Long-term financial sustainability for Loomio

@simontegg I see your point that you want to draw capital resources into the commons rather than merely discriminate against capital. Fine.

So, with the CBRL idea, you say: "if you aren't contributing back value, you aren't allowed to even run this software / read this text". I guess I understand that it's theoretically possible that lots of capitalist organizations decide to host their own copies of Loomio, but I'm not sure how likely that is nor whether the CBRL would simply push them into using proprietary competitors versus paying Loomio. I guess that would indeed be a matter of real-world trials.

But I think Loomio's success is more threatened by direct competition from well-funded proprietary platforms that do similar things than by the vague idea of capitalists getting to freeride as Loomio users. Without the CBRL idea, Loomio can already choose to require fees for certain types of entities to use the loomio.org hosted site, so it's just about those capitalists bold enough to host their own copy of Loomio (even if we offer reasonable fees to use the main site). Stopping those capitalists specifically might just lead them to using the proprietary competition instead, and it serves the interests of the commons to put proprietary software projects out of business. For example, the more corporations that use GNU/Linux (even if they don't help contribute to its development), the worse for the strongest monopolists in the operating system field (Apple and Microsoft). It's a good thing for the commons to hurt Apple and Microsoft's businesses (and without helping any other proprietary operating system even!).

The main problem with CBRL idea is incompatibility. That's already the biggest problem the the CC NC clause. Severing the commons into little incompatible boxes is the worst thing we can do for the commons. If we want anything like copyleft at all, the number one priority is to all stick to the same compatible copyleft licenses, and that means AGPL today.

I'm seeing the CBRL idea more as a 'conversation piece' during sales for both the hosted site and for host-it-yourself (which will become a lot easier once the docker file is ready), and less of a hard restriction on who can download it (which is unenforceable anyway).

Perhaps it is possible to have a CBRL compatible with copyleft licenses?

All my stuff is AGPL BTW:)

The CBR (drop the L) idea is perfectly fine as a concept for a differentiated fee structure for a rivalrous service! Loomio could perfectly well say, "the code is available under AGPLv3, and the website offers pay-as-you-can service to everyone who themselves contributes to the commons actively while charging a stricter fee for capitalist businesses who want to use the site's services without substantial contributions in some form"

Or something like that. Make the fees reasonable, and businesses will be happy that they don't have to handle hosting and support and all. That's fully AGPL compatible practice.

There is no possible way a CBRL as a software license can be compatible with AGPL, so promoting such a license necessarily promotes a rift in the commons.

Hi everyone! I think all this commentary is valuable as it builds a wider picture for us. Forgive me for not having much insight into licenses but I tend to agree with Alanna that a lisence won't change how much many people say "yes I'll help you this month and every month after that!"

Lets look at personal experience --

I'd love to re-invite the question - are any of you involved in a commercial venture or large organisation which uses loomio, and from that experience what ideas might you have about how to clarify a payment model whilst still doing so in a values aligned way?

We've heard ideas about subscriptions, pay what you can, creating extra value like building "loomio pro" with extra

features e.g. data migration is a big one for users even now. Of these examples that have been shared (and those yet to be shared), which ways feel practical and inspiring?

@wolftune I agree with everything in your first paragraph. Its just the nitty gritty of distinguishing the two paying and non-paying groups

I'm also thinking of when the loomio docker file becomes available. If for-profit businesses perceive a self-hosted loomio to be more valuable than cloud-hosted (for data privacy reasons), and this option is easy, and free, then I don't think I'm going out on a limb to suggest that the increased availability of this option might draw potentially paying customers away from a paid cloud-hosted service.

@chelsearobinson I don't imagine a discussion of licenses have come up in sales conversations. We're really all talking about the social norm of pay-what-you-can, and the best ways to promote that norm.

What I think comes up in sales conversations is the tension between a scarcity paradigm -"I'm paying for this because its scarce" and a pay-what-you-can "I'm paying for this because a believe in supporting the social mission". I'm pitching a CBRL as an 'anchor point' for the social norm of pay-what-yo-can and a 'way point' for clients passing between these two. "License fee" is one way of "clarify[ing] a payment model".

@wolftune I'm keen to learn more about the compatibility issues. That's somewhat off-topic so we can take this email if you'd like [simon] [at] [enspiral.com].

Yup @simontegg I totally hear you around finding a way to normalise a license fee. My comment was merely to stimulate more discussion from other people who may be watching this thread but not weighing in due to how technical I felt it was getting. Loving the way you are thinking, but keen to weave other threads! ;)

Hi. Been out of the Loomio-loop for a good long while, so hopefully these comments are not too obvious.

There are two types of answer to give to the original question; a general philosophical debate about SocEnt financing, and a pragmatic one for the specific case of Loomio. Answering the former would be nice, but answering the latter seems more relevant - what sustainable means varies with each specific case or instance.

So, pragmatically: how much do you need to make each month to be sustainable? What is the current user base? What is the current "commercial" user base. What is the projected growth of the user base, both commercial and non-commercial users? What is the projected growth of costs to be sustainable as Loomio scales?

If you can answer these you can work out what you need to charge and if that will fly.

In one sense sales is about highlighting the perception of value. Is Loomio adding real value to these commercial user groups? If so, talking with them will highlight how much that value is to them (eg how many hours of meetings are avoided per annum, plus better decisions made = time and money resources saved; or some other metric; do you have any measures like this?) When this is highlighted in the sales process it affects the willingness to pay and how reasonable the charge appears. (Do you have the capacity to talk to each major "commercial" user - is there an actual "Sales" role at Loomio currently? - and find out what the value is for them? Can this be automated via a questionnaire or something?)

Can some money be generated via targeting big "commercial" users to pay, some via pay as you like for all other orgs, plus some but not all from grants etc? What proportion of each becomes a sustainable model? etc.

At the two ends of pricing and sustainability are need/cost based pricing (how much does Loomio need to survive, perhaps even grow), and value based pricing (what is the value delivered by Loomio).

The enterprises that flourish usually have value based pricing, and a focus on upping the value while managing costs.

At almost any scale, opt-in payment schemes tend to leave groups underfunded for survival let alone growth. Alanna's analysis of Wikipedia was sobering. Wealthy parties like to pay nothing just like poor parties, and they are rarely generous without some acknowledgement, status or perk. Most of us are hit up to fund campaigns several times a day and are burned out.

The answers the Billy's questions will really help focus suggestions. If there are enough groups using it to support Loomio for just $10/month per group it's a very different picture from needing $100+/month per group.

Is there a minimum price, perhaps after a free trial, below which the group is basically saying there is no real value to Loomio and if you charge anything they would just go elsewhere for free?

Along those lines, for 'non-commercial use' the groups could be sponsored by someone in (or outside) the group through an opt-in, and highlight the people sponsoring the group with levels of sponsorship (bronze, silver, gold....) --- when the group isn't sponsored for a period I'd display "Unsponsored group - would you like to sponsor? (Sponsor)" as a nag screen at the top of the page, with suggested amounts. For commercial use, Basecamp has settled on free trial, then pay. If a commercial group cannot/will not pay, they will likely just use it as a "non-commercial user", which can be ignored for the time being.
The pricing, at a minimum, should be matched against costs and projected growth so Loomio is sustainable within 12 months.
Also to Billy's point -- getting someone to develop and do corporate sales could be a game changer (but those people are usually expensive)

@danielgoldman what do you mean about "Alanna’s analysis of Wikipedia was sobering. Wealthy parties like to pay nothing just like poor parties…"

I'm confused. Alanna was pointing out what I also know to be true: Wikipedia succeeds and thrives financially. Wikipedia isn't a "sobering" example of a problem. Wikipedia is a complete success financially, with an explicit focus on smaller donors because that aligns with their interests. They don't want big corporate donors.

The problem is that Wikipedia is the exception. The problem is that we don't have lots more similar cases.

Sue Gardner, in her talks, emphasizes how important it is to Wikipedia's focus on the general commons that they NOT be funded by the wealthiest parties, as that would inherently skew their focus.

Did I miss something or are you imposing your own interpretations on Alanna's and Sue's points where they were not present originally?

@wolftune - sloppy on my part not putting a break between the two comments - I think I was concurring with Alanna, did I miss her point?

Wikipedia thrives now because it has so many users (over 450 million). They raised about $37 million, or less than $0.10 US per user on the service (~$15 per person who actually donated, which includes some BIG benefactors http://wikimediafoundation.org/wiki/Benefactors ).

It was sobering to me that Wikipedia get less than $0.10/user, 97% donate nothing, and that's even with a small number of large contributors. Assuming Loomio needed $1M/year, they would need 10,000,000 active users to breakeven.

Alanna's analysis was that Loomio would raise only $20,000 if their campaign was as effective as Wikipedia's AND all registered users on Loomio were active. The point is taking the same approach as Wikipedia, and living on user donations, wouldn't provide sufficient funds for Loomio until Loomio's user base was much larger (50x? 100x?). It is wise to assume Loomio would not be much better at raising donations than Wikimedia.

The point on the wealthy not wanting to pay relates to the 'pay what you can' approach. Their have been some shining examples of short term funding that way (such as Ford's free oil change, where people were asked to donate what they wanted to a charity instead, and ended up donating twice what the oil changes would have cost). But usually people burn out on paying. The hope is the people with more money will continue to pay more because they have more, but in the US at least, they do not. Over time it moves to no one paying.

Pledge drives are different, and are event driven. There is much higher acceptance of that format, which in part depends on the nag and annoyance factor.

@danielgoldman I agree completely. WIkipedia's model is not going to work on smaller scales. I just want to be clear that there is nothing fundamentally wrong with the small percentage of users donating — in the sense that it's never to Wikipedia's benefit to get rid of the non-donors and make them stop using the commons. Non-rivalrous is the term here: it means more people can use it and it doesn't take away from anyone else. No actions should be taken to reduce the userbase!

Now, I completely recognize the fact that the simple Wikipedia donation model fails for almost everyone else. I'm spending my life working on a solution to this precise problem via Snowdrift.coop

@wolftune Agreed - All services based on user generated content, like Wikipedia/YouTube/..., depend on the non-paying users. If it was like free-to-play games used to be, 1-10% would pay, 40% would contribute to the commons, and the rest just use the commons. Part of the equation is the non-paying users on the whole contributing something of value that someone else is paying for (advertisers, donors, businesses...).

Is a similar dynamic for Loomio possible or desirable?

@danielgoldman If you're asking whether Loomio should have a strong community of volunteers who work to make the system better, it seems obviously the answer is yes.

The big, broad vision (the mission of Snowdrift.coop in part) is to get people to stop funding proprietary stuff just as much as to fund FLO projects. If people didn't pay for proprietary stuff or buy extra consumer junk they didn't need but they get manipulated into via all the targetted-ad economy, that's leave more funding for a greater portion of people to fund FLO projects (which are the projects that actually deserve support).

Another interesting way would be through the Loomio API! I think their would be many ways a Loomio API could help organizations make their own decision-making app, or make a different UI that perfectly fit their website. People might also want to include an embeddable version of Loomio on their websites (by copying some copy/paste-ready html code to their site). All this could be free up to a number of requests per month, then charged per request or according to an appropriate subscription plan.

Also, like @pjf I think tailored solutions for private hosting can be something to consider.

Yet another thought: do you think any group would be willing to pay for facilitation services? Having a good facilitator that is external to the organization could help leading the decision making process. This could also include help on finding the right decision making process for a specific org...

Hope that helps, sorry if the ideas already emerged somewhere else, I've been out of the loop for some time now..

@nicolaswormser Facilitation services are a huge factor! No system and rules will ever replace the value of a real person functioning as facilitator.

I think that's a HUGE opportunity. I see two aspects:

1. the more Loomio.org has some level of site-wide moderation and other things that provide reliability and security and other help, the more entities will be happy to use Loomio's service instead of self-hosting, and a discriminatory pricing for entities using the site itself (i.e. charge more for for-profit non-cooperative businesses) is compatible with the AGPL license (whereas a different software license is a stupid idea that should be rejected).

2. Loomio should focus on building a whole SERVICE of really trained facilitators who work on the system specifically and charge a premium rate for dedicated facilitation. That will keep everyone on the site, it will be super-valuable, and it can be part of an expanded system overall.

I think Loomio offering no-charge (but please patronize us on Snowdrift.coop!) alongside a premium integrated facilitation service is the ultimate solution.

Hi everyone! This is fantastic thinking. Especially around the scale issue and the wikimedia example.

At loomio we do offer facilitator services- thats actually why my name in loomio includes (Loomio Helper). This brings in an average of $10,000 per client (who are typically large organisations in the public or community sector who are unconfident with technology and want to improve their collaboration skills). But the cost of delivering these services makes it difficult to scale. We've used this is tide us over in tough times but ultimately we believe loomio as an online tool creates value for organsiations too, often without help! So we're interested in working out what price point and payment structure might enable those orgs to show us how much they value the tool itself.

Hope that is helpful!

@chelsearobinson

I think the top priority in this direction should be adapting and scaling the facilitation services. Offer training in facilitation specifically using the platform. Have different levels of facilitation certification. Charge or ask for extra donations for people wanting more advanced training. Offer different levels of facilitators at different rates (expert facilitation costs more than student-level facilitation), and recruit facilitators around the world, maybe even connecting to physical facilitation in in-person meetings, but connect it all back to Loomio. Focus on being a platform that gets facilitators PAID, so the platform becomes a space for facilitators to work and organizations to pay for the services, and take a cut for the costs of running and developing the platform. Remember: independent facilitation is valuable, so it's valuable to connect orgs to facilitators who are NOT part of the org otherwise.

I really strongly believe that it is the wrong approach to try to figure out how to just make the system on its own sustainable as this piece of independent technology. That is competing in a super-cluttered market and fighting against the tide of how technology works. The best bet in my biased view is Snowdrift.coop for that side of things.

I think the core of Loomio needs to develop around the interaction of facilitation services and the site. That holds great promise to being an amazingly powerful holistic combination that will both mutually reinforce each other and build the user-base and more.

The best money these days comes from platforms that help real people connect and provide valuable services. All the platforms that just sit there and mostly work on their web development are funded by surveillance and ads and other unethical things.

Loomio as a facilitation platform connecting facilitators and orgs all using the site tools… seriously, this is the way to go. Let me make it personal: Snowdrift.coop doesn't really need Loomio's tools in part because we're building our own, but we intend to govern with facilitated consensus, and we'd TOTALLY use Loomio if it were part of a facilitation system with an actual independent facilitator (assuming we can afford it). I think there's real demand there and it can have many different scales and levels if designed well and marketed well.

One more follow-up thought: I could image building a large community of less-than-expert facilitators and have a pretty modest-price where you share a very modest amount with people who basically are hobbyists who care about facilitation. Give them an option to take no income at all and donate it to the platform entirely. But if they like, they could get a modest fee for their facilitation work. Then all sorts of groups could pay very modest rates or something to facilitate a decision, and you maximize the userbase. The premium level would be more professional facilitators assigned to work longer-term with particular groups…

Imagine companies saying, "hey, I've heard this works great, let's just go try Loomio with a basic facilitator for $50 trial for one simple decision, and see how it goes…"

Thank you Aaron :) love the energy and vision!

What do others see in this?

awesome discussion:) I couldn't even have imagined our Loomio community would have seen yoursleves as so much a part of solving the sustainability issue even a year ago, so thank you!
I have learnt that our current position of free to public good organisations is still totally right, that a combination of custom, added value services and plugins define the paying territory, and that there is a whole bunch of work going in building a better ecosystem for growing and scaling social impact business some of which we at Loomio will follow up and figure out how we fit in with.

@vivienmaidaborn

To be blunt about my view: I am fundamentally opposed to any of the software being proprietary, i.e. to the artificial restriction of certain features when they have no natural extra cost (artificially blocking them to compel payment). If Loomio builds proprietary software plug-ins, it will no longer qualify to use Snowdrift.coop as our mission is explicitly to help projects that don't put artificial restrictions on things. Development work is scarce and needs funding, and to a degree so does hosting, and service (like facilitation) is absolutely a rivalrous scarce resource. What we're trying to do is work out funding without resorting to artificially locking-down things that are naturally free (as in freedom). I really hope Loomio sticks to AGPL for all the software running the site. I strongly oppose proprietary plugins. Being Open Source also means the potential for volunteers to help with development of course. Don't sacrifice that or take undue advantage of the community's good will by making extra parts of things be proprietary. Thanks.

@aaronwolf Why is snowdrift.coop building its own tools rather than just using Loomio?

Would Snowdrift be willing to trial and pay Loomio for facilitation? It would have to cover a reasonable wage for the facilitator with something left over for Loomio.

As @chelsearobinson said, we do a lot of paid consulting and facilitation work for clients (online and offline). But after a few years of experience in this space, and gratefully using the funds we've earned from that work to put back into improving Loomio, we have found that it's ultimately not a scalable long-term solution for us. We can charge enough to cover people's time and put bit back into Loomio, but it's not scalable in the way that a SaaS business model is scalable.

We want millions of people to use Loomio, and we need a revenue model that supports that growth, and grows with that scale. Anything that only scales at the limitations of human hours of intervention (like consulting and facilitation) is not the whole answer.

I think that collaboration and decision-making is key online infrastructure, essential for the future of our society and democracy. I want it to be huge, and I want it to be held in the commons, not owned by proprietary advertising platform companies. I think Loomio can be an important part of that sea change, but to do that we need to dream at that scale.

@danielgoldman Snowdrift.coop started building its own tools before Loomio was fully launched. I have very mixed feelings about it all and have been looking for ways to integrate and to use Loomio. There are advantages to monolithic all-integrated development though. We are focusing right now mostly on things that do not directly overlap with Loomio. We don't want to compete mindlessly. But we also need systems that work with our overall structure, and it's not clear where Loomio will fit in at this time, although I hope to discuss it further.

Snowdrift.coop is a non-profit co-op that is currently not even launched and has no real budget at all. We will be running our own fund-drive to get launched. When we are operating, if we have enough of a budget to hire facilitation through Loomio, we would consider it (the co-op membership would decide, not me directly). At this time, we could not pay for that nor do we really need it immediately. These are long-term considerations.

@alanna SaaS business models are mostly unethical and in direct opposition to the commons. It's not that interesting to talk about how well they scale unless you want to accept or to be oblivious to the fundamental problems. The majority of SaaS businesses are entirely designed around gaining substantial power over the users. I hope you are not promoting that direction or coveting that business-model's success and power.

If you are interested in democracy, as you indicate, then you have to accept that your vision of the typical profitable SaaS website is a fundamentally non-democratic vision that is in direct opposition to the aims of a better commons. If Loomio is to achieve a sustainable income, it can't do it by simply copying the general mechanisms of SaaS without undermining the basic values.