John Gilmore on inflight activism, spam and sarongs:
Q: You are not a great fan of copy protection. But how shall intellectual property holders commercially survive in an environment where perfect copies are a part of everyday life?
A: I thought I knew that answer in 1989, but I wasn’t sure, so I started a business to see if I was right. Cygnus Support, later named Cygnus Solutions, got paid by its customers for writing free software and giving it away for unlimited free perfect distribution. We also sold commercial support for free software, to people who depended upon it. The company started with three people in 1989. We ran it on revenues (without investment beyond the initial $15,000 that the founders chipped in). We were profitable and had 75 employees when I left in 1996. We were bought by Red Hat for $600 million in stock in 2000, because we were the world’s leading experts on both a critical piece of free software (the GNU programming tools) and on how to make money from free software. The way I found to make money from unlimited cheap/free distribution of perfect copies was to go with the flow rather than fighting it. Encourage the world to distribute your work to every person on earth; then every person on earth becomes your potential customer. Build a commercial relationship with people who depend on your work; they won’t care if the rest of the world can have it, as long as they get your attention so it meets THEIR needs. Charge people for the act of creation BEFORE you create it (the same way concert tickets work); then you don’t have to limit where the created work goes AFTERWARD. For a fee, alleviate the troubles that come from too much information, too poorly understood, too poorly coordinated, too poorly documented: provide rapid, correct answers to customer questions. And, do the basics of any successful business: be honest, serve your customers, know your market well, treat your employees fairly, don’t be greedy, don’t do anything stupid. You’d be amazed at how easy it is to make money just by doing these things, no matter what your business model is. You’ll stand head and shoulders above most of your competitors, who are incompetent at one or more of these things. I’m sure the Cygnus business model isn’t the only way to make money from unrestricted distribution of perfect copies. I was content to find one. It made dozens of millionaires from the ranks of the employees. It made me far more money than I made from working at Sun. Now, tell me how *musicians* can make a living in an environment where oligopoly distributors steal their creative work as a “work for hire”, pay them by the hour for creating it, regardless of how well it sells, lock them in by contract for their next six works, and even then cheat them on the accounting. Then tell me how *programmers* can make a living under the same conditions (minus the cheating and the oligopoly). If we eliminated the cheating and the oligopoly, would musicians have about the same deal as programmers? I suspect that it’s roughly so.
Companies like Red Hat and MySQL AB have successfully pioneered service oriented business models based around “free“ open-source software such as GNU/Linux and MySQL. Which brings up a point that Russell Roberts articulated the other day:
One of the great revolutions of the 20th century was the transition of our economy out of manufacturing and agriculture into the oft-derided service sector as the dominant source of employment. In 1900, agriculture accounted for 40% of employment. The rest was closely divided between service jobs and what the government classifies as goods-producing jobs—mostly manufacturing, mining and construction. Incredibly, service-producing jobs, mainly what we call service jobs, outnumbered goods-producing jobs for every year of the 20th century. But in 1900, it was close. Service producing jobs grew steadily and by early in the 20th century, around 1910, service-producing jobs outnumbered even agriculture. Manufacturing employment surged around WWII, but not enough to pass the service sector, and since 1950, the proportion of employment in service-producing jobs has grown steadily while manufacturing has steadily fallen.
There are a number of questions that can be asked: is the field of software programming analogous to manufacturing and agriculture? What are the costs associated with maintaining in-house developers versus outsourcing work to coding farms in India, Russia and China? Or complimentary, adopting, then adapting FS/OSS packages such as OpenOffice and Apache into a firm. Is there a dichotomy between proprietary solutions and FS/OSS ones? Ad nauseum. The times, they are a changin’. Via Catallarchy.
