I’m posting this here because it involves a real project that I’m
starting that uses ruby and rails. The project should work fairly
well as a commercial enterprise using a model similar to Mysql or
Redhat. There are options for hosting the software, support services,
customization, etc…
I’ve also been thinking about using a non profit cooperative business
model. This appeals to me for a few reasons. First, I think the
combination of a great product, open source, and non profit might be a
really good marketing angle. Not that it wouldn’t also be a great
value, but face it, you have to do something to get noticed now days.
Second, I hate the pressure that investors put on a company to do
things that are not in the best long term interest of the company,
it’s founders, or the customers. I came from a company that self
destructed because they focused more on what investors would think
then what customers think, and I’m looking to get as far away from
that approach as possible. Also, I think people like transparency and
honesty, and I think the cooperative structure encourages that much
more than a typical corporation.
The first challenge though is how to fund a non profit? My first
thought was to get a small group of companies that would benefit from
the project and have them provide some initial funding, or even donate
some development resources. The other challenge, and the biggest one
IMO, is how to attract smart people to come work with you. Why work
for a non profit when you can go to some other startup and get shares
that might make you rich? While a non profit can certainly pay
bonuses based on performance, it can’t leverage stock like a
corporation can. Most startups pay a decent wage, but it’s the stock
options that really give you the leverage early on to attract the best
people and pay them later. There is absolutely nothing wrong with
that, it’s what entrepreneurs do every day, but it’s not an option for
a non profit.
Thoughts?
Chris