personal and commercial use
    * The font file/software may be modified to suit design of system
requirements,
      but strictly for your own (personal or commercial) use. You may
not sell or distribute it
    * Embedding (in PDF's, Flash files and programs) is allowed
    * You may use this font for Font-Face embedding, but only if you
put a link to www.exljbris.nl on your page and/or put this notice /* A
font by Jos Buivenga (exljbris) -> www.exljbris.nl */ in your CSS file
as near as possible to the piece of code that declares the Font-Face
embedding of this font.
    * This font may not be distributed or sold -not online nor on any
media- without my permission
    * This font is and remains (even when modified) the intellecual
property of Jos Buivenga
    * Exljbris (Jos Buivenga) is not liable for any damage resulting
from the use of this font"

He then sells fully proprietary fonts at
http://www.myfonts.com/browse/foundry/exljbris/ and was one of
MyFonts.com's most popular vendors last year, thanks to this
freeware-loss-leader business model.

Since I'm committed to free software fonts, I think it would be
counterproductive to run a font business with free software fonts
upselling proprietary ones in this way.

Cheers,
Dave

[Don Marti]

begin Dave Crossland quotation of Tue, May 19, 2009 at 03:55:42PM +0100:

> As someone looking to improve free software fonts, there are two
> routes open to me: Find a way to get people who don't demand
> proprietary-font-developer wages to publish free software fonts, or
> find a way to pay font developers who currently work in a proprietary
> software business model with a free software business model.

The first business model in this area is likely to be
(1) hire people to make quick-and-dirty "good enough
for web" clones of proprietary fonts  (2) put up an
"Are your Web Fonts Licensed?" page to crawl people's
sites for proprietary fonts (3) offer to sell them
the clones.

> So I'm very interested to hear the business models that work
> for free software, so I can try to roll them out for fonts.

Besides just charging for services, it seems that
there are two basic business models for free software:
Commoditize the Complement and Sell Options on
Future Support.

Commoditize the Complement
  http://www.joelonsoftware.com/articles/StrategyLetterV.html
The idea is that you release the software to help
you get some other business, like Mozilla releasing
a free browser to get ad revenue from Google,
or Cypress Semiconductor releasing Linux driver
code to sell USB chips.  The software doesn't have
to be Free free--Adobe does the same strategy with
Acrobat Reader--but you might as well make the source
available to signal quality and possibly attract an
outside contribution.

Sell Options on Future Support
  http://www.onlamp.com/pub/a/onlamp/2005/07/21/software_pricing.html
Customers are willing to pay for the option to get
support in the future, even if they might not use it.
This is how Red Hat can survive selling software
subscriptions that aren't a complement to anything
else it sells.

There are many other reasons to release free software,
but those seem to be to be the two basic ones that
count as business models.  There are other ways to
connect Free projects to markets, but they aren't in
use as software business models yet.

  http://zgp.org/~dmarti/software/development-market/

--
Don Marti                                 [phone] mobile
http://zgp.org/~dmarti/
dmarti@...
See you at OpenSource World: August 11-13, 2009 in San Francisco

[davelab6]

Hi Don!

2009/5/19 Don Marti <dmarti@...>:

> begin Dave Crossland quotation of Tue, May 19, 2009 at 03:55:42PM +0100:
>
>> As someone looking to improve free software fonts, there are two
>> routes open to me: Find a way to get people who don't demand
>> proprietary-font-developer wages to publish free software fonts, or
>> find a way to pay font developers who currently work in a proprietary
>> software business model with a free software business model.
>
> The first business model in this area is likely to be
> (1) hire people to make quick-and-dirty "good enough
> for web" clones of proprietary fonts

Generally professional type designers, while not so wedded to
proprietary monopolising that they won't work on libre fonts at all
(there are some exceptions...) are not so mercenary that they don't
care what they work is as long as they are getting paid: They have a
principled objection to cloning others' designs.

While we may or may not agree to their principle of divine creators'
rights, we can see that if they clone proprietary fonts without
permission from the proprietors, their economic ability to win
proprietary job contracts will diminish (AKA, ruin their professional
reputation.)

There are also legal problems with this: the USA has no copyright on
type designs, just 14 year design patents, but, the UK has the normal
artistic work copyright on type designs as do other jurisdictions I
imagine. I need to research this in more detail because clearly there
needs to be free versions of "classic" designs (eg, Gill Sans, from
1926) but its cousin Johnston was "licensed" recently -
http://en.wikipedia.org/wiki/Johnston_%28typeface%29

> Commoditize the Complement
> The idea is that you release the software to help
> you get some other business,

This is my immediate business plan: Modifiable fonts' complement is
the knowledge-transfer of how to modify them. (its also the tools and
the textbooks, but they ought to be free too, right :-)

So I'm going to move out to Kerala where living expenses are cheap and
work on a curriculum, and then travel the globe teaching commercial
2-5 day font-making workshops to anyone I can market them to. I have a
friend who teaches Ericksonian Hypnosis in this way and he earns
plenty (although he also sells proprietary textbook materials...)

> Sell Options on Future Support

Fonts tend not to need much support. However, like software, "a font
is never done" so perhaps options on future development can work.

My understanding of Red Hat's business is that they do indeed offer
support, but, they also do more development of free software (as such,
ie "upstream," rather than dumping free KLOC over the wall) than
anyone else, and their business model can be viewed as such:

Find 2 people (or "legal persons") who want a feature added to a free
software program and would be willing to pay 100% of the cost for an
exclusive implementation, and offer them both a 30% discount for a
non-exclusive implementation. 70% + 70% = 140% of cost. Find 10
people? Offer them an 80% discount for 200% of cost. Then convert them
to a subscription for regular development (as Red Hat do today) which
benefits them as they have predictable development costs and benefits
you because you have a predictable revenue stream to pay salaries
with.

I believe I might be able to transfer this to fonts, but I'm not quite sure.

Do you know any examples of much smaller "boot strapping" companies
working in these ways?

[richbodo]

>> As someone looking to improve free software fonts,
>
> I am not looking to maximize profit above all other concerns;
>
> Since I'm committed to free software fonts, I think it would be
> counterproductive to run a font business with free software fonts
> upselling proprietary ones in this way.

Welcome!

Since you are interested in unrelated models...

For the sake of argument, any going concern that makes money, enriches
free software developers and spreads free software, is an FSB in my
book.  I'll only comment on my experiences with FSB models that create
and sell exclusively free software:

1) Widget Frosting++

Create and maintain free software that fills a gap in the GNU domain,
and package it with hardware and support services.  Creating your own
free software is an unnecessary complication of basic widget frosting.
 This model may work better with some capital up front, but generally
a great business model that bootstrappers with tech expertise can
handle.

2) Training

Hire experts in the use of a Free Software to sell that knowledge to
others.  Not so much of an FSB.  Only works well if you keep fixed
costs to almost zero and have unique, high-quality, high-demand
products.

After those two, I decided to sell shovels to the miners for a while.

Less frequently mentioned is that most people who write free software
consider it a profit center because they become recognized experts,
which increases their income potential.

All this feels a bid pedantic since you seem to feel there is an
opportunity with great potential in the font industry, the mechanics
of which you understand, that is yet to be capitalized on.

--
-Rich

http://rbodo.blogspot.com
http://www.linkedin.com/in/complete

Skype: richbodo
irc: irc.freenode.net, icltlfatppl
Yahoo IM: rsb_mv

[davelab6]

2009/5/19 Rich Bodo <richbodo@...>:
>
> 1) Widget Frosting++
>
> Create and maintain free software that fills a gap in the GNU domain,
> and package it with hardware and support services.

As http://www.digium.com did, right?

> 2) Training

> Less frequently mentioned is that most people who write free software
> consider it a profit center because they become recognized experts,
> which increases their income potential.

My biggest problem isn't fully proprietary font developers, but
freeware loss leaders like Jos B; freeware fonts get just as much
cheap publicity/exposure as libre fonts, I think.

> All this feels a bid pedantic since you seem to feel there is an
> opportunity with great potential in the font industry, the mechanics
> of which you understand, that is yet to be capitalized on.

I don't think I'll understand free software business until I'm running
a successful one :-)

[Stephen J. Turnbull]

Dave Crossland writes:

 > As someone looking to improve free software fonts, there are two
 > routes open to me: Find a way to get people who don't demand
 > proprietary-font-developer wages to publish free software fonts, or

I heard an interesting anecdote recently about why all free fonts for
Japanese suck: the people who have artistic talent don't want their
fonts used on porn sites.  This is one case where what are often
called "author's moral rights" really bind on free software, I think.

 > find a way to pay font developers who currently work in a proprietary
 > software business model with a free software business model.

Hm.  One unusual factor is, why would a customer be willing to pay for
a font in the first place?  For the same reason that movie stars are
willing to pay tens of thousands of dollars for designer clothing --
so they can get a unique look.  In other words, such customers get
positive value from high prices, because they are a barrier to entry
to the *customers'* rivals.  So you can sell the font under a free
license because in general the customer is not going to want to give
the font away.

What you can do, then is sell the font "cheaply" with a free license
(which the customer will value in case of defects, or a need to adjust
paramters for scaling that was not originally envisioned, etc), and
then charge them for exclusivity.

Of course in that case you'll want to have the contract say something
like "you get a free license, but *I* won't sell it to anybody else
for 2/3/5 years".  Eventually you want it to be not just free, but
available to the public, as well.

[richbodo]

>> 1) Widget Frosting++
> As http://www.digium.com did, right?

Very similar.

> I don't think I'll understand free software business until I'm running
> a successful one :-)

Could be.  Experience running any business will help.

--
-Rich

http://rbodo.blogspot.com
http://www.linkedin.com/in/complete

Skype: richbodo
irc: irc.freenode.net, icltlfatppl
Yahoo IM: rsb_mv

[davelab6]

Hi Stephen!

2009/5/19 Stephen J. Turnbull <stephen@...>:

> Dave Crossland writes:
>
>  > As someone looking to improve free software fonts, there are two
>  > routes open to me: Find a way to get people who don't demand
>  > proprietary-font-developer wages to publish free software fonts, or
>
> I heard an interesting anecdote recently about why all free fonts for
> Japanese suck: the people who have artistic talent don't want their
> fonts used on porn sites.  This is one case where what are often
> called "author's moral rights" really bind on free software, I think.

Hah. I know the OSI was involved in rubber-stamping the license for
http://ossipedia.ipa.go.jp/ipafont/ recently, which are said to be
high quality Japanese fonts. I know nothing about CJK writing systems
though so cannot comment on this.

>  > find a way to pay font developers who currently work in a proprietary
>  > software business model with a free software business model.
>
> Hm.  One unusual factor is, why would a customer be willing to pay for
> a font in the first place?  ... exclusivity

Yes, custom type design is the main breadwinner of most font
development companies, and software freedom at a lower price than
normal (always available for a price, but never using freedom itself
as a marketing angle) may be an effective way to crack that part of
the market. However, as you say -

> Eventually you want it to be not just free, but available to
> the public, as well.

 - and I expect that offering such bespoke services is much easier
after a brand becomes known in the market place for published works,
and that revenues generated this way can be reinvested into growing
revenues for published works too.

Thanks!

--
Regards,
Dave

[Stephen J. Turnbull]

Dave Crossland writes:

 > Hah. I know the OSI was involved in rubber-stamping the license for
 > http://ossipedia.ipa.go.jp/ipafont/ recently, which are said to be
 > high quality Japanese fonts.

The reason this came up on the LUG list is that a local OSS advocate
needs TeX fonts for use in presentations at his place of employment,
and the IPA fonts were specifically rejected as ugly.

I consider them technically high quality (they scale well and don't
produce artifacts at any (reasonable) transformation), though.

[Matthias Kirschner-4]

Hi Dave,

* Dave Crossland <dave@...> [2009-05-19 15:55:42 +0100]:

> So I thought I'd ask here about what free software business models
> there are, exactly.

Perhaps you will also be interested in this article: "What makes a Free
Software company?" http://blogs.fsfe.org/greve/?p=260

Best wishes,
Matthias

--
Deputy  German Coordinator, Fellowship Coordinator
Free Software Foundation Europe (FSFE) []              (http://fsfe.org)
Join the Fellowship of FSFE!         [][][]       (http://fsfe.org/join)
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[Don Marti]

begin Dave Crossland quotation of Tue, May 19, 2009 at 05:29:47PM +0100:

> Fonts tend not to need much support. However, like software, "a font
> is never done" so perhaps options on future development can work.

New startup will be offering hosted fonts:
  http://www.kottke.org/09/05/typekit-real-fonts-for-the-web

There might be room for a service that offers a
drop-in Free replacement with the same interface --
if the new company becomes the "Twitter API" of fonts,
someone could become the identi.ca of FaaS.

--
Don Marti                                 [phone] mobile
http://zgp.org/~dmarti/
dmarti@...
See you at OpenSource World: August 11-13, 2009 in San Francisco

[davelab6]

2009/5/31 Don Marti <dmarti@...>:
> begin Dave Crossland quotation of Tue, May 19, 2009 at 05:29:47PM +0100:
>
>> Fonts tend not to need much support. However, like software, "a font
>> is never done" so perhaps options on future development can work.
>
> New startup will be offering hosted fonts:
>  http://www.kottke.org/09/05/typekit-real-fonts-for-the-web

Yes, thanks for mentioning it and I'm tracking it already :-)

> There might be room for a service that offers a
> drop-in Free replacement with the same interface --
> if the new company becomes the "Twitter API" of fonts,
> someone could become the identi.ca of FaaS.

openfontlibrary.org is positioned for this :-)