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NeoOffice :: View topic - New way to get some money in the project
New way to get some money in the project
 
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mweil
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Joined: May 02, 2011
Posts: 68
Location: Hamburg, Germany

PostPosted: Thu May 19, 2011 2:03 pm    Post subject: New way to get some money in the project Reply with quote

Hi there,

as I sometimes read some posts here in the forum I get the idea that the NeoOffice project is, well how can I say it, not particularly well founded. With donations probably going down as the time goes on.

I thought about a possibility to stop this process and get some (needed) money into the project. One thing that I stumbled upon in the Internet is a service like Flattr. http://flattr.com/ For those who don't know how this works I will try to explain it in one (or two) sentence(s): With Flattr you can give a small amount of money to things on the Internet you like, for example articles, free software, and so on. The point is, that you make a small monthly payment to Flattr, and then just click on small "Flattr buttons" to donate. At the end of the month your amount will be split between all the clicks, and each click is worth a certain amount.

I don't know if this has been discussed here before and if it has I am sure that there are very good reasons for not integrating this on the NeoOffice Homepage. For example that it might encourage people to donate via Flattr instead of donating a larger amount via PayPal.

But I am curious what other people here think about this idea.

It would be a shame if a project like this which benefits Mac Users a lot would just dry out after several years. I would be very very sad to see that happen. Also I have a deep respect for Ed and Patrick and anyone else for running this project and spending probably a lot of free time and thought into it, with everything (especially problems and stress) that comes with it.

But other than donating small amounts or help translating I can not do very much, except making suggestions. So here I am, making a suggestion! Smile

Again thank you for all you work!
Martin
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netocp-1
Oracle


Joined: Sep 22, 2008
Posts: 225

PostPosted: Thu May 19, 2011 4:32 pm    Post subject: ... Reply with quote

I'm not sure about what the others will say about this.
I feel this way isn't so truthful. It could be but I think that Patrick nor Ed will change the paypal donation method. Just for aclaration, with paypal you can donate small amount as well, not only huge.

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-Samuel -
Someone who doesn't help to NeoOffice
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mweil
Captain


Joined: May 02, 2011
Posts: 68
Location: Hamburg, Germany

PostPosted: Thu May 19, 2011 11:45 pm    Post subject: Reply with quote

Hi.

Perhaps i wasn't making this clear. I in now way want PayPal to be replaced by Flattr. Flattr is just another way to (very quickly) make very small donations. Flattr donations are in most cases not more than 1$ per click, or less. But apart from the very small amount, I know a German News Site that makes several hundred Dollars out of this every month.

Martin
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pluby
The Architect
The Architect


Joined: Jun 16, 2003
Posts: 11847
Location: California, USA

PostPosted: Fri May 20, 2011 12:35 am    Post subject: Reply with quote

To be honest, I do not understand what you are proposing. It sounds to me like there are 2 implicit assumptions in your post. Sorry if this is a bit lengthy, but Ed and I have many years of experience with financing and running NeoOffice so I think it is worth summarizing that experience:

- More users add nearly 100% additional revenue

After running the NeoOffice project for 8 years, our experience is that this is false. Not only do administrative costs skyrocket with 10 times the number of users (cannot login, cannot download, why don't you support my old Mac?, etc.) but the revenue from $1 donors from 10x the number of users only doubles the revenue. We already have enough trouble keeping administrative tasks within 10% of our work hours so adding 10x to that administrative load for very little revenue means we have to hire a support person which means additional salaries, taxes, benefits, insurance, etc. consume any such extra revenue.

Also, that extra revenue is actually far less than $1 x N users as transaction costs will eat up most of those $1 payments. Companies like Flattr seem to keep showing up promising that they are the magical "micropayments" solution. The problem is that most people do not understand that all electronic payments have transaction costs and the reason that these companies target low dollar payments is because they can take a very high cut of the payment. Even Apple takes 30% of the cut from App Store purchases. Fortunately, PayPal has transaction fees similar to major credit card merchant fees but a $10 still costs no less than $0.50 in fees no matter where you go so paying that same $0.50 for $1 transactions only feeds the payment processor, not us.

- We are desperate

Let's get to the heart of the matter: every NeoOffice review site is filled with shouts and threats about how Ed and I "owe" the users free downloads, free support, free this, and free that. To clear up any confusion, we are not desperate and precisely because of that we have been able to run the NeoOffice for 8 years. If not enough NeoOffice users value what we do to pay for our very modestly priced services, then we can close up shop quickly and with very little pain.

Here's the deal: if Ed and I weren't skilled at what we do and weren't careful with our financial planning, we wouldn't have even started the NeoOffice project let alone keep it running continuously for 8 years. During that time, the NeoOffice code has been open source and yet no one has bothered to build a better product from our code. Sure, LibreOffice is now out there, but they are 100% funded by Linux companies, have no Mac engineers, and are merely using the basic Mac OS X code that Oracle's OpenOffice.org engineers wrote back in 2007 and 2008 when their "community" couldn't pull together a working native Mac OS X version to match NeoOffice's functionality.

I think the above has shown that there are very few people that have both the skills and the resources to do what we do. Just because a bunch of people don't appreciate the services we provide does not mean that we need to go beg them for pennies. For those users, OpenOffice.org and LibreOffice is available.

3. Producing software has massive economies of scale - To be honest, I sense that very few non-engineers understand how expensive software development is. While Ed and I were able to afford to donate the money and time necessary to get the NeoOffice project started many years ago and we pay ourselves last after all other project expenses, hiring more engineering and support staff is very expensive.

To be more precise, $100K in additional revenue per year (that is 100K more users at $1 each) does not cover the salary, equipment, taxes, insurance, benefits, and regulatory costs for a single new software engineer. Sounds like a lot of money? You are right. That is why Novell is probably paying $1.5 million or more per year to keep LibreOffice going and why Oracle appears to be growing tired of paying $15 million or more per year to keep OpenOffice.org going.

But doesn't the "community" contribute code? No. In our experience that is a marketing line invented by open source advocates. The vast majority of successful open source projects are run by businesses or employees employed by a business. Communities are helpful for generating documentation and light support, but improving a large complex product like NeoOffice and fixing the crashing bugs that we find in the OpenOffice.org code is not something users can rely on casual volunteers to do.

Patrick
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mweil
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Joined: May 02, 2011
Posts: 68
Location: Hamburg, Germany

PostPosted: Fri May 20, 2011 2:49 am    Post subject: Reply with quote

Thank you Patrick for this reply which gives me a bit more insight in how things work here.

pluby wrote:
To be honest, I do not understand what you are proposing. It sounds to me like there are 2 implicit assumptions in your post. Sorry if this is a bit lengthy, but Ed and I have many years of experience with financing and running NeoOffice so I think it is worth summarizing that experience:


Hm, ok obviously this is not going in the direction I intended. My proposal was to add another way to donate into the site. Nothing more nothing less.


pluby wrote:
- More users add nearly 100% additional revenue


I am not sure what you mean by this. I did not say anything about more users. My intention was to get some of the users that don't donate at all to at least donate a small amount.

pluby wrote:
Also, that extra revenue is actually far less than $1 x N users as transaction costs will eat up most of those $1 payments. Companies like Flattr seem to keep showing up promising that they are the magical "micropayments" solution. The problem is that most people do not understand that all electronic payments have transaction costs and the reason that these companies target low dollar payments is because they can take a very high cut of the payment. Even Apple takes 30% of the cut from App Store purchases. Fortunately, PayPal has transaction fees similar to major credit card merchant fees but a $10 still costs no less than $0.50 in fees no matter where you go so paying that same $0.50 for $1 transactions only feeds the payment processor, not us.


I just checked the fees that flattr uses, and it is 10%. So $0.10 for $1, of course this is still double of what PayPal takes. Granted, fees to transfer the money to your account are not included in this, but because you can transfer the money once a month or whenever you like I think this not a large problem.


pluby wrote:
- We are desperate

Let's get to the heart of the matter: every NeoOffice review site is filled with shouts and threats about how Ed and I "owe" the users free downloads, free support, free this, and free that. To clear up any confusion, we are not desperate and precisely because of that we have been able to run the NeoOffice for 8 years. If not enough NeoOffice users value what we do to pay for our very modestly priced services, then we can close up shop quickly and with very little pain.


Although "desperate" is not what I thought, I had the impression that the project could use some more money. I am sorry if I understood this wrong.
It is certainly good that you could "close up shop" quickly and with very little pain, but I think the goal should be not to be forced to do this.

I did not want to imply that I know how to finance or run such a project, I was merely making a proposal.

If in your opinion this would do more harm than good, then by all means, fine by me. Don't do it.

Martin
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pluby
The Architect
The Architect


Joined: Jun 16, 2003
Posts: 11847
Location: California, USA

PostPosted: Fri May 20, 2011 3:35 am    Post subject: Reply with quote

mweil wrote:
I am not sure what you mean by this. I did not say anything about more users. My intention was to get some of the users that don't donate at all to at least donate a small amount.


Users here means "expand number of paying customers". My point is that each additional block of new paying customers requires costs to be incurred ranging from time to implement a new automated payment system, risks such as chargebacks from payors who dispute their payment, to support costs to handle the new block of users.

mweil wrote:
I just checked the fees that flattr uses, and it is 10%. So $0.10 for $1, of course this is still double of what PayPal takes. Granted, fees to transfer the money to your account are not included in this, but because you can transfer the money once a month or whenever you like I think this not a large problem.


So what about the cost to implement the payment system? Or do Ed and I manually input a few thousand payments per month? In other words, no payment system is free. All require either a large upfront engineering investment (plus ongoing maintenance) to handle our user base. If you are selling a few dozen items per month, manual effort is no big deal, but a thousand new donations under this system would quickly overwhelm us.

Sure, automation could cut the processing effort drastically (assuming they even have a reliable API to automate to), but such automation for our current PayPal system took several hundred hours of work over the last 4 years. That is not a trivial cost and, implicitly, takes away development time from our core product. Ed and I already work an average of 60+ hours per week so to do such automation either requires hiring an engineer (which is expensive) or curtailing NeoOffice development (which threatens the long term viability of the project).

mweil wrote:
Although "desperate" is not what I thought, I had the impression that the project could use some more money. I am sorry if I understood this wrong.
It is certainly good that you could "close up shop" quickly and with very little pain, but I think the goal should be not to be forced to do this.


My comment was not directed at you. Instead, I kind of hijacked your post and used it as an opportunity to remind our many users (especially non-donors) that we run the NeoOffice project because, so far, running a project based on mutual benefit (Mac users get choice in office suites and we make a reasonable living) has worked.

But like all software businesses, there is no guarantee that that balance may continue to exist. My only point is that Ed and I are always prepared for change and we aren't going to bankrupt ourselves or work ourselves to death to chase after every last dollar. Instead, when our usefulness has passed, we'll just quietly fade away. I think that is why we have been around so long: we have been able to keep our liabilities and financial risk to a minimum so that we can quickly adapt when needed.

mweil wrote:
I did not want to imply that I know how to finance or run such a project, I was merely making a proposal.


I understand. I just wanted to explain some of the experiences that we have learned over that last 8 years. Bigger is not always better so wanted to explain how many of the hidden costs (both in time and money) that we would have to absorb can, in some cases, actually cause things to be worse than they are, not better.

Patrick
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