pivot

[chadwhitacre]

Reticketing from https://github.com/gratipay/gratipay.com/issues/67#issuecomment-91400654.

I'm starting to think of this whole process as a chance to clarify our product, refocus on open culture—open-source projects, open products, hackerspaces, cooperatives, etc., shifting the focus from tipping individuals to paying projects, with individuals behind the scenes splitting the money. I have in mind Braintree's advice a few years ago (above at https://github.com/gratipay/gratipay.com/issues/67#issuecomment-6566710):

[N]arrow the focus, i.e., explicitly target open source developers for the first phase of buildout. If and when that is proven stable we can adjust our account to expand further.

[techtonik]

My thinks that transparency and openness are the main features of Gratipay. No other company can have this level of transparency, so we can greatly help open source projects by providing a transparent funding channel where people who are donating can opt-in to be listed on project pages etc.

[chadwhitacre]

Clarity is healthy for a product. We've got an over-broad "save the world" mentality whereas Patreon just wants to get YouTubers paid:

The goal of Patreon, and the goal of—okay, how do I say this without sounding like a jerk?—the goal of Patreon is not to change the mindset of the world or bring crowdfunding ... we don't have high ambitions. I'm trying to have artists make a living here. My goal is to help all these content creators who have all these fans—who can fill freaking basketball stadiums full of their fans ... Why aren't they making a living?

As Linus goes on to point out, this does change the world. It's a pretty classic business situation. Patreon gets to change the world because of their singular pragmatic focus, whereas we don't get to because of our pie-in-the-sky dissipation.

Right now we've got a really muddy product:

Who are we for? What are we doing? In rewriting our Product docs I ended up rewriting our Audience docs and I arrived at these two primary customers:

1. People who want to tip their friends and family.
2. People who want to run an open company.

On this ticket I'm saying we have to pick one or the other.

[chadwhitacre]

We paid (a relative lot of money) for a survey about number 1, and 76% of Americans are interested in it, with 52% able to identity at least one person they'd give to. Yet I think we have to pick number 2, because small feel-good tips aren't enough to sustain an economy. We're onto something big and interesting with Teams. Let's double down on that.

I propose that we abandon (1) and focus on (2).

• Phase out individuals giving to individuals.
• Curate receivers based on their relevance to open culture.

Gratipay is sustainable crowdfunding for open culture: open-source projects, open products, hackerspaces, and cooperatives.

[tshepang]

What do you mean by "Curate receivers"?

[techtonik]

How about we write a few user stories as a cartoon and give people a choice to guide our decision?

For any business the biggest benefit is to provide unique proposal to the market. How are we different from Patreon? How are we different from Flattr? From Bitcoin?

For me the stories is the start of the dialogue with the audience. We are talking about economy, but the product drawn above is just a tool to transfer money. Let's see how it works with two groups.

Friend to friend

Money transfers from friend to friend and from relative to relative is an easy business. People know each other, we know they know each other, so there is no legal problems. It is not the same as transferring money from buyer to seller, because in this case we are becoming a payment platform. And that means a lot of regulations (know your customer, taxes, laws, etc.). With F2F we just require people to be friends and like each other.

Open culture and teams

Open culture is mostly driven by volunteers, in their free time. It is very hard to change that dynamics, and many realize that there is no incentive to pay for something that is open and free if resources are limited. Only the experts can value this work, and they still depend on services that are being sold on the market. Few are paid through governmental taxes and grants. This is the current economy. For the alternative economy, we need not only to transfer money, but also provide a quality metrics about how the economy works. Covering full cycle of discover -> get -> use -> thank including the visibility into the process why paying is important for economy and where is the border of sustainability. Gratipay may provide a real life tool for testing Knowledge Economy and Circular Economy models based on real ability of people to contribute. For that, the product needs to be enhanced from just a tool for transferring money, to a tool that allows to isolate the different kinds of resources and track how these resources are distributed around.

For both of these purposes, the key value that Gratipay may provide is visualization and visibility into the economy process. Current tweet that n indviduals exchanges x resources is just a reflection of current economy model that we've mirrored, but it is just a start into what can be visualized.

[chadwhitacre]

What do you mean by "Curate receivers"?

I mean that we would turn away receivers that don't fit certain criteria.

[chadwhitacre]

For any business the biggest benefit is to provide unique proposal to the market.

Yes!

How are we different from Patreon? How are we different from Flattr? From Bitcoin?

Good questions. We're different from Patreon and Flattr because we're focused on open culture, whereas they are focused on content creators. We're different from bitcoin because we're operating at a higher level of abstraction (bitcoin is merely a currency/"currency").

[chadwhitacre]

I mean that we would turn away receivers that don't fit certain criteria.

This begs the crucial question, of course, "What criteria?"

Short answer: "Open __."

Long answer is long ...

[chadwhitacre]

"Open __."

I envision narrowing our focus such that we serve open projects. Modal examples would be an open-source project, an open product, or a real-world (geographically bound) cooperative such as a hackerspace. I want to encourage "open work," this idea that I shouldn't need permission in order to work. Why are jobs scarce when work is abundant? That sort of thing.

So I'm actually thinking that we would heighten the difference between individuals and projects on Gratipay, requiring projects that sign up to select an option:

• [ ] open-source project
• [ ] open product
• [ ] cooperative

We would turn away projects that fall outside of these categories.

[chadwhitacre]

Individuals would be able to give to projects (customer) and take from projects (contractor) and maybe receive from projects (employee), but individuals would not be able to directly receive tips from other individuals anymore.

[chadwhitacre]

We could also require every project to describe how interested individuals can start doing work for the project, and what compensation looks like. A project could use Gratipay to receive funds or to distribute funds (payroll) or both.

[chadwhitacre]

take from projects (contractor) and maybe receive from projects (employee)

Well, maybe they're both contractor relationships.

[techtonik]

First draft of alternative economy and at attempt to compare it to existing one.

Gratipay can bring simplicity and transparency in balancing this nasty thing.

[techtonik]

I am not sure that "openness" is the only criteria. Flattr supports all projects, not just open. PayPal is used by many. What do we provide to open projects on top of that Flattr and PayPal are capable of?

[techtonik]

I think that the value we can provide on top of that is stats - this is just how bit.ly survives the traffic and pays its staff.

[techtonik]

I also would like a platform that can be used as a "match" source for corporations to make the "corporate social responsibility" concept really working. Let people themselves choose what is important for them, who is doing the impact, export that data and let corporations match the donations of individuals that work for them.

[techtonik]

For example, for my $250 salary, $200 is going into basic needs and only about $10 I can spend on donations. From those $250 that I receive more than 50% is cut only by various taxes, and from $10 that I donate another 50% are cut by taxes and $5 transfer is probably cut in half by bank and payment transfer system. This is the core of the problems with donations.

If corporations will be able to match the flow, the donation could be substracted before I get my $250, so I get $240, but the receiving side could get twice as much as it had before.

[techtonik]

I am watching a video and I think I now understand your question more. It is not about "what we'd like our product to be in future?". It is about "what mentality does our product support?" meaning "what actual problem it can solve for people right here right now? and who are those people?"

[techtonik]

I think you're right in that Gratipay does the same stuff for teams that Patreon does for individuals. But Gratipay also encourages openness. I'd say it bring the missing open component to open culture that fuels open source - and it is open funding.

[techtonik]

I like the stuff that Patreon has art and emotions woven in. I wish open source projects had more art in them. I don't know if money can make this possible.

[chadwhitacre]

Soulstones! :gem: :dancer:

What do we provide to open project on top of that Flattr and PayPal are capable of?

Good question! We provide:

• ideological alignment—We are open, too! Hence:
  • open-source code
  • voluntary fees
• a nice payroll feature
• cultural change—YouTubers had Flattr and PayPal, but Patreon brought them all together in one place along with their patrons and that snowballed

[kaguillera]

So basically a "One Stop Shop" for giving to all of your favorite Open Source Projects, Open Products and Cooperatives?

[tshepang]

This is quite a radical departure from current Gratipay. I don't know where I stand.

[chadwhitacre]

@kaguillera Hopefully, yes, from the individual giver's point of view. However, we're privileging the open company's point of view. Our primary customer is the person who wants to run an open company (open-source project, open product, hackerspace, etc.) on Gratipay.

[chadwhitacre]

This is quite a radical departure from current Gratipay.

Yes, it's significant. I'm not sure I would call it a "radical departure" because we're not adding new things to the product, we're rather trimming some things away.

Il semble que la perfection soit atteinte non quand il n'y a plus rien à ajouter, mais quand il n'y a plus rien à retrancher. —Antoine de Saint Exupéry

[chadwhitacre]

We're basically talking about whitelisting certain activities we want on the platform vs. blacklisting certain we don't. The acceptable use policies of payment processors are blacklists. Kickstarter has a blacklist but they also have a sort of soft whitelist: https://www.kickstarter.com/rules. While we're so small a hard whitelist would be easier to enforce and would prevent us dissipating our energy in trying to support different communities.

[kaguillera]

Thus creating niche market for ourselves and hopefully adding value to our product?

[webmaven]

because small feel-good tips aren't enough to sustain an economy

@whit537, while I don't disagree with your choice of (2) as a renewed focus, I do disagree with this characterization of (1). The data from the survey showed very strong responses from older black women. I have a suspicion (unsubstantiated, at this point) that the use case that came to mind for that demographic wasn't 'feel good tips', but rather helping family members and friends get by without embarrassing them. That could be extremely powerful.

However, pursuing this would require a larger change in product design, and a very large and challenging commitment to listening and learning from users who are very different from the members of the team (which is why I don't disagree with your conclusion).

[chrisdev]

@webmaven I can back you with some anecdotal evidence. My Mom is currently sending tips to a relative who recently started college. Could not persuade her to join gratipay so she delegates the tipping to me

[chadwhitacre]

Well put, @webmaven, and interesting supporting evidence, @chrisdev. I think it's fair to say that choosing (2) would constitute a pivot for us.

[chadwhitacre]

Thus creating niche market for ourselves and hopefully adding value to our product?

Yes, clarifying who we're for. Patreon is for YouTubers, artists, and writers. Gratipay is for open source.

[chadwhitacre]

After a first pass through the Braintree docs, I'm thinking about how we might structure Gratipay to avoid the limitations of their Marketplace accounts. Could we find a way to be a regular merchant? That would give us access to a lot more payment methods and currencies. Funds would settle directly into our own bank account. We would have to find a separate vendor for payouts.

Here's the brainstorm I had while reading the docs: Gratipay is a license reseller (cf. Microsoft). We resell pay-what-you-want, self-billed licenses for open-source software. This would cover open-source projects and open products, but I'm afraid it would exclude open-source community building and probably hackerspaces, too.

We should have a conversation with a lawyer to see if this is possible.

If we could go this route, would we want to?

[chadwhitacre]

What would the implications be for the Teams/Payroll feature? I guess that'd be a separate line of business?

[chadwhitacre]

I just emailed the Bountysource crew (@wkonkel @rappo) for a lawyer recommendation.

I'm also looking at https://www.wilmerhale.com/intellectual_property/licensing/ per https://github.com/gratipay/inside.gratipay.com/issues/122#issuecomment-94026708.

[chadwhitacre]

To: https://www.wilmerhale.com/Michael_Bevilacqua/ Subject: inquiry re: open-source licensing business

Greetings! I run a start-up called Gratipay. We are a crowdfunding platform focused on the open-source community, and now that we've seen some traction we need to strengthen our legal foundation. In particular, we're looking to avoid classification as a money services business, and one idea for how to accomplish that is by restructuring ourselves as a relicensor of open-source software.

A customer of mine recommended WilmerHale, and I found you listed as the contact for the licensing practice. Does this sound like something your group could help us with?

[chadwhitacre]

Maybe @bkuhn would be interested in joining the Gratipay team to help us work on this?

@bkuhn The tl;dr is that it appears we have to make changes in order to survive the death of our payment processor. We're discussing options for restructuring to avoid classification as a money services business. Any cycles available to act as Gratipay general counsel and help us navigate this?

[chadwhitacre]

To: http://sfconservancy.org/about/staff/ Subject: recommendations re: Gratipay restructuring?

Greetings from Gratipay! Hope you're well. :-)

I believe the last time we spoke, Gratipay was renaming from Gittip. I'm writing now because it's time to strengthen Gratipay's legal foundation, and given your expertise, I thought I'd reach out to Conservancy for a recommendation if not a conversation.

The short story is that Gratipay needs to take steps to clarify that it's not a money services business. This is being driven by our payment processor going out of business and the stricter requirements of the other available processors on the market. One plan for achieving this is to return to our original focus on FLOSS, finding a way to structure Gratipay in terms of voluntary license payments for free software.

Any chance you could recommend an attorney or two that might be a good fit for us?

Or, given that a refocusing on free software licensing brings Gratipay closer to Conservancy's own mission, would you be interested in an exploratory conversation about what a partnership between Conservancy and Gratipay might potentially look like? :-)

[bkuhn]

@whit537, I appreciate your renaming and thank you very much for it. As for Conservancy or me personally providing legal help: (a) IANAL so I can't give you legal advice, and (b) Conservancy can't provide legal services, even on a consulting basis, to anything other than a 501(c)(3) charity, and even then it may be out of mission depending on the situation.

I have two lawyers to recommend. Aaron Williamson and Pam Chestek. I know both of them well and find their work to be excellent. Sadly, I'd doubt they'd do it gratis, but I'm willing to help get a campaign to give Gratipay extra money (and route some of my personal Gratipay money to the task, although it's not very much) to pay them to do this work for you. Let me know if I can help.

[chadwhitacre]

Thanks for the recommendations, @bkuhn! We do have a small budget for this, and certainly it's vital to Gratipay's future. I will follow up with Aaron and Pam. :bow:

[chadwhitacre]

Heard back from @wkonkel, though no solid recommendations for us. Emailing Aaron and Pam now ...

[mattbk]

A couple thoughts:

A key thing about Gratipay is that it is funded by its own service and the only fees are assessed to the funder, not the fundee. This should be attractive to anyone wanting to move money around, which is why the legal stuff is so important. It's definitely the cheapest way to help support someone digitally.*

https://github.com/gratipay/inside.gratipay.com/issues/180#issuecomment-91555599 I agree with technotik that limiting receivers to only FOSS projects is taking away a lot of what Gratipay has going for it. You guys are all into FOSS, but there are more creators out there than just other people who are into that. I've been trying to get amateur/underpaid pro athletes interested in the platform, because I think there is a niche that could be served (many people are great athletes but have no time or funds to pursue it because of financial obligations, but they are still good people who are contributing. See especially female athletes who, like most women, are underpaid relative to their male counterparts).

*An idea may be to sell sponsorship to cover even the service fees. Company X signs on to cover so-many-dollars worth of fees on a given Thursday, and savings are passed onto funders. There would be no private information given to advertisers during this process. Similar to how NPR is funded ("this program is supported by...").

[chadwhitacre]

I've been trying to get amateur/underpaid pro athletes interested in the platform[.]

Interesting. Thank you, and thanks for chiming in here. In talking with lawyers I'll try to keep open the possibility that Gratipay can continue to work for more than just open-source.

[chadwhitacre]

To: Aaron, Pam (separately, of course) Subject: inquiry re: open-source licensing business

Greetings! I run a start-up called Gratipay. We're a crowdfunding site with a focus on open-source software. We need a lawyer to help us with some licensing and business structure questions, and Bradley Kuhn from Software Freedom Conservancy recommended you.

Any chance we could schedule an introductory call for Monday or Wednesday next week?

[chadwhitacre]

5pm call w/ WilmerHale next Monday (April 27).

[mattbk]

https://github.com/gratipay/inside.gratipay.com/issues/180#issuecomment-94555059 Glad to give another perspective. Here's who I was referencing: https://gratipay.com/KathrynBertine/. Another example might be Alex Puccio: http://ht.ly/LS9zr

[chadwhitacre]

Here's who I was referencing: https://gratipay.com/KathrynBertine/.

I thought as much. You're nplainsathletes, ya? I've seen you on Twitter. !m @mattbk.

[chadwhitacre]

There are two motivations behind this ticket.

Motivation 1: Balancing Compliance and Features

The first motivation is to balance compliance and features. I'm seeing three relevant categories here:

1. Money services business (MSB, aka money transmission)—provide payments between arbitrary parties for arbitrary reasons, with indefinite escrow.
2. Marketplace—facilitates transactions between a buyer and a seller.
3. Merchant—sells something to someone.

(1) is highly regulated and consequently expensive to get into, and yet we're foolishly close to that line. We can't afford to actually become an MSB (even if we wanted to), so we need to back away from the line. Our clearest guidance on this comes from Stripe: non-directed payments and indefinite escrow seem to be the major sticking points.

(2) carries US-centric limitations for both Stripe and Braintree. This was our biggest problem with Balanced (https://github.com/gratipay/gratipay.com/issues/126), and we've worked around it with manual PayPal and Coinbase implementations. Balanced never called us on it, but we can't in good faith keep using these workarounds with Stripe, nor with Braintree if we come under their Marketplace product.

(3) gives us the greatest flexibility in receiving payments through Stripe or Braintree. Since our relationship with Stripe is overdetermined by now we don't really have this option with them. If we can find a way to restructure ourselves such that Gratipay is directly selling something to someone, then we should be able to use a regular Braintree merchant account, and we'll get a lot more flexible payins: 130 currencies, plus PayPal, Venmo, Apple Pay, and Coinbase. We'll be on our own for purchasing and payroll, however. We could keep using PayPal and Coinbase, but we'd need to find a US ACH provider to maintain parity with what we currently offer.

Motivation 2: Finding Our Niche

The second motivation is answering the question, who are we for? We can't be all things to all people, especially at this stage of the game when we have such limited resources. That's, like, business 101. Patreon swept the YouTube market by being for YouTube creators, after which they branched out to artists, writers, game developers, etc. Right now we're trying to be for open-source developers, and activists, and hackerspaces, and athletes, and @chrisdev's mom, and more. If we keep trying to serve everyone, we'll ultimately fail to serve anyone. If we focus on serving one niche well, then we'll have the resources to branch out down the road. Right now, we have to pick one thing.

Here's the rub: for each of these categories, we need to find a way to attach strings, tying payment to a specific product or service or charitable cause. The one-off crowdfunding platforms (Kickstarter, etc.) are generally purposive in the nature of the case. Patreon, a recurring platform like ourselves, ties payments to "paid posts" (afaict this is true even with their "monthly" payment option). What could we tie Gratipay payments to in a way that generalized across all of the ways users are currently using Gratipay? If we can't find an elegant answer to that question, then we need to pick one to focus our energies on. 0, 1, ∞.

Motivation 2b: Finding Ourselves

Relatedly, who are we? What are we trying to accomplish in the world? We're trying to enable an economy of gratitude, generosity, and love. We're not trying to be the cheapest way to send money. We're not trying to stir outrage. We are trying to create open jobs.

Here's my goal (IRC): I want to hit our homepage in five or ten years and find 1,024 projects (teams, companies, whatever) each with a weekly payroll of at least $1,024. I want thousands of people making a living by working on open work through Gratipay. How do we do that?

[chadwhitacre]

2pm Monday w/ Aaron.

[chadwhitacre]

9am Wednesday w/ Pam.

[mattbk]

Here's the rub: for each of these categories, we need to find a way to attach strings, tying payment to a specific product or service or charitable cause [...] What could we tie Gratipay payments to in a way that generalized across all of the ways users are currently using Gratipay? If we can't find an elegant answer to that question, then we need to pick one to focus our energies on.

Can you elaborate? Is this a payment processor requirement ("we need to find a way to attach strings")? Even one example would help spark some discussion.