Monday, June 18, 2012

My next year's business expansion plans

I may cross-post this to Perspectives on LedgerSMB at some point but for now it is just here.

Before I start I would like to make it clear that I am not recommending that every business in open source publicly announce what areas they are going to get into ahead of time.  There are often areas where letting competition know what you are doing in advance is a bad idea.  Having carefully considered this, I do not believe this is one of them.   The reason is that at this point I have been doing a solid majority of the development work on LedgerSMB for the last six years.  I am at the center of the community, and nobody can take that away from me in the next year.  Chances are if someone simply tries to do what I am outlining here they will fail and I will pick up their customers.  However if you pick something else you have the opportunity to build your own community around your own solutions.  So hey, knock yourself out.  Try it.  I will even share advice/experience.  The further you go the more successful you will likely make me so I am all for it.

A second point in prelude is that this post also gets into areas where open source financing of development really doesn't work so well.  Identifying these areas is important for open source businesses because it allows us to find alternative structures for funding solutions.

The areas we are going into within the next year are no exceptions.  These areas require frequent updates for regulatory compliance reasons and so you run into trouble with a few people consistently paying for everyone else's continuing use of the software and services.  I don't believe that will work.  Therefore we are pushing these areas into subscriptions which include support and some other goodies.

The areas of support include:

  1. Electronic submission of taxes or revenues to relevant authorities.
  2. Payroll logic per jurisdiction's requirements
  3. Third-party certified versions for uses where certification is important (for example, credit card processing)
Again each of these areas requires a different model of spreading out the cost compared to standard major feature development (which has supported my business for years).

The second major problem, behind spreading the cost, is that the first two are big problems which vary considerably from one jurisdiction to another.  I don't think it is sufficient to hire people to keep up with foreign tax rules, so the approach I am taking is trying to partner with people in each jurisdiction to ensure the payroll and submission logic gets updated when it needs to.  They do the research and keep in touch with developers on my side.  We keep it up to date.  revenues are split.


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