This article was first published on Open initiative’s blog in 2014. This is the second part, start by the first part if you haven’t read it yet.
The software industry to date has thrived by reproducing the manufacturing model it was created in. But now with the power of distributed peer-to-peer networks it could benefit from new, more efficient and fairer alternatives.
The Funding Dilemma
This is a different way. That’s why we created a crowdfunding platform tailored for free software. But as any other platform of that kind, it needs to reach a certain size to be sustainable.
All platforms of the so-called collaborative economy gather people so that they can do business together. But because of the network effect, the more people gather, the more value the platform has. And until the platform reaches a certain size, it needs extra effort to live. And after that size the bigger the network, the greater the value. That’s why so many platforms raise millions. So that they can communicate about it and make it grow.
But then you need to pay back the investors, which means that the platform needs to take some of the value made by the users. You end up with users working together, paying for the platform to grow, in order to pay the investors. From that moment on, the platform finds itself in a conflict between the interests of its users and those of its investors, which can lead to tensions. This issue has been raised a lot recently under different aspects, for instance in the analysis by Janelle Orsi of the recent lawsuit against Lyft, as well as discussions on who owns the sharing economy platforms and on the impact of the sharing economy on social conditions.
So how can we solve this conflict between the interests of the users and the shareholders? Just make the users your shareholders! And offering users a chance to invest in a platform they rely on for their own revenue is not only a way to prevent conflicts, it is also a good way to improve users commitment. Plus if you get a large number of users to join, it can bring the platform a good quantity of cash! For the users, it is a way to secure the platform that brings them their income, to make sure it doesn’t turn against them, and provide cash if a dividend is paid.
After all, we make the platforms for our users. It’s reasonable they should get involved in building them, and become part of them. It’s more sustainable and fair, and more collaborative.
By Sylvain Le Bon