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Restocking the War Chest
As discussed in this week's ![[site community profile]](https://www.dreamwidth.org/img/comm_staff.png)
dw_news announcement, the last three months of lowered income has done a lot to deplete our "war chest" -- the amount of money we keep in reserve to cover our future operating expenses. We'd already been running in the red from month to month, and the past few months have seen some additional expenses over and above the usual.
So, we're looking to run a DW fundraiser, once the credit card payment system is up and running again, to 'repay' the reserves that we've had to tap into over these past few months. It costs us around $10,000 a month for operating costs + what we pay ourselves (and we really don't pay ourselves much -- thank God for spouses with day jobs and the willingness to let us follow our dreams), and we've had some pretty big one-time expenses since the beginning of the year, including the tax bill being due. (We had money set aside for it, but let me just say, ouch.) With credit card payments, we were taking in about $6,000 a month, and we obviously hope that we can get out of the red, month-to-month, sometime soon!
In order to repay what we've had to raid the piggy bank for since the beginning of the year, our target goal is to raise $50,000 in the month of April. In order to repay the piggy bank and be able to support the kind of expansion, marketing, and improvements we'd like to do for the rest of the year, our pie-in-the-sky fundraising goal is $100,000 -- it's a bit of a stretch, but since we know a lot of paid accounts are set to expire on the one-year anniversary of open beta (5/1), we think it's totally doable if we hustle.
We haven't decided exactly what form that fundraiser might take, though, so we thought we'd put it up for discussion. Each of the plans we've been able to think of so far have pros and cons, and we'd like to make sure we hear everyone's thoughts before we make a decision.
One possibility is to sell another batch of seed (permanent) accounts. We said that we weren't going to do it again, since permanent account revenue is good in the short term but not so good (for you or for us) in the long term, but many people have asked us if seed accounts will ever be available for sale again, since they missed the first sale or weren't yet Dreamwidth members, and we think there'd be enough interest to support another sale. (Like the last time, seed accounts would sell for $200, and we would only place a limited number, probably 200-300, on sale.) We're really hesitant about doing that, though, because we told you guys that we weren't going to do it again except in dire emergency, and this isn't dire emergency -- we don't want to go back on what we said.
Another possibility is to do a paid account special sale -- along the lines of the December holiday promotion, where buying 6 months of time for someone else would give you 2 months for your own account, but not necessarily exactly that. (Details of what exactly the sale would consist of could be totally up for discussion.) The advantage of that would be that we wouldn't have to do something we said we wouldn't do (offering seed accounts for sale again), and we'd be able to design the sale to be as attractive as possible, to give people a chance to support Dreamwidth at any financial commitment level and get a bargain in the process. (We know that $200 is a lot to ask from people!) The disadvantage is that whatever promotion we come up with might be hard to distinguish from the changes to the paid account/credit system, which might make adopting the credit system more confusing, plus it might be hard to find an incentive that would encourage people to buy paid time credits.
A third possibility is to run some sort of unofficial Dreamwidth fundraiser, where individual people would offer up goods/services/what-have-you in exchange for DW credits, once we have the credit system going. The advantage of this would be that it might get people used to using the credit system, while the disadvantage would be the amount of overhead it would require -- it would have to be something unofficial, since we don't have the resources necessary to handle disputes or conflicts, and it might wind up with things going really wrong when people can't or don't deliver on what they promised. Also, this is the kind of model that's usually used on Dreamwidth and LiveJournal for charity fundraising, and Dreamwidth isn't a charity -- it might be weird, and we don't want to devalue the important charity fundraising work that people do.
So, there are advantages and disadvantages to each option (and there's nothing saying we can't do a mix of any/all of the above, as well as things we might not have thought of yet). We want to throw the question open to the floor, though, and see if people have perspectives and ideas that we haven't thought of:
* Which of the options do you prefer?
* Do you have any other ideas that might help us reach our sales goals?
* What kind of sale would inspire you to buy DW credit?
(One thing we're not looking for, for this post at least, is feedback on what kind of features and benefits would make paid accounts more appealing to you. We know there are a lot of things we can do there -- we've got a list of them scheduled for the rest of the year -- but they take more senior-developer time and effort than we have to schedule right now. Later on in the year, we'll revisit the question of paid account features and how we can improve them!)
dw_news announcement, the last three months of lowered income has done a lot to deplete our "war chest" -- the amount of money we keep in reserve to cover our future operating expenses. We'd already been running in the red from month to month, and the past few months have seen some additional expenses over and above the usual. So, we're looking to run a DW fundraiser, once the credit card payment system is up and running again, to 'repay' the reserves that we've had to tap into over these past few months. It costs us around $10,000 a month for operating costs + what we pay ourselves (and we really don't pay ourselves much -- thank God for spouses with day jobs and the willingness to let us follow our dreams), and we've had some pretty big one-time expenses since the beginning of the year, including the tax bill being due. (We had money set aside for it, but let me just say, ouch.) With credit card payments, we were taking in about $6,000 a month, and we obviously hope that we can get out of the red, month-to-month, sometime soon!
In order to repay what we've had to raid the piggy bank for since the beginning of the year, our target goal is to raise $50,000 in the month of April. In order to repay the piggy bank and be able to support the kind of expansion, marketing, and improvements we'd like to do for the rest of the year, our pie-in-the-sky fundraising goal is $100,000 -- it's a bit of a stretch, but since we know a lot of paid accounts are set to expire on the one-year anniversary of open beta (5/1), we think it's totally doable if we hustle.
We haven't decided exactly what form that fundraiser might take, though, so we thought we'd put it up for discussion. Each of the plans we've been able to think of so far have pros and cons, and we'd like to make sure we hear everyone's thoughts before we make a decision.
One possibility is to sell another batch of seed (permanent) accounts. We said that we weren't going to do it again, since permanent account revenue is good in the short term but not so good (for you or for us) in the long term, but many people have asked us if seed accounts will ever be available for sale again, since they missed the first sale or weren't yet Dreamwidth members, and we think there'd be enough interest to support another sale. (Like the last time, seed accounts would sell for $200, and we would only place a limited number, probably 200-300, on sale.) We're really hesitant about doing that, though, because we told you guys that we weren't going to do it again except in dire emergency, and this isn't dire emergency -- we don't want to go back on what we said.
Another possibility is to do a paid account special sale -- along the lines of the December holiday promotion, where buying 6 months of time for someone else would give you 2 months for your own account, but not necessarily exactly that. (Details of what exactly the sale would consist of could be totally up for discussion.) The advantage of that would be that we wouldn't have to do something we said we wouldn't do (offering seed accounts for sale again), and we'd be able to design the sale to be as attractive as possible, to give people a chance to support Dreamwidth at any financial commitment level and get a bargain in the process. (We know that $200 is a lot to ask from people!) The disadvantage is that whatever promotion we come up with might be hard to distinguish from the changes to the paid account/credit system, which might make adopting the credit system more confusing, plus it might be hard to find an incentive that would encourage people to buy paid time credits.
A third possibility is to run some sort of unofficial Dreamwidth fundraiser, where individual people would offer up goods/services/what-have-you in exchange for DW credits, once we have the credit system going. The advantage of this would be that it might get people used to using the credit system, while the disadvantage would be the amount of overhead it would require -- it would have to be something unofficial, since we don't have the resources necessary to handle disputes or conflicts, and it might wind up with things going really wrong when people can't or don't deliver on what they promised. Also, this is the kind of model that's usually used on Dreamwidth and LiveJournal for charity fundraising, and Dreamwidth isn't a charity -- it might be weird, and we don't want to devalue the important charity fundraising work that people do.
So, there are advantages and disadvantages to each option (and there's nothing saying we can't do a mix of any/all of the above, as well as things we might not have thought of yet). We want to throw the question open to the floor, though, and see if people have perspectives and ideas that we haven't thought of:
* Which of the options do you prefer?
* Do you have any other ideas that might help us reach our sales goals?
* What kind of sale would inspire you to buy DW credit?
(One thing we're not looking for, for this post at least, is feedback on what kind of features and benefits would make paid accounts more appealing to you. We know there are a lot of things we can do there -- we've got a list of them scheduled for the rest of the year -- but they take more senior-developer time and effort than we have to schedule right now. Later on in the year, we'll revisit the question of paid account features and how we can improve them!)
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When you start, I'll be throwing money your way, however it is that I can. What I'd most like to do is help fund whatever you feel is most likely to help get you to the point where you can meet ongoing costs, or to directly support the things you're doing that make this place special. I would, for instance, be perfectly happy giving you a flat-out "support for having ethics" direct donation for making the hard and correct decision to change payment processors twice. Or sponsor your mentoring of new developers somehow.
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Direct donation is something a little iffy, accounting-wise, but we implemented the "random gifts" feature precisely so people who wanted to give us money, but who didn't need paid time for themselves, could have a route to pay us. Barring that, we had originally talked about separating the hosted service and the OSS work into two separate orgs, with the OSS work being a 501(c)(3), and given all the work that we've done in terms of FLOSS mentoring, and how well it's been turning out, that might be more worth looking into now. (Correspondingly more work, of course, but still...)
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I talked that up with a bunch of other people. I wish I knew more people who want blog hosting.
Anyway, if the random gifts feature is the way that works the best, I'm happy to use that (and did once and will do so again). The only reason why I shy away from that as the best way for people like me to donate is that to some (small) extent it's cannibalizing your revenue stream, and ideally I'd really like to find some financial way to help support you getting to self-sustaining revenue instead. I'm not sure that random gifts are really doing that; they seem like, if anything, they're hurting it a little (apart from the fact that you get the money of course).
For me, you splitting off the code stuff as a 501(c)(3) sort of directly works against my goal of helping you become a self-sustaining enterprise, since now you're paying more accounting fees and having to split your money into two chunks that can't move back and forth. Also, it's not clear whether the 501(c)(3) would be able to pay for any of your major expenses: server hosting and salaries, for instance. Although I suppose you could run salaries that way in part, particularly as a way to hire developers directly, and that may be what you're thinking of.
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We're really not all that far off from self-sustaining, honestly. We did our numbers calculating 'sustainable' at a 5% paid account rate taken over active users past a certain level of activity, and before all of this started going down, we'd hit nearly a 15% rate. We hadn't hit the required level of activity, but we were steadily getting there, and things were looking very good. I'm hopeful that when we're able to accept credit card payments again, we'll be able to make up lost ground very quickly.
The advantage to the "sponsor a free user" system (or at least, so our theory goes) is that people will be able to sample the paid user features and get a chance to decide whether or not they like them to continue paying for them once their sponsorship runs out! We don't yet have the stats calculations in place to determine if we're seeing a noticeable renewal rate or not, but I'm pretty sure it's happening at least a little. And to some extent, the people being sponsored already have chosen not to upgrade their accounts, so I'm not positive that it's cannibalizing the revenue stream so much as introducing people to what they can access if they pay. (We need to do better work at explaining what the paid account features are, so people can sample them all! But that's something I have on my to-do list for when I have a second to breathe.)
I like your idea elsethread about implementing a sponsorship for communities. In fact, I like it so much I've added a bug to extend the paid-account-fairy page to also have a button that will pull from a random active free communities dataset. That's a really good idea, and thank you for it. :)
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Okay, that explanation of sponsoring random accounts makes sense and makes me feel better about using that (and, really, I should have recalled that from earlier discussions). Thanks!
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Once you can take credit card payments again, it might be a very good plan to promote the "random gifts" feature explicitly on that basis -- that this is how people can support DW.
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At the moment, people have no way of knowing whether they've got an anonymous admirer or shy friend -- in one case I actually chose not to sponsor someone because I took a look at their DW and was worried that they'd be creeped out by an anonymous gift!
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"Your account has been randomly selected to receive someone's payment through our program that allows users to buy paid time for random free accounts."
(in this case, the sender was anonymous; actually it was me doing a test, but I had used the "anonymous sender" option)
The text might have changed since then, but I know it's still there because when I bought random paid time for somebody recently, they left me a comment to say thanks, and specifically referenced the random element, so it must still be mentioned.
Maybe it's not clear enough, though? Obviously it's a very bad thing if people choose not to use the feature out of fear of how it'll be taken, so I'm certain Mark and Rah would want it to be made clearer if people aren't using it because of that. I'll point them towards your comment and my reply.
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Ah - cool!
In that case, seconding
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