Category: Economics

Mutual Benefit

Posted by on August 5, 2009

I have started objecting to the description of a contributor as a “volunteer”.

Volunteers are people who give their time/effort to an institution or group at some cost to them for little benefit in return. They usually do this as a labor of love, and therefor the argument can be made they receive some kind of emotional satisfaction from the exchange but it’s fundamentally categorized as a one way exchange where the volunteer is **giving** and the institution or group is **taking**.

Open source contributions are not market transactions. In a market there is a producer and a consumer, the transactions between them are to the benefit of either the producer or the consumer or both. Producer makes something, consumer evaluates the product and decides to give capital to the producer. Volunteer is a term used to describe an actor that is working for the benefit of the producer without reciprocal benefit to themselves to the extent that they benefit the producer.

Capital is the driving force in a market, it’s what enables the transactions. Workers are paid for contributions to product so that institutions can enable transactions where consumers are given a product in return for more capital. Capital is certainly a factor in open source, but it’s auxiliary. Capital may drive one side of the transaction, an actor paid to contribute to a product or consumption of a product used by the consumer to generate capital, but it does not drive each side of the transaction.

Contributors are not driven by a need to benefit a particular producer and are rarely driven by capital. In fact I can’t think of a way to describe open source contributions in terms of a market. In open source there is the **product**. The product exists almost as it’s own entity outside of the producers that created it or the consumers that use it. Because if it’s transparency and it’s ease of access and manipulation it cannot be viewed as a unit in a transaction within a market. Instead, all interactions need to be described in **relation to the product**. Contributors, institutions and individuals, that take part in production and those that take part in consumption take part in transactions with the **product**. This is an open source community, a group of actors taking part in transactions with a product.

The communities that thrive are the ones that remove barriers to these transactions and create tools that enable new transactions for more diverse contributions to the product. The transactions are not one-way, each transaction is two-way, benefiting both the product and the actor.

Rather than capital, mutual benefit seems to drive open source transactions. The product and the actor benefit from every transaction, with only a small portion of those transactions seeing capital as the benefit. The notion of a volunteer simply doesn’t exist in this model because there are rarely, if ever, transactions that only benefit a product at a cost to the actor. Actors **must** to be motivated and products are not “owned” in the traditional sense of ownership since their production is taken on by a community motivated by mutual benefit which tears down the relationship traditional market producers have with products.

Tools that are built to enable one sided transactions to a product usually fail because actors aren’t motivated by transactions that aren’t mutually beneficial.

A quick look at Firefox shows a very broad and diverse number of tools that enable mutually beneficial transactions. Although we often think about the new kinds of contributions that additions to Firefox itself will enable like [Personas](http://www.getpersonas.com/) or [Jetpack](https://jetpack.mozillalabs.com/) we also have a variety of tools that enable non-code contributions. Everything from that little button that reports a crash (benefits the product’s stability and improves your browser experience) to [SUMO](http://support.mozilla.com/en-US/kb/) (users seek resolution to support issues while providing the product with immeasurable usage feedback and bugs) are examples of tools that enable new transactions with the product that are mutually beneficial to the product and the actor.

One of my favorite things about working at Mozilla is being able to think about new kinds of contributions and how to enable them. There are few products with such a large and diverse ecosystem of users so the opportunities for new contribution is uniquely large so long as we create tools that are mutually beneficial.

Economics of web fonts

Posted by on July 21, 2009

Let’s say there is this market called “web content creators” and we are trying to sell them a product, a font. We want to sell them something that is going help make their web content a little better.

A really good way to sell them something would be to compare the dollar value of our product to the increased dollar value that will be added to their final product. Damn, their final product is free. Scratch that.

Since there is some labor and tools cost to creating their product we could compare our superior *professionally* created product to all the other tools they are using. Hrm…. it turns out all the tools and technologies used to create web content are pretty impressive and at a very low cost if not completely free.

Alright, let’s just hope these guys really like fonts. Let’s research the price of fonts of comparative quality and price our fonts below theirs. Uh oh, it turns out there are a lot of great quality free fonts to choose from already and it’s increasing every day.

In this market creating a font once and selling it a number of times does not seem like a smart business model. Maybe an alternative business model is more suited to this market.

There **are** other business models for individual font creators. The amount of people that **can** use newly created fonts is now increasing exponentially. Surely the creation of new custom fonts will still get some business as long as you’re willing to give them the font in an open format they can use anywhere.

Maybe the revenues aren’t enough to sustain an office and a half a dozen employees but it’s certainly enough for freelance font creators. I know a few web content creators that would love a one-on-one relationship with a font author and would pay a decent stipend for a custom tailored font.

Font creators will be fine. Font creation is sure to increase. But maybe the institutions that used to house font creation, “the foundries”, don’t have a sustainable model in this market.