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I'm actually working on a letter to encourage my city to make the transition from Windows to F/OSS.
I'm looking into starting a nonprofit organization to help sustain developers to contribute to open source.
Although building a company on the heels of the open source community flies in the face of the its spirit

No, this is false. Free as in speech vs. Free as in beer. Make all the money you can, just keep the software free (as in speech).

I understand the different meanings of the word free, I'm just pointing out that there's a risk that incentive structures won't create the desired effect.
This is a meaningful distinction, but as far as I can tell, not a practical one. I have never seen any way to make something free-as-in-speech without as a side effect making it free-as-in-beer. Speech itself is free-as-in-beer. Even if you charged admission for people to hear the initial speaking, the things you spoke are no longer yours to profit from once they've been passed on to others (unless you take measures to abridge their free speech). Can you name a piece of free-as-in-speech software that cannot be had without paying money? There definitely seems to be a tension there.

As far as I can tell, very, very few businesses actually make any money off writing and selling free software. They either open-source some tertiary part of a larger non-free piece of software, or they just give the software away for free and try to make money on support and consulting contracts.

I've been wondering for a while whether the app store model will foster more paid open source software. Theoretically, the app store owner can protect the original creator from unwanted clones, and most users won't bother to find and compile the source code to avoid buying the $2 app.

I've not seen much evidence of this so far, but StormCloud, a weather applet available on Ubuntu and Chrome, is one example (more or less - I'm not sure that the "Don't be a dick public license" meets strict definitions of freedom).

Here's another example, then: A while ago I found https://github.com/gjtorikian/Earthbound-Battle-Backgrounds which is an animated wallpaper app for Android. Between the dollar it costs on the store and the time it'd take to build it, I quickly chose to spend the money.

But, if the choice had instead been between a $1 closed source version on the store or an open source manual compile, I think I would have taken the build/install option.

App stores may also allow you to leverage trademarks on your project. Even if someone were to upload a free (as in beer) version, you could still forbid them from using the same name. With the current format of app stores, it seems like this would be a much stronger advantage then similar trademark protections for desktop apps.
BProwd.com organizes open source developers to create profitable projects where each contributor gets an equity split on the project.
Companies should sponser open source efforts similar to some pro athletes. Pro skateboarders make a living off sponsorships. They get free gear and travel expenses from their sponsors and in turn get their sponsors name out. More Organizations should do this for key open source projects. I guess you kind of see this with Joynet and Node.js
Heroku should not be put alongside Firefox, Linux, Django, etc. It is not an open source platform, only their client-site tools are open source.
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Summary: open source is a public good / has positive externalities, and thus is likely underfunded.
Excellent summary. The language of economics is often very good for succinctly communicating things like this.

As far as what should be done, that's a lot trickier. My inclination is that it should mostly be limited to universities and government having something of a bias for open source with very liberal licenses. That's a big vague, but I'm a bit tired, so it'll have to do. I do not think the government should get involved in funding software it doesn't actually need in a big way.

I'm not sure either. The academia model seems very ill-suited for FLOSS because, while it does incentivize releasing source so other people can use it, it doesn't incent any sort of ongoing maintenance or improvement except in the rare case where doing so can generate more papers and publications (which, unless the initial functionality was amazing, means that the released source will quickly become useless and bitrotten - saw it happen multiple times in Haskell-land).

One mode which does seem to work very well is Google's Summer of Code. For pretty modest investments, it seems to yield a lot of useful functionality, and because it piggybacks on existing projects & communities, the improvements seem to generally stick. I've watched the Haskell-related Summer of Codes for years now (http://www.gwern.net/Haskell%20Summer%20of%20Code) and there's been some great stuff accomplished via them.

What do we want from open source? For a long time, foss movement rallied around building desktop experience, but now given the prevalence of macs and non-desktop computing this seems to be no longer the case.

What kind of open source should we incentivize?

For example, do we really need to incentivize ten thousands of ruby on rails testing frameworks?

I would argue that grassroot open source needs help in discovery and reaching their audience more than they need "incentivizing", and discovery means filtering.

I think we should be incentivizing open source software and infrastructure that promotes peer-based architectures and descentralization of the control over data, for a start. How is open source going to displace Google as the search leader? That would be a good start, and things like PRISM would be less the powerful for it.
One area where open source makes a lot of sense is in government infrastructure. It lets governments avoid having everyone's data stuck in propriety formats and then extorted by software companies for access later.

The UK government, for example, has recently mandated a preference for open source: (http://www.computerweekly.com/news/2240179643/Government-man...)

Unfortunately, governments are still getting caught in proprietary solutions. Here in New-Brunswick, Canada for example, the government has just chosen an officially sponsored electronic medical record system for the province.

Unfortunately, they picked a proprietary SAAS system which means that if doctors signup, everyone's medical records will be uploaded to some private company's servers.

The company charges $24 000 per doctor upfront plus $400 a month subscription for continued access with a price guarantee for only three years. After all our medical records have been converted to their proprietary format at a huge cost (not included in the $24000), this company will be in a position to charge whatever they want.

The government gives incentives to doctors to signup to the proprietary system ($16000) and have given monopolistic exclusivity for at least three years to this system when it comes to connecting to hospital lab results.

There is actually a good open source alternative developed in other Canadian provinces. The OSCAR open source EMR is quickly becoming the most popular system in those provinces. Support plans often costs less than $100/month (it would be free if you were a geeky doctor willing to install and support it yourself). Somehow, the vast marketing and sales budgets of proprietary companies compared to the more minimal OSS sales push was able to sway our government into giving a quasi monopoly to a costly proprietary system.

I don't think incentives should be created and awarded to developers of open source work. That will only attract more of the type of coder you don't want developing open source code, causing a reduction in quality.

People work on open source projects because they are driven and motivated by the challenge of creating great software that lasts, the mastery they develop while doing it, and the fulfillment and satisfaction of making a contribution to the community of fellow hackers.

So how do you mean "incentivize"? Financial renumeration can often be had, by getting hired by a company that benefits from your open source project (this probably covers thousands of open source developers today).

But money isn't why people start open source projects, for the most part. What's their motivation? Pride? Political freedom? Helping the world? Depends on the person. Incentives need to be aligned with the individual being incentivized. But honestly, money isn't a good open source motivator. If someone wants to get rich, there are usually better ways via closed source.

Thinking about it, we should maybe be incentivizing existing businesses to support on-the-clock open source work by their own staff.
That government is best which governs least. -- Often attributed to Thomas Jefferson

Years ago, I read a biography of a prostitute and political activist. She wanted prostitution decriminalized, not legalized. She felt legalizing it would create problems. She cited Nevada as an example, where there is a fair amount of regulatory burden on the women but the pimps and johns still essentially do as they please. She just wanted the right to charge for services without risk of arrest.

I will suggest that since there is already open source, incentives are probably not a good idea. But removing barriers of some sort might do a lot.

I have thought a lot about such things over the years, not open source per se but, for example, how to make money from making information freely available. It is a challenge but can be done and has been for years (broadcast radio, broadcast tv, etc). So I would suggest you work on removing barriers rather than providing "incentives." Or at least balance the incentives piece with also removing barriers.

My 2¢.

Edit: Someone want to kindly explain the downvote? Is there some problem with suggesting a removal of barriers instead of providing incentives? Or this just a helping of lurv from one of my many anti-fans? Thx.

I think you got a downvote because I can't imagine what your second paragraph has to do with anything.

Also, broadcast radio, broadcast TV are not freely available, so they're poor examples for you to use. (They have licensing terms, prohibit rebroadcast, embed commercials that are not desirable with no legitimate way to remove them, you have to pay to get a DVD or watch on iTunes or Amazon, etc.)

Well, it looks relevant to me. Incentivizing something is similar to legalizing it whereas removing barriers is similar to decrimilizing it. And broadcast radio and TV work for my purposes as an example. They do not directly charge consumers for the information they share yet they manage to make a buck. I will note I am 48, so maybe I am remembering a broadcast era a lot of members here would not remember.

Note to self: Folks on HN routinely think sex and prostitution references are irrelevant, not on point, not a meaningful example, ad nauseum. Maybe someday I will remember it gets perceived that way, even though I think we are all adults and it should be nbd.

But thanks for the feedback. Have an upvote.

It's the flaws of TV and radio that make them no longer work as an example. The technology advanced to the ridiculous stage - we really are living in the future!, but the licensing did not. The laws enforce restrictions, and the content owners exploit them, to a degree that's absurd to most of us.
Thank you for the feedback. I think I see a bit of our disconnect.

My main interest is in the general model of making info/entertainment available to an audience for "free" while still finding a way to monetize it. Broadcast TV and radio have done that for a long time and there are some websites that exist which do much the same. There are no membership fees. You can read/participate for free. Yet the site owner somehow makes money. Some take donations. Some use advertising to pay the bills. Some sell merchandise. (And one invests in startups, which is way more complicated than my modest goals, so not a model I am looking to emulate but it does exist.)

Perhaps I am merely a fool, tilting at windmills. But that is the general model I am shooting for. The details on how that works varies, but that model has been around for decades, both before the Internet and, in recent years, on the Internet. It can be done. It is being done. I have yet to make it work, but it is a viable model.

Attach crowd-funded bounties to feature requests.
To a large extent, this is what we currently have...

A company needs an OSS feature so they hire one of the devs to work on the software, full-time.

There was an excellent talk on this same topic this week at the Open Source Bridge event in Portland. The topic was "No, I Won't Contribute to Your Open Source Project". Slides are available. http://opensourcebridge.org/sessions/957
I think the answer is yes, but with a huge caveat: incentives must be build around the social norms that made open source successful in the first place. Incentives built on financial norms would be disastrous and act as strong disincentives instead. Humans are weird, and we act differently when operating under financial norms than we do under social norms. Dan Ariely explains this quite nicely in a lot of his talks, you should google it if you haven't seen it.

This is why I'm really skeptical of things like gittip or other "we'll pay you pennies to spend hours of your life building open source projects" approaches.

I much more excited by the cultural shift that seems to be happening around "my github account is my resume". It's not just a "write open source as resume padding to get a better job" thing, it's an increase in the amount of social capital resulting from contribution to open source. Basically if people find out I contribute to a "good" open source project more people care and the people who care, care more than they used to.

I think this is an excellent incentive scheme. A popular open source project cannot generate enough revenue to pay me what my contribution is worth so it's impossible for them to incentivize me with money. But if my reputation is increased because my contribution is recognized and my peers think more of me, my ideas are more easily heard and my financial career path opportunities are expanded because of that reputation then I am highly motivated to contribute.

I think there's a big place for the patronage/sponsorship model as well (and the incentives to be a patron are quite similar), especially for getting the necessary but boring/less sexy things done. It can also push back, in one way, against the problem of reputation based incentives undervaluing boring but high-value work.

Right - the incentive needs to be consistent with the platform; this is why you bring a dinner host a bottle of wine instead of the equivalent amount of cash.
Would it be reasonable for a developer to ask, I want to devote 1 year of my time to open source project X, please fund me on Kickstarter to accomplish Y & Z?
I like the kickstarter model but it does put things in the world of financial norms. How much work are you going to put in to an open source project when the other guy working on it is getting paid by kickstarter money?

That said it's a great way to let people actually get what they want most from a project by putting something on the line to make it happen. For single person projects or small teams who are all getting funded I think it's nearly perfect. Certainly very exciting.

The only thing worrying is that it's much more likely for those funded projects to stop development when the money stops. Who knows if that will be an actual problem or not.

For larger projects, when everyone can't get paid from the pot, it's a bit tricky. I'm pretty sure that we'll see some successful projects completely implode from the internal arguments and demotivation resulting from allocating crowdfunded money.

Anyway, I could dream up fun scenarios all day but it's just predicting the future so it's probably all wrong. I think kickstarter type models are really promising for all sorts of things so people should go for it.

One thing to always keep in mind though: A human will happily do something for free for all sorts of reasons, if you start paying them they will be even happier for a while, then will normalize to just as happy as before. If you stop paying them they will never go back to being happy doing that thing for free.

Interesting question is why academia/research is treated differently from the OSS community. Think about all the money being funneled into research from government and non-government agencies and this is never considered penny pinching / charity. Why isn't there a similar channel for companies / government agencies to sponsor OSS projects?
Isn't this what gittip is for? It seems to maintain the right social incentives without turning open source into a rat race.