[IAEP] Sugar Labs or Sugar Daddy

[David Farning]

On Wed, Dec 17, 2008 at 12:59 PM, Caroline Meeks
<solutiongrove at gmail.com> wrote:
>
>
> On Tue, Dec 16, 2008 at 1:25 PM, David Farning <dfarning at sugarlabs.org>
> wrote:
>>
>> One of the challenges that businesses face is keeping their expenses
>> below their revenues.  Your grandpa would have said, "Don't spend more
>> than you make."
>
> I agree, over a period of time absolutely. But sometimes in business you
> have to make an upfront investment then get the return later. Consider
> buying inventory, or in the case I'm working with, creating the materials an
> curriculum for classes that can then be sold.  If we are making an
> investment we should have a simple model that shows us why we think its a
> good investment and how the money will be made to pay back the investment.

I hope that the second to the last paragraph about raising money for
specif well defined items covers the investment investment issue.  I
include conferences as investments in the community.  Yes, seed money
for content will also be a likely investment.  One of the core
components of starting a successful community based project is a large
enough base of initial material, that people are interested enough to
look at and contribute back to the project.

On the code side, Sugar Labs started with a big chunk of useful code
from OLPC.  But, yes I agree we are doing poorly on the content side
of things.  It will take a significant investment of some sort to jump
start the content side of the project.

> A big  +1 to all the stuff I deleted about how business works. i just don't
> want to clog the thread.
>>
>>
>> I am convinced that the correct business model for Sugar Labs, will be
>> a combination of licensing the Sugar and Sugar Labs brands to partners
>> and donations.
>
> David, here is where I am not sure I agree.  I see a number of other
> business model possibilities.
>
> My problem is I see freedom, innovation and mission diluted in the projects
> that are focus on licensing their brand and forcing payment for partner
> status.

Dilution of freedom is exactly the issue!  Sugar Labs needs to raise
enough money to cover expenses.  The question is how can we do that in
fair manner without diluting the important freedoms associated with
Sugar.  The key freedom in my view is _available_ everywhere.  A
reasonable trade off is 'time vs. money' branding allow Sugar Labs to
leverage that trade off. Got time but no money, grab the source and
build Sugar yourself.  After all, it is free(think fedora).  Got money
but no time, go to your local sugar certified partner and by laptop
with sugar preinstalled and a two year support contract(think red
hat).  Looking for something in between....

Yes, there is a dilution of freedom with the boxed and branded
product.  It is that dilution that pays for a good chunk of the
upstream development of the software that goes into Redhat!

  The obvious example is Moodle, where they limit the number of
> official partners in a geographical area. This makes it harder for companies
> to offer innovative services where Moodle is only part of a solution
> practice. It creates FUD about who can say what and how about Moodle
> services and hosting.

Branding comes in a number of different varieties. From
intrusive(think professional sports) to unintrusive (think linux).
Sugar Labs should be able to find a point somewhere between the two.
Geographically limiting competition by a band is common is some type
of business.  It is pretty hard to get permission from McDonalds to
open a new new franchise next to an existing one.  Exclusivity of
territory is one of the  promises one gets when purchasing a
McDonalds.  On the other hand, coke is willing and eager for anyone to
resell their brand anywhere.

> In my model of the perfect future Sugar is part of many different ways of
> solving a wide range of school, student and educational problems.  I want to
> see Sugar freely remixed and integrated to create local solutions.  I'm
> concerned that liscencing, even of just the brand will add a lot of overhead
> for the organization and make it hard for organizations to be creative about
> how they remix.

Licensing can vary in complexity.  Pay me $100 bucks and I'll give
you, or anyone else, a certificate of graduation from Dave's school of
Open Source Theory.  Work to get in, pay $10,000s, take tests every
couple of week over a four year period and you can get a business
degree from an credited college.  There is certainly more over head in
the college route. On the other hand, it is worth a bit more.  Again
Sugar Labs needs to find a balance.


> Here are some other views. I think they are not alternatives but opportunies
> for mix and match.
>
> A church type model - I'm actually not religous so maybe people who are
> members of churches can help with this. But my understanding is that all are
> always welcome.  A plate is passed and there is an expectation that you will
> give to support the building and the upkeep. There are often expectations
> around income to donation. In our case if you are getting money for Sugar
> remember to send some of that back to Sugar Labs Central for support.
> Churches also have specific fundraisers for specific causes.

It is interesting that you mention churches.  One on the models I have
been looking at for spreading local labs is how new Protestant
churches develop.  Lutherans are the quite common in my area.  Anyone
can start up their own church.  Find yourself a couple of people, a
pastor, and a place to meet and you are in business:)  It doesn't
matter where you meet. It doesn't matter how you come up with the
pastor.  Initially, when money is tight the group might meet in a
school.  The pastor might work at the chuch in the next town over.  He
or She may either volunteer their time or get paid a small amount by
the new church.  As the group starts to stabilize, a process which can
happen in a short as a few week, existing churches start sending their
old hymnals, pews, tables and chairs to the new church.  Almost like
hand-me-downs:)  Then after a few months, after the new church has
established steady attendance and donations, they can go to the synod,
a organization of local Lutheran chuches, to co-sign a loan for a
building or help pay the salary for a pastor.  The synod usually helps
pay for decreasing portion of the salary each year.  After a few
years, the church is expected to stand on its own.  A few years later
it is expected to donate to the synod to help offset the cost of new
churches.

> Selling services - having people give workshops, help deployments etc in

This is an area in which project need to be careful.  If they want to
develop a healthy ecosystem of partners, they need to be are not to be
seen as cherry picking the best services or adjusting the development
process to enhance their own sales

To foster a healthy ecosystem, partners must be able to compete ontop
of the collaborative platform.

> exchange for fees.
> Selling products - Selling books or Sticks at a profit.

Again the complication of competing with potential partners.

> Be an umbrella but charge for overhead - Projects that are funded under the
> umbrella give the main organization overhead payments.

Why would a project want to be under the Sugar Labs umbrella?  It's
not the infrastructure.  If you want a free wiki,mailing list, and
email accounts, there are hundreds of option available.  It is not the
fun filled conferences in a tropic paradise.  The value of the
Umbrella would be Sugar Labs reputation... as signified by the brand.

> No expenses - Everyone is expected to find a way to make themselves
> sustainable.

Now we are getting back to your original point about initial investment.

> Grants - Apply for grants for organizational overhead.
> In Kind donations

Good source of initial investment money.  Not so good for overhead and
administrative needs.

>
>>
>> Let's go get those in-kind donations.
>
> +1
>
> What do we need to do as an organization to help with getting in kind
> donations. Right now it feels like its all in Walters hands and that isn't
> scalable.

What would make it easier to lower the barrier to ask for donations?
The the biggest eye openers for me was the realization that people
give to Sugar Labs because we meet needs, not because we have needs.
When I ask someone to give, I am asking them to give through me not
too me.

david