lca2011 – Business of Open source miniconf – session 2

Arjin Lentz – creating the business you want

– ex mysql
– left when 500 people
– growth in company revenue doesn’t always mean good elsewhere in business
– remote services for mysql
– no emergencies – time with daughter, sanity
– started pre-GFC, prices reasonable, published, stuck to.
– no emergencies = no worries after hours, do oncall infrastructure
= Pool of people who won’t work weekends
– biz processes = some cases no *real* reason why it’s done that way, but hard to change if other
things depend on it.
– hard to disrupt yourself
– no borrowing, external funding etc.- big affect on how run. See rules
– big growth , floating, being bought doesn’t always benifit customers
– lives below the big companies, keep pricing below them
– total value of biz-space is too small for “china” to enter
– value curve, invest in different balance of value for your product than your competitors, feature set
– nintendo wii, amazon
– list of cool books
– bigger clients require different sort of company to service

13 years of LWN – Johnathon Corbet

– most audience lwn subscribers
– establish 1998, 3 emplyees, x000 subscrbers, >100 company subs
– Programmed Cray 1 – #3
– drifted up to mid-level management in 96/97
– little correlation between work and reward
– Starting off “Linux Consulting” company ( eklektix.com ), start website to show how smart we are – not many $
– we’ll do linux support – became linux support partner – program went away
– linux training company – crowded market – didn’t work out
– Maybe online news company
– lesson – business skills matter
– lesson where money coming from – pay attention to what customers want
– be ready and will to change plans
– acquired by tucows. went for mainly cash
– seemed like good people, money over pure stock.
– after dotcom crash, tucows handed back.
– advertising revenue big drop from pre-crash
– business very cyclical
– real customers are the advertisers. Other sites did articles for advertising spend
– Blocked microsoft.com, hard to block all the other variations for the name
– other ads for dodgy products, soft core porn, political ads
– ruins customer experience, javascript, flash, popups
– hard audience to advertise to
– donations didn’t work
– July 2002 put up message that calling it quits
– $35,000 in tip jar over 1 week. “why don’t you try subscriptions”
– Nobody pays, Linux users less likely to pay.
– listen to customers, especially when they are offering money
– credit card company, reverted donation surge
– credit cards,; extra feels for: discount rate, transaction fees, “international charges”, affinity charges, some arbitrarily
– banks nervous about extending long to credit to merchants
– chargebacks. customer always wins. 5 chargebacks over 10 years
– credit card security, big dangers, huge potential downsides, pci compliance
– credit card lessons, keep money from somewhere else
– alternatives to Cc – 5% of stream, works okay, cost 4%
– Checks – pain to deal with internationally
– Corp PO cycle – big pain to deal with, Be patient
– other services, amazon. Haven’t investigated heavily
– lesson – have 6 months in the bank
– where are we now
– subscribers get access to feature content
– free after 1-2 weeks
– ability to disable advertising
– other features
– Basic cost $7/month , higher and lower cost alternatives, group subscriptions
– aligns interests with our readers
– people want to support us
– subscriptions are a business expense for most people
– non-cyclical
– 2008
– subs steady
– adverting dies
– many competitors die, freelancers writers more avaibale
– amazon affiliate , not good results and then amazon pulled plug on all of Colorado
– lots of revenue sources good. biggest business is 5% of revenue
– why doesn’t it work. audience is too small
– people don’t want to pay
– we are terrible at selling
– pricing is really hard, raised prices by 40%, minimal loss of subscribers
– “design the business as a functioning system” – hard to do with periodical