Thinking org-onomically

I’m cheerfully stealing the title from the current advertising campaign from TIAA-CREF, which I’m finding interesting in the context of this post — how can a corporation for the public benefit (my own non-legal term) make money?

As a bit of background — the premise of the creation of MailCo is that Mozilla will provide $3 million in seed funding, to build the initial organization and fund it for an initial period. One of my mandates, however, is to work towards self-reliance. Currently, there is no set deadline by which we must be “cash-flow neutral”. The Foundation board has made it clear through Mitchell’s comments both public and private that it’s possible that the foundation would provide more funding in the future, if MailCo is seen to make progress on a variety of fronts. It’s also clear that the preference is for MailCo to find other sources of funding to at the least complement Mozilla’s contribution.

I think that encouraging me to figure out other sources of income is critical to ensuring that MailCo does what it’s supposed to do, which is to help people communicate over the internet. If, after years of work, we haven’t found anyone who cares enough to allow for some workable funding mechanism, then something’s not right. There is so much money in the software and communications arena right now, and we have the potential to reach so many people, that, based on no analysis but a pure gut check, I believe there’s got to be a funding model out there. In fact I’m sure there are a few, and that the biggest challenge will be picking the right ones. It won’t be easy. But it could be fun.

One unfortunate bit about business deals is that there is often value in keeping the details private, and very little value in talking about them in public. So I don’t think I’ll be blogging extensively about potential deals, negotiations in progress, and the like. Luckily, there’s nothing yet to worry about “leaking”, as I’m just ramping up and have only had the most exploratory of conversations so far.

In trying to come up with funding models, it’s sometimes useful to come at the problem from a variety of perspectives: market segmentation, understanding the industry players, identifying possible customer types, fitting into a competitive landscape, building a strategic “plays”, identifying “customer pain”, trendspotting, forecasting industry shifts, etc. Each one can lead to possibilities. it’s also clear that different people, because of their different backgrounds, tend to come up with different ideas as well.

If you’re used to selling “enterprise software” (a category name that I don’t particularly like), then the “obvious” thing for MailCo to do is to tackle the Outlook/Exchange market. I don’t know the exact bookings from Exchange licenses, but it’s a billion-dollar business (if anyone knows the exact number, let me know). It’s important to realize that Microsoft has an incredibly strong hold on that market, as many who have tried to tackle it have found. At the same time, it wouldn’t take a large percentage of that annual business to make a big difference for MailCo’s budget. If we had a scalable “enterprise support” offering, it wouldn’t take that many customers to allow us to break even! Please don’t read too much into this paragraph — I’ll have more to write about Outlook and Exchange in the future, I’m sure. At this point, I’m just using it to point out the incredible amounts of money being spent on email systems today, even though many email clients (and servers) are free.

Alternatively, if you’re used to selling to teenagers, you might think about making something pink and furry with a USB stick and some built-in, branded communication software built-in. With a bit of luck and design talent, those would sell well, and the pink would become unfashionable after three months, making it easy to sell the better, orange version. Or something.

Alernatively, if you’re used to selling “eyeballs”, or “users”, or “subscribers”, then the details of how the people associated with those eyeballs, etc., interact with other people over the internet is a potentially valuable asset. People seem on the whole willing to trade some exposure to advertising for free software and services. At this point, I don’t think the fit between something like Thunderbird and standard web advertising is a very good one, but a) no one said the income had to come from Thunderbird, b) there are lots of very interesting variations on “advertising”, and some companies will see value in advertising-like things which most of us wouldn’t even recognize as advertising-related.

Alternatively, if you’re a central organization for a possibly niche or clearly segmented part of the market, you might want to pay for to ensure that versions of software exist that are particularly well suited to your community/market/members/customers. Mainstream proprietary vendors routinely ignore “small” markets because they’re not “big” enough. But small for them might be plenty big enough for us.

Alternatively, … Well, you get the idea. At this point, I’m happy to talk to anyone who has ideas as to how we could make money someday. I’m happy to talk to businesses about possible relationships. But I’m going to be concentrating, for the first little while at least, on building the organization, building the community, improving the product, enabling innovation beyond the product, and improving our ability to reach users. If we have great products used by more and more millions of people, then, with some care and feeding, the economics will sort themselves out.

8 Comments

  1. I’m a Thunderbird fan for years.
    Since Mitchell Baker “Email Call to Action”, I pay close attention to the future of Thunderbird. I really hope that you’ll set-up a strong organization able to bring high added value to individual/private communication on internet.

    While reading your blog, I feel uncomfortable with advertising.
    I don’t want to have any advertising in Thunderbird.
    By advertising, I mean brand name, company logo or text automatically added to my mail.
    If advertising is to provide a quick set-up option for mail provider during installation, that’s fine by me as long as it remains an option. User must remain free to accept this option or not. By default user should be free to set-up is own provider.
    In my mind that the same business model as Firefox search bar with Google or Google calendar in Lightning.

    Thunderbird must remain independent.
    If Thunderbird depends on a single business deal, for sure it won’t serve public benefit but a single company profit. I think that Mozilla Foundation must ensure that Thunderbird will remain financially independent by providing more funding in the near future. At least until MailCo reach a well balance structure.

    Another question I want to raise is about “enterprise support”.
    I fear to have a free Thunderbird version and an enterprise version with additional function like Outlook Epxress / Outlook.

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  2. I exchange administrator for 5 years already and many other MS products. Just recently I’ve spend time to find out how I can replace exchange srv and client software w/o losing any functionality. Now I know it’s possible, there almost in all areas you can do with TB expect few cons.
    TB+Lighting+MangeSieve at client
    IMAP+iCal+OpenLDAP at server.

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  3. I’m encouraged by what I read.
    To add to your no-doubt ever growing pile, I would suggest you open disucssions with Mozilla Foundation on the issue of branding.

    Basically, “MailCo” isn’t much good as a name. Thunderbird would be nice. But to cut that long discussion, there is another issue, and that is the existing Mozilla Corporation. If Mozilla is a brand, then MoCo has it, and you don’t. So every time you go into some discussion where branding is important, you’ll be asking the partner to contribute to someone else’s brand. Worse, they’ll be happy to do it because it is stronger, but what they won’t be happy to do is to contribute to your little company.

    Possibly, the brand is migrating towards an umbrella / product arrangement, a bit like Ford or Virgin. So, Mozilla is the umbrella and it is at the MoFo level. Then, each of the divisions push some product called Mozilla XXX, enjoying the licensing of the umbrella brand from MoFo.

    Slight issue here is that MoCo should change its name… nice little challenge there šŸ™‚

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  4. An interesting way to make inroads into the exchange market, may be to first try and get the corporate “road warriors”.

    Evolution, Windows Mobile, and others already use the Exchange web mail interface to pull email. I know the common response will be IMAP, but many network admins do not open IMAP through the firewall. I know the admins that work for me are not comfortable with it.

    However if you told my admins that they could send the road warriors out, and the warriors would not be using Outlook they would smile. They are very nervous about the attack vectors through Outlook which would be minimized if they were using Thunderbird as a client.

    We also are considering moving our sales folks to a Linux platform. They do nothing that requires Windows. Most of their tools are web based already. Our corporate mandate requires us to be on Exchange. We can’t move the server side, but we will may move those clients.

    Either way if you do not wish to add the web mail communication pipe to Thunderbird, MailCo should become the source of “how to” information to get Thunderbird working the best way possible with Exchange. Add in a commercial support contract and you may get some funding.

    I don’t think you are going to find one source of funding. I think MailCo’s best bet would be to initially get a little money coming from a variety of sources.

    (This long of a comment really belongs on a blog.) šŸ™‚

    JT

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