This presentation is to help hackers think about business models suitable for open data projects.

1. Open Data Business
Models for Hackers
Luke Closs - OSCON 2011
@lukec

2. Lets unpack that title!
• Open Data
• World Readable (& re-usable!)
• Open formats
• Open licences
• Trendy!

3. Lets unpack that title!
• Business Models
• Designs
• Making projects financially sustainable
• (or thrive-able!)

4. Lets unpack that title!
• Hackers
• Awesome citizens who make stuff!
• This talk is not for MBAs.

5. This talk …
• … is to help hackers
• … think about business models
• … suitable for open data projects

6. But first, a story!

7. VanTrash
Saving Marriages one garbage
day at a time.

8. The story of VanTrash

9. June 11, 2009
Open Web Vancouver

10. I Met David Eaves

11. I Met David Eaves
• twitter.com/daeaves

12. I Met David Eaves
• twitter.com/daeaves
• Open data advocate

13. I Met David Eaves
• twitter.com/daeaves
• Open data advocate

14. Talking about:
O3

15. June 29, 2009
Blog Post

16. “How Open Data even
makes Garbage
collection sexier, easier
and cheaper”

18. A side-note:
• Vancouver has confusing garbage schedules
• Everyone’s day moves forward every holiday
• Canada has lots of holidays
• Every other week is green bins

19. Time Passes

20. Community collaboration
event
(AKA a code sprint)
(AKA a hackathon)
(AKA drink beer and make cool things)

21. Super Happy
Hacker House
(#2)

23. Kevin Jones

24. Kevin Jones
• @kevinj

25. Kevin Jones
• @kevinj
• co-worker, friend

26. Kevin Jones
• @kevinj
• co-worker, friend
• not in a boy band

27. Kevin Jones
• @kevinj
• co-worker, friend
• not in a boy band

28. Kevin Jones
• @kevinj
• co-worker, friend
• not in a boy band

29. “Hey Kevin, this can’t be that
hard ...”

30. ... hack hack hack ...

31. Fast forward a few months
Make it work in Internet Explorer (ugh)
...
Add logging, backups, metrics, feedback, error reporting, email system,
administration features
...
347 commits later
142 files changed, 19624 insertions(+), 644 deletions(-)

34. VanTrash API
• Leave the data better than you found it
• HTTP (REST) interface
• Provide garbage API for other projects

35. VanTrash SMS
(Text Messages)
• Wanted to add SMS notifications
• BUT
• We do not wish to support incumbent mobility
companies in any way.
• Decision: Focus on Twitter instead

36. Technologies
• Perl - all server-side development is in Perl
• CPAN++ (Geo, ICal, Polygons, Scraping)
• Javascript - frontend is all in the browser
• Uses REST/HTTP to talk to the server
• Android - mobile platform of choice

37. Licensing
• Server-side code is completely open
• Perl Artistic License or GPLv2
• Javascript and Images are Copyright
• We could prevent garbageday.ca from taking our work
w/o permission
• OK initial balance, would change long term

38. Motivations
• Be a good citizen, leadership by example
• Show Gov’t, Business what nice, simple APIs look like
• Help our neighbors
• Learn, take a project start-to-finish
• Have fun

39. Epilogue
• Vantrash ran for ~20 months with no problems.
Ideal!
• Thousands of users, word of mouth marketing
only.
• Receive LOTS of praise from friends, family &
strangers
• It’s genuinely useful!

40. But …

41. How could we bring this to
moar ppl?

42. Ideas to make it better
• MOAR cities
• MOAR notifications (Text / Voice call)
• MOAR value to municipalities

43. Paradox

44. Cities will only embrace
our tool if they pay us to
do so.

45. If we’re providing value to
citizens …

46. Maybe we can start a
(micro) business?

48. BM Gen
• Patterns & framework to understand & design
business models
• “A startup is a company in search of a business
model.”

49. The Canvas
• A visual framework for exploring aspects of a
business model

51. Cost Value

52. Walkthru

53. Text
• Citizens? - Parents? - Drinkers?
• Governments?
• Businesses?

54. • Make life easier?
• Do things cheaper?
• Make better decisions?

55. • Social Media (Tweeter, FB, …)
• Municipal / Gov’t conferences
• Business conferences

56. • Self service - web / wiki / forum / email

57. • App store sales?
• Subscriptions for services?
• Municipal contracts?

58. • Hackers
• Servers
• Coffee?

59. • Feature development / maintenance
• Support
• Sales / Marketing / Communications

60. • ISP / Hosting?
• Open Data advocates?
• Municipalities?

61. • Hosting?
• Financial infrastructure (accepting moneys)
• Your time?

63. The Book
• Business Model Generation
• (It’s visually beautiful)
• Techniques for brainstorming, analyzing, testing
business models.
• Buy it!
• businessmodelgeneration.com

64. What business models
would work for VanTrash?

65. My BM Gen Process
• Brainstorm every possible detail/idea
• Stare at it
• Split into distinct business models
• Compare / Contrast
• Try, blend, iterate!

66. VanTrash Models
• We came up with these options:
• Sustained by citizens
• Sustained by municipalities
• Infrastructure as a Service
• Public Open Source Service

67. Sustained by Citizens
• Provide basic service for free, charge for
enhanced services (SMS / Voice)
• Citizen not willing to pay too much
• “Freemium”

68. Characteristics
• Requires marketing, but no sales team
• Requires many paying citizens
• Hard to market to target customers
• Non-techie citizens
• Easy to execute, few barriers

69. Sustained by Municipalities
• Provide services to citizens for free, city pays for
infrastructure costs
• Not incompatible with “Freemium”
• Value is more towards reducing costs
• Municipal ads & admin features

70. Characteristics
• Sell to Municipal decision makers
• Looong (long) sales process
• Administration features needed
• City handles marketing to citizens
• Too cheap for cities to buy

71. Infrastructure as a Service
(IaaS)
• Offer tools to run VanTrash as a service to
others
• Let hackers in other cities easily create their
own
• Common infrastructure saves time

72. Characteristics
• Very little marketing / sales needed
• Hackers localize the service for their area,
market it to their citizens
• Money from any party that wants to set it up
• Too niche?

73. Public Open Source Service
(POSS)
• Idea: poss.gliderlab.com @progrium
• No profit incentive
• Citizens collectively pitch in to cover costs as
needed
• Donations => Account => Hosting fees
• $$ / run rate = months of service

74. Characteristics
• Content to be small
• No $$ motive to expand, enhance
• Good model for established infrastructure that
can be run cheaply & is hard to accept money
for

75. Introducing Recollect.net

79. Recollect’s B-Model
• Free for web/email/twitter/ical
• Citizens pay for SMS & Voice reminders
• Municipalities pay for ad space, administration,
extra features
• Custom features for $$$

80. Initially …
• Fuck the gov’t, they’re too slow!
• Citizens can sustain us!

81. Weeks go by …
… maybe not

82. Later …
• We gotta get municipalities onside
• Make it “no-brainer cheap”
• They advertise it to their citizens
• Some citizens pay for extra services

83. Finding Balance
• Knowing the models we can evaluate the
tradeoffs
• Listen to your customers
• Try things, don’t be in a rush
• Need to be lean to not be rushed

84. Other Open Data
Companies

85. SeeClickFix
• Bugzilla for Cities
• “Sustained by Municipalities”
• Charge cities for admin features, branding,
customization
• Around $100 / 100K citizens / month

86. Morningstar
• Started out scraping printed SEC reports
• Figured out how to use that public resource
better than anyone else
• Started rating Mutual funds for 401ks
• Now they are a huge company

87. How to do it.

88. How to do it.
• Hack cool things with open data

89. How to do it.
• Hack cool things with open data
• Let people use them, be patient

90. How to do it.
• Hack cool things with open data
• Let people use them, be patient
• See what has value

91. How to do it.
• Hack cool things with open data
• Let people use them, be patient
• See what has value
• … Value to citizens

92. How to do it.
• Hack cool things with open data
• Let people use them, be patient
• See what has value
• … Value to citizens
• … Value to governments

93. How to do it.
• Hack cool things with open data
• Let people use them, be patient
• See what has value
• … Value to citizens
• … Value to governments
• … Value to organizations

94. Business Sustainability
• Is there relevant data?
• Is there demand?
• Can you generate $$?

95. Lessons Learned

96. Lessons Learned
• Municipalities are slow

97. Lessons Learned
• Municipalities are slow
• Municipalities don’t want to be first

98. Lessons Learned
• Municipalities are slow
• Municipalities don’t want to be first
• It’s not cheap to accept money on the internets.

99. Lessons Learned
• Municipalities are slow
• Municipalities don’t want to be first
• It’s not cheap to accept money on the internets.
• When you don’t have VC, you can run on your
own (slow) schedule.

100. Breaking Dependencies
• Turned off vantrash.ca, redirects to Recollect
• Got email yesterday from City 311 staff! ZOMG!
• But we use your site!
• OK, we can help you! ($$)
• Unintentional catalyst!

101. … In Conclusion

102. … In Conclusion
• Brainstorm about how to charge for that value

103. … In Conclusion
• Brainstorm about how to charge for that value
• Given your skills, time, capabilities

104. … In Conclusion
• Brainstorm about how to charge for that value
• Given your skills, time, capabilities
• Narrow down to specific experiments

105. … In Conclusion
• Brainstorm about how to charge for that value
• Given your skills, time, capabilities
• Narrow down to specific experiments
• Try them out.

106. Thank You!
• Contact me - lets talk about open data ideas!
• Twitter - @lukec
• luke@recollect.net
• http://www.BusinessModelGeneration.com/