
Coderwall open-sources codebase and business model - awwstn
http://hackernoons.com/all-our-coderwall-are-belong-to-you
======
Oculus
I'm liking this new trend of completely open source companies (e.g. Code
Combat). I feel as though this it will either work immensely well or be a
complete failure. It'll be interesting to see where it goes.

On a side note, are the legalities of sharing ownership in the revenues of
Coderwall through _App Coins_ clean? Does it exempt Coderwall from SEC
regulations?

~~~
bitsweet
You bring up great questions, like cfield below. To be clear, Assembly App
Coins are not securities. For the moment they only determine an individual's
royalty payout when there is revenue. They can't be purchased by outside
investors or transferred to other individuals that are not in the product's
"partnership".

You can only earn Assembly App Coins when you participate in building the
product, and effectively joining the product's partnership. This would be
similar to how a law firm partnership is structured.

~~~
oscargrouch
I think not being able to transfer or to resell is the right thing to do..

The "money generate more money" circle is not possible.. instead it would be
always a virtuous cycle of "work generate value that can be convertible into
money"

------
webhat
I like that they open sourced the code, although I think the license is a
little restrictive.

I try to run all my companies as FOSS companies, as I believe that it's
practically impossible to create a competitor just by forking the code. Much
of the work in any code base comes not from the programmer, but from the
community that interacts with the system as a whole. Even if a part of the
community forks there will be different needs and requirements in the
different communities which will mean they diverge as they address different
niches.

~~~
quadrangle
The non-commercial clause indeed violates the Open Source Definition. They are
NOT Open Source.

------
fred_durst
This is a little bit spooky when reading through
[https://assemblymade.com/help/basics](https://assemblymade.com/help/basics)

From the FAQ: _Assembly owns the intellectual property on behalf of our
members, because that’s the best way to protect your interests. However,
Assembly also recognizes that our members should have the right to use their
ideas in other contexts. As a result, we give our members a license back to
their content to give them the flexibility to use their intellectual property
in non-commercial ways._

~~~
opendais
There really isn't another way to do it for Assembly that I can see. They are
the responsible entity that pays for infrastructure, assume the legal
liability, provides the platform, provides the payout process.

They need control of the IP as part of that process and serve as an arbiter in
the event of disputes.

~~~
fred_durst
Is it necessary to only license that IP back in non-commercial ways?

~~~
opendais
Technically? No.

Practically? Yes.

Otherwise, nothing would stop a contributor from cloning the repo on GitHub
and running a competitor without paying any of the other developers.

~~~
fred_durst
Wouldn't that also stop the team from moving away from Assembly? It seems to
me that the projects are permanently owned and bound to Assembly in
perpetuity. That appears to be some serious lock in.

~~~
opendais
Of course it is. That is how all such business agreements work.

Replace Assembly with any Corporation or LLC in existence, same principle and
behavior.

I'm not sure why you find this surprising or spooky.

~~~
fred_durst
The standard practice of any Corporation or LLC that provides a service to
distribute revenue based on contributions is to own and control the projects
entire IP?

What happens if Assembly goes into bankruptcy and has to liquidate its IP?
What if Assembly decides to shutdown a project because it has issue with the
content/business? Can the project move onto another platform or can Assembly
effectively shut it out of existence? What if Assembly decides to
sell/transfer the IP to another entity for a fee?

I should add here that Trademarks are IP just as much as source code.

For example in
[https://assemblymade.com/terms](https://assemblymade.com/terms) the lawyers
decided this needed all caps(in legal terms "conspicuous"). _COMPANY_ is
defined earlier with this snippet: _Assembly, a Delaware corporation, and its
corporate affiliates (collectively referred to herein as “Assembly”, "us",
"we" or the "Company")._ Section (V) is of particular interest.

THE SELECTION, DEVELOPMENT, AND SALE OF ANY APP IDEA IS SUBJECT TO THE
COMPANY’S SOLE AND ABSOLUTE DISCRETION AND THE COMPANY RESERVES THE RIGHT, FOR
ANY OR NO REASON, TO (I) REJECT ANY SUBMITTED APP IDEA, (II) REFUSE TO POST
ANY SUBMITTED APP IDEA TO THE SITE, (III) TERMINATE THE DEVELOPMENT OR ANY
PHASE RELATED TO AN APP IDEA, (IV) TERMINATE THE SALE OF ANY COMMERCIALIZED
PRODUCT RELATED TO ANY APP IDEA, OR (V) SELL OR LICENSE AN APP IDEA, AND/OR
ANY INTELLECTUAL PROPERTY RELATED THERETO, TO ANY THIRD PARTY.

And some more all caps(aka "conspicuous"):

YOU AGREE THAT COMPANY WILL NOT BE LIABLE TO YOU OR ANY OTHER PARTY FOR ANY
TERMINATION OF YOUR ACCESS TO THE SITE, CONTENT OR MATERIALS.

~~~
opendais
I don't work/use Assembly so...I can't really answer the rest but:

> The standard practice of any Corporation or LLC that provides a service to
> distribute revenue based on contributions is to own and control the projects
> entire IP?

That isn't what I said. What I said was if you want the Corporation/LLC to
handle legal liability, accounting, etc. the norm is for it to control the IP.
I'm not a lawyer, I don't know if its possible to do it differently.

Based on that & your profile saying:

> I don't take HN all that seriously so I wouldn't read into my activity too
> much.

I'm just going to assume you are a troll at this point.

------
opendais
This is a very neat idea and I hope it works out for you. :)

That said, helpful.io is priced high relative to its competition and I worry
that this business model really will only work for advertising/etc supported
products rather than SaaS.

~~~
chrislloyd
(Disclosure: Helpful Core Team) Pricing is always difficult and has been a
long ongoing discussion for us:
[https://assemblymade.com/helpful/search?q=pricing](https://assemblymade.com/helpful/search?q=pricing).
It's always up for debate and if you have a strong opinion you should jump in
and start a discussion :) I'd love to hear more about why you think it
wouldn't be good for SaaS.

~~~
opendais
I'm not a developer working on Helpful [I also don't plan to start since I'm
focused on other things] so I don't really feel comfortable debating it and
trying to lobby for change.

I mainly look at Assembly as a nice idea I hope works out well for everyone
involved.

 __Since you asked: __

You are basically charging $200 /month per agent [assuming 160 hrs/month and 1
conversation completed per hour of agent-time].

Random Competitor:
[http://freshdesk.com/pricing](http://freshdesk.com/pricing) [$70/agent/month
for all the features]

Realistically, someone would probably only pay for the $25/agent/month plan.

It seems you've gone the "Well, metered pricing is good for developers" route
without considering the competition is priced cheaper and has a real marketing
budget. While competing on price is generally what you don't want to do,
charging almost 300% to 800% more for a similar product isn't something I see
as financially viable as a business model.

Here is to hoping I'm wrong. :)

~~~
chrislloyd
That's really interesting, you make a great point. I hope you don't mind, but
I started a discussion for this:
[https://assemblymade.com/helpful/688](https://assemblymade.com/helpful/688).
Really appreciate the feedback!

------
kureikain
This is so great. Those kind of application are real web app. By reading the
code, non RAILS dev like me can understand how thing really done at the
company other than reading some book or tutorial Thanks.

------
arikrak
> Instead of employment contracts, people should be able to work when they
> want, how they want, and where they want... We call it crowd-founding.

Investors get to diversify their investments but founders usually are bound to
the success of one company. If people could really do "crowd-founding", they
could diversify into many different projects.

Q: Successful startup require one group focused just on the startup.

A: Perhaps a startup could have a core team and a larger group of crowd-
founders (who could also be crowd-funders) to help with other aspects.

Q: How would equity be allocated fairly?

A: This would need to be dealt with, but as mentioned in the post, it could be
"determined by the community" in some way. Also, if the founders are funders,
they will be willing help out like advisors do, even without additional
equity.

~~~
awwstn
Good points. Each product on Assembly has a Core Team, which takes the lead on
vision, quality, etc.

The Assembly Getting Started page ([https://assemblymade.com/getting-
started](https://assemblymade.com/getting-started)) covers a lot of this. Here
are some relevant bits from that page:

 __Collaboration __

 _Assembly apps are built by everyone, and like successful open source
products, each app also has a Core Team of contributors. The Core Team
influences the vision of the app and the standards for quality, and determines
which contributions are accepted. It consists of the most active and respected
contributors on the app. The Core Team may comprise the original creator,
Assembly staff members, and members of the community who help make the product
a reality (that’s you!)._

 _Some people work on Assembly projects for just few hours a month. Some put
in 40 hours a week. It’s up to you to work on what you want, when you want,
where you want. The best part is that if you step away, the project keeps
moving forward._

 __Ownership __

 _The ownership of an Assembly product is distributed through App Coins. App
Coins can be earned primarily by contributing to a product (design, code,
copy, etc.). You can also receive “tips” in the form of App Coins when you
provide insight, advice – or simply make someone laugh._

 _When an app launches and starts earning money, the profits are split each
month among everyone who helped build it – based on the percentage of
ownership each person has._

 _While the emphasis is on collaborating to create apps with sustainable
earnings over the long term, people also occasionally ask about acquisitions.
The answer is, if a company offers to acquire an Assembly product and the
product’s core team decides to accept the offer, that income would be
distributed (after expenses are paid) based on App Coin ownership, just like
any other revenue._

------
cfield
Interesting idea. I didn't dig into how App Coins work and how allocation of
revenue works. But my instinct is that it could very easily implicate state
and federal securities laws.

~~~
bitsweet
Thanks cfield! I appreciate your perspective on this and we've spent a lot of
time getting the legal structure right.

The App Coins are a way of determining royalty payouts for now. The only way
to earn them is by participating in building the product, and effectively
joining the product's partnership. This would be similar to how a law firm
partnership is structured and is why these are not securities.

Assembly App Coins can't be purchased by outside investors and Assembly App
Coins can't be transferred to other individuals not in the "partnership".

~~~
cfield
With securities laws, substance often trumps form and much ink has been
spilled on what constitutes a security. Even a partnership interest can be a
security (often turning, in part, on how much real control a partner has).

I have no doubt it is possible to design a system that navigates the
treacherous landscape of the securities laws, and perhaps you have done that.
I just note that securities laws are one of the design constraints you'll need
to account for. It sounds like you've made an effort to do that. I would
certainly encourage you to get some expert help in this area when it’s the
right time to make that investment.

Good luck!

------
_raul
This is a very interesting idea and the App Coins rewarding system seems to
map well with design/development and other one-time activities.

I wonder if it will be a good fit for those continuous tasks required once a
product is ready for the market (e.g: marketing, customer support,
operations...), or if those roles will involve regular hiring/salaries.

------
mikehostetler
I'm interested to see how this plays out. My gut says it will fail because the
risk/reward for contribution mix it incorrect, but I'm glad to see someone
trying.

For a more realistic (and legal) approach to crowd-founded companies, take a
look at SlicingPie: [http://slicingpie.com/](http://slicingpie.com/)

------
towhans
The devil is in the details.

1/ How much Coins per commit will somebody get? It's totally subjective and
decided ex post. How do you compare a patch with 300 lines of code to a bugfix
that touches just one character? Or to a comment that sheds light on an
important issue?

2/ How do business owners submit profits? Even if they are totally honest
people - we live in a complex world where it might be very difficult to
separate profits of one App from another.

All in all it seems to me that this is a great way to exploit young developers
that want to learn but don't know their value yet. The Coins system tries very
hard to give impression that it is fair. It's not.

The fact that I don't own my contributions is a total show stopper for me.

I like the overall idea - just not this particular iteration of it.

------
quadrangle
This is not Open Source by the OSI definition, nor Free Software by the FSF
definition. They have a problematic non-commercial license clause. So this is
published source with some permissions that remains proprietary.

