[p2p-research] a new funding mechanism for useful online services

Sat Jan 2 19:51:37 CET 2010

Hi Ryan,

you often refer favourable to the nordic countries, who rely quite a bit on
public services,

yet, when it is proposed, you critique it ...

as far as I understand the proposal, it doesn't involve any management by
government at all ...

but in fact, I'm suspecting a too quick reaction here, as in my reading, it
doesn't even involve government funding!!

see:

 « Greenwashing or conscious
capitalism?<http://blog.p2pfoundation.net/greenwashing-or-conscious-capitalism/2010/01/02>

Towards Public Open Source Services, An ingenious P2P Funding proposal by
Jeff Lindsay<http://blog.p2pfoundation.net/towards-public-open-source-services-an-ingenious-p2p-funding-proposal-by-jeff-lindsay/2010/01/04>
[image: photo of Michel Bauwens]
Michel Bauwens
4th January 2010

 An ingenious proposal <http://poss.gliderlab.com/> by *Jeff Lindsay*:

*“The point is this: Twitter is an important piece of infrastructure. Even
if it didn’t change for a long time, people would still use it because it is
useful. If there was no business behind it (which there practically isn’t —
got revenue?) … would the community pay for it? It depends on how much,
right? Well, say expenses are low and users are high … and you don’t require
everybody to pay the same amount, so some pay a lot, some pay nothing, and
some somewhere in between. And say you have enough people paying different
amounts that collectively make enough to keep it running (which we assume we
can get it way down there), well… then it will run. If they don’t … it
simply goes away. Why? It can’t run. Nobody is paying for it.*

*Now think about something else. How many useful bits of cool plumbing are
made and abandoned on the web because people realize there’s no true
business case for it? And by business case, I mean make sense to be able to
turn a profit or at least enough to pay the people involved. Even as a
lifestyle business, it still has to pay for at least one person … which is a
lot! But forget abandoned … how much cool tech isn’t even attempted because
there is an assumption that in order for it to survive and be worth the
effort, there has to be a business? Somebody has to pay for hosting!
Alternatively, what if people built cool stuff because it’s just cool? Or
useful (but not useful enough to get people to pay — see Twitter)?*

*Well this is common in open source. A community driven by passion and
wanting to build cool/useful stuff. A lot of great things have come from
open source. But open source is just that … source. It’s not run. You have
to run it. How do you get the equivalent of open source for services? This
is a question I’ve been trying to figure out for years. But it’s all coming
together now …*

*Enter POSS:*

*POSS is an extension of open source. You start with some software that
provides a service (we’ll just say web service … so it can be a web app or a
web API, whatever — it runs “in the cloud”). The code is open source.
Anybody can fix bugs or extend it. But there is also a single canonical
instance of this source, running as a service in the cloud. Hence the final
S … but it’s a public service. Made for public benefit. That’s it. Not
profit. Just “to be useful.” Like most open source.*

*So how do you take care of something like this financially? If it’s
running, it’s using resources. Well, again, if you expect this thing to be
financially self-sufficient, it needs to leverage the cost saving benefits
of cloud based infrastructure, but also take humans (which tend to be the
biggest expense) completely out of the loop. So you automate as much as
possible.*

*If you can, you ceratinly don’t want to have to fuss with all the details
of running and administering a system. This means even EC2 is not ideal.
Google App Engine however … there is not a single bit of system
administration beyond designing database indexing (arguably DBA, not
sysadmin). You don’t touch a Unix prompt. It’s all taken care of for you …
even scaling! What’s more, is it’s cheap and on-demand. These are perfect
foundations for a self-sustaining system… now you just need to get people to
pay for it!*

*So what, you set up a PayPal account and tell people to donate? Well,
you’re still in the loop if you have to take those donations and pay a bill
to Google. Not to mention convincing people they need to pay. Instead let’s
do this … this is the heart of the magic of POSS:*

*You use the same Google Merchant account that App Engine debits as the one
that accepts donations. This way no bank account is involved. Then you track
the money that goes into the account (using the Google Merchant IPN
equivalent). Then you look at your usage stats from the App Engine panel and
predicate future usage trends. Then calculate the cost per month. Then
divide the cash in the account by that and you have how long the service
will run. You make this visible on all pages (at the bottom, say) that this
service will run for X months, “Pay now to keep it running.” You accept any
amount, but you are completely clear about what the costs are. And this is
all automated.*

*That’s right. Once in place, you can completely remove yourself. If the
service is useful, people will use it. If they want to keep using it, they
pay for it. If they don’t, it goes away. But costs are completely
transparent, as cheap as possible, and on-demand. So perhaps it does go away
because it ended up not being useful. Somebody else stumbles upon it
(through a static page placeholder) that allows them to “put more quarters
in” if they want to use it. It’s also open source, so if people want to make
changes or fix something, they can. Various people in the community would
have the ability to deploy to the cloud … just like some in open source are
considered a canonical source for the source code (in the context of DSCM).
It’s not just “Software as a Service” … it’s “Open Source Software as a
Public Service”.*

*In effect, you get something kind of like Wikipedia — only leaner, and more
automated. They do fundraising drives to cover their annual operating
expenses. This is a batching approach that lean thinking shows us is
inefficient. POSS makes this a continual, ongoing process … making it much
more efficient. Not to mention completely automated.*

*Now the story above assumes App Engine, but you can tweak it to work in
other circumstances. The point is the story above is ideal and best to prove
the point.*

*The community pays for, maintains, and consequently uses this software as a
service, leveraging all the latest cloud infrastructure. And it all starts
by you making something cool. The cooler it is, the more people will use it,
the more it will cost, but the more people to split the bill with. And
different people will value it differently. This is a plus. Sure, some
people won’t pay for it. But some people will pay way more than many because
they have the money and may get more value out of it. This system can be
further be optimized to fully extract consumer surplus using tricks like
suggesting donations that get larger until there is resistance.*

*So much stupid crap is made on the web in attempts to make money. Most of
them fail. Yet you have completely valuable and useful things on the web
(Twitter), that aren’t making a dime. Perhaps capitalism isn’t the only
answer. And I know I referenced nationalizing at the beginning, but this
isn’t about socialism either. It’s simply about technology and
self-sufficiency. Certainly, not everything should be POSS. The best
candidates are reusable infrastructure bits of plumping and difficult
computation made easy. Infrastructure that will make it easier for you and
others to build a service that is worthy of a startup, not to mention
letting tinkerers do more with less.*

*Would this work for Wikipedia or Twitter? Considering their scale and the
complexity behind that, probably not. It’s hard to automate very complex
things. But as we continue to standardize industry practice, virtualize,
automate and raise abstractions … someday it may be possible.” *

On Wed, Dec 30, 2009 at 9:32 PM, Ryan Lanham <rlanham1963 at gmail.com> wrote:

>  On 12/29/09, Michel Bauwens <michelsub2004 at gmail.com> wrote:
>
>> here's the text Ryan, which I'm reproducing on the blog
>>
>> see
>> http://blog.p2pfoundation.net/towards-public-open-source-services-an-ingenious-p2p-funding-proposal-by-jeff-lindsay/2010/01/04
>>
>> since I've covered it, perhaps Sam and Sepp could have a look at the
>> services mentioned at the last paragraph?
>>
>> Michel
>
>
>
> It sounds mysteriously like "government."  Do people really think this will
> work?  I can think of 1000 problems almost instantly.  First, who controls
> the working release?  Governance will be a continual headache and there will
> be no clear way to identify who has the expertise and the commitment to be
> good at governance.  Second, no one will fund start-up risks--this only
> works where markets fail.  Third, you have to "nationalize" success by
> taking away risk venture incentives away from entrepreneurs.  Fourth,
> government programs are always rife with excessive start up costs and
> intensive free riding issues.  Nothing here addresses those. (And I work for
> government!)
>
> In the case of Twitter, lots of people are thinking through monetizing the
> engine now.  If it doesn't work, then it is entirely possible the owners
> will make it a co-op...a very standard and widely used market model.
>
> Sorry, but I see nothing new here at all.
>
> Ryan
>
>
>

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