Could a for-profit business be built through crowdsourcing? | Hacker News Reader

Could a for-profit business be built through crowdsourcing?

4 pointsElite4 comments

I mean a full-fledged business including product development, management, HR, sales & marketing & profit sharing.

Open source has created some amazing systems & applications, some more complex than your standard business model.

I don't see any reason why a business couldn't be built up to produce and sell software or a subscription web app.

Is this possible? What would be the challenges? What would it take to build the infrastructure to support this? Anyone interesting in discussing this offline in more detail?

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It must be possible: there are businesses built around selling open source systems.

However, I personally don't see it as a particularly attractive business model. On the one hand, by "crowd-sourcing", I imagine you mean "farming out development work to unpaid volunteers". On the other hand, you'd need to have some kind of built-in reason why paying customers should pay you, instead of just using the (freely available) open source themselves.

Let's turn the question around: why would you want to try to "build a business to produce and sell software or a subscription web app" that is open source?

I used crowd sourcing for lack of a better term. Anyone doing work on the project would be an employee under a pre-specified profit sharing plan. Profit distribution may be regularly adjusted based on contribution to product development or sales.

The reason I didn't use "open-source" is because the product would be proprietary. The product code would not be open, but be property of the company, which the employees collectively own.

So, let me see if I understand this.

You want to develop a closed-source, proprietary piece of software. You'll hire large numbers of developers, and instead of paying them in cash, you'll offer them profit under a profit-sharing plan.

Is that it?

If so, it seems to me that the overhead involved (in finding and retaining developers) would offer little advantage over just hiring people outright, one at a time, as you need them.

Sounds like a regular old business to me.

Pay based on profit / performance = stock options and commissions

Contributors = employees

At some point the existing employees will say, "Dude why do we need more open source contributors, we're making enough money, lets just do it ourselves."

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