A Story about the Truly Inclusive Funding of Open Source WordPress Plugin “WordProof”
How to Fund Your Dreams and Work Towards a 100% Open Source Future?
What I learned the last 12 years, in running my WordPress agency and actively being part of the WordPress ecosystem since 2008, is that every effort I put into the community results in the community giving back. Although we always contributed a lot of our time and energy into the WordPress community, it took us more than ten years to finally significantly contribute to Open Source software itself.
That made me wonder, how inclusive is Open Source software development, to date? And what can blockchain do to attract all the talent in the world towards a 100% Open Source future?
In this article, I describe how we funded the first version of our WordPress plugin WordProof (bringing WordPress to the EOS.IO Blockchain) via the pragmatic Telos Worker Proposal System.
Spoiler alert: this truly inclusive way of funding via EOS.IO might be leading us towards a future running 100% on open source software, attracting all the world’s talent via smart incentive models.
When you’re a conscious open source software user, you probably agree with me, and many others, on the following quote:
“Open source is the most powerful idea of our generation. It may take time, but open will win over closed every time.” — Matt Mullenweg, Founder of WordPress
Are you a developer, willing to work more on open source software, but who doesn’t know how to organize and fund time to contribute significantly; then this article is for you!
I’ll cover our journey, from an idea, via funding to the realization, of our plugin WordProof, in four steps:
- How Open Source software is funded in the WordPress ecosystem
- Introducing WordProof: Bringing WordPress to the Blockchain
- Two Ways of Funding Open Source software in the Blockchain Era
- Case Study “WordProof”: Funding a WordPress Plugin via a Telos Worker Proposal
Here we go!
How Open Source software is funded in the WordPress ecosystem
WordPress is the number one solution for content management on the web. It powers 33.4% of all websites (as an indication: the number two, Joomla, just powers 3 to 4%). What I love about the WordPress community is how inclusivity is baked into her design and mission “Democratize Publishing”. Open Source software results in more inclusivity, as it makes the best technology available to everyone.
Let me highlight three types of companies in the WordPress ecosystem:
- The WordPress ecosystem: WordPress.org versus WordPress.com
- WordPress plugin: “WordPress SEO” by the Yoast Company
- Open Source software at our WordPress agency: The “WordPress GDPR” plugin
We’ll have a closer look at how exactly they do fund their open source contributions to the WordPress ecosystem.
The WordPress ecosystem itself: WordPress.org versus WordPress.com
On WordPress.org, you can download the world’s #1 CMS, WordPress, and thousands of actively maintained plugins, made and supported by businesses in the WordPress ecosystem. The CMS and plugins in the WordPress plugin repository are all downloadable for free and Open Source.
WordPress.com is one of the biggest users of the WordPress.org software. The company, founded by WordPress founder Matt Mullenweg, utilizes the WordPress.org software commercially by offering WordPress in a Software-as-a-Service model.
So, WordPress.org doesn’t have a direct monetization model but the WordPress ecosystem is huge. WordPress.com is utilizing the WordPress.org software, being a billion dollar company (named Automattic) ran by WordPress’ founder Matt Mullenweg. In this recent interview he stated the following interesting numbers about the ecosystem:
“For every $1 Automattic makes, the WordPress ecosystem (agencies, freelancers, web hosting companies) makes $20–21.” — Matt Mullenweg
WordPress.com has always been the biggest contributor to the WordPress.org software.
WordPress plugin: “WordPress SEO” by the Yoast Company
Publishing great Open Source software products requires a huge upfront investment. Let’s have a look at successful Open Source entrepreneur Joost de Valk, who created the leading WordPress plugin “WordPress SEO”, actively being used by 9,000,000 users.
He started his career as an SEO consultant, working from home on his plugin as a side project. When the project grew, he had a hard time supporting the hundreds of thousands of demanding plugin users. Then Joost adopted a freemium business model and so, he transformed the plugin into an amazingly successful business.
Of their 9,000,000 plugin users, 350,000 of them are paying customers now. From that revenue, the Yoast company pays her 100 employees and all here huge contributions to the WordPress ecosystem.
Nowadays, Yoast sponsors almost every large WordPress event worldwide, and 10 of his employees work full-time on WordPress (!), which makes his team the second largest contributor to the WordPress.org software. For him it’s a logical step:
“To grow my company, WordPress has to grow.” — Joost de Valk, founder of Yoast.
That’s is not only an amazing contribution but it also makes a lot of sense, right?
Let’s have a look at an Open Source project at my own WordPress agency …
Open Source software at our WordPress agency: The “WordPress GDPR” plugin
In 2006 I founded my web agency ‘Van Ons’, with co-founder Robert van Eekhout. Since 2008 we almost exclusively work with WordPress, and today, we work with a team of 25 WordPress specialists on the biggest WordPress sites and WooCommerce shops in the Netherlands and Europe, serving more than half a billion page views (!) on a yearly base.
Since May 2018 Europe enforces a new privacy protection law, the GDPR. As a result, all website owners in Europe were forced to make a lot of expensive changes to their websites, which, understandably, frustrated almost every website owner. As, of course, our customers did need to be compliant too, we started developing the technical solutions to the GDPR requirements.
Our team came with the idea to invest extra time in the plugin so we could Open Source it. In Q1 2018 we released the WP GDPR Compliance plugin, a free plugin to help entrepreneurs to make their website technically GDPR-proof. The hard work we put in was rewarded instantly. Tens of thousands of downloads in the first weeks, ending up with 700,000 downloads by 100,000 active users of the plugin and counting.
Until now we invested a number of hours worth a $60,000 in the plugin, hours we easily could have sold to paying customers, but we didn’t. Why? Because we are proud to give back to the ecosystem which provides us with the software we work with every day.
The fact that website owners didn’t want to pay to be GDPR-compliant, as it didn’t feel fair, made it the perfect project to open source for us, as it really solved a pain point! As we think the GDPR features should be available to everyone without paying a premium, we decided not to introduce a freemium business model.
Our “business model” here is indirect: because we built and maintain the WP GDPR plugin, our sales process became easier than before, as it makes our agency very credible. And our team of developers do love to work on open source plugins. It gives them even more purpose to everything we do, which therefore results in amazing vibes at our Amsterdam based office!
The three stories above give you insight in how the amazing WordPress ecosystem is funded. As a result, this #1 CMS is available to everyone, it’s a truly inclusive solution, ran by a truly inclusive community.
But, how about the development of the software itself? How inclusive is being able to significantly produce Open Source software?
Isn’t Open Source Software Development Inclusive, yet?
As you see, business models in open source are often indirect. My agency does her sales easier and attracts better developers because we contribute to open source. The Yoast company, with here successful freemium models, and WordPress.com, with her SaaS model, are incentivized to keep the WordPress software amazing, as it results in their growth too.
My agency should be a stable company to stay able to contribute significantly. And the same might be true for Yoast!
In a healthy ecosystem like WordPress and here community, there is always something you can do to help the community forward, but the fact is, it took us more than ten years to come to a point where we as a company were stable and profitable enough to contribute with a plugin like WP GDPR Compliance, as we finally had the resources to do so.
That in hindsight made me wonder …
- Why is it that I needed to be “financially free” to start contributing to open source software significantly? What can we do to make it accessible to every talent in the world, not only the ‘Free ones’?
- How can I invest more time in making Open Source software without putting the stability of my company at risk?
Until now, open source is merely dependent on people volunteering to contribute their time and energy, or there should be strong indirect business models.
What if we could flip this, by somehow making the production of open source software inclusive too? How can blockchain technology successfully help in funding Open Source software development, and thereby making it truly inclusive? What I mean by that is, not only accessible to those who are financially free?
Let me share a story about how we funded our plugin WordPoof …
Introducing WordProof: Bringing WordPress to the Blockchain
Since 2013 I’ve invested and researched blockchain technology, and since the start of 2019, I’ve been working full-time on the cross-border of WordPress and blockchain. We aim to put WordPress on the blockchain, starting with timestamping content and simple authentication.
I could program a rough and dirty prototype myself, but making it a fool-proof and user-friendly plugin takes a lot more effort, as we learned the last 18 months in developing and supporting WP GDPR Compliance.
In strategizing WordProof, I decided that I would love to put the Van Ons team on it, but that would, at least, cost me another $30,000, which will eat into the development and support we do on the GDPR plugin or, if we invest ourselves that could put the stability of my company at risk.
As an Entrepreneur, I tend to design a business model with direct or indirect revenue streams around it.
But our belief here is: “Timestamping content in the blockchain, and thereby proving your integrity, should be a human right, it should be 100% inclusive, and thus accessible to everyone.”
What if a product should be free by design?
Blockchain might bring a solution here. Let’s have a further look at funding open source software in the blockchain era:
“Blockchain has the potential to ring-fence open source technology with a funding model.” — Brendan Blumer, CEO Block.One, creator of the open source EOS.IO blockchain software.
Two Ways of Funding Open Source software in the Blockchain Era
The best-known funding model in blockchain is the crowdfunding model via an Initial Coin Offering. After a short description of the ICO-model, I’ll share a less known, and more experimental way of Open Source funding: the Worker Proposal System, also known as a Budget System in the Dash blockchain community.
Funding models in blockchain:
- Token Economics with ICO’s
- Worker Proposal Systems
(* Yes, there are more models available to fund open source, but I’ll limit this article to those two as they help me clearly illustrating my point.)
Blockchain Funding Model 1: Token Economics with ICO’s
One way to fund a blockchain project is to create your own token, starting your company by selling those tokens in a crowd-sale in a so-called ICO, an Initial Coin Offering. You could see it as a combination of crowdfunding versus an Initial Public Offering.
In a certain amount of time, investors are able to buy your project-specific tokens. Those tokens represent a utility or share in the company you’re building.
How an ICO works:
- A company (to be) writes a whitepaper, describing their plans and the terms of their ICO (how many tokens will you create, how many will be offered in the crowd-sale, how many will you keep for yourself, what will be the utility of the token, what is on your roadmap, etc.). So, there is a total capped amount of project-specific tokens, of which a part will be sold in the ICO.
- Often, the minimum and maximal amount of capital needed is capped and there is a deadline for the ICO, too.
- Investors transfer their investments to the ICO-address. If the right amount of capital is raised before the deadline of the project is reached, then the project-specific tokens will be distributed to the participants of the crowd-sale.
The ICO in practice:
- A team wants to build Uber on the blockchain and needs $7 million for development of the open source software and marketing.
- They create 10,000,000 UBER-tokens, of which they’ll try to sell 7,000,000 UBER in an ICO.
- During a fixed period of 30 days, investors of the project can transfer funds to the companies address (which you can see as a bank digital account). If the threshold of 7 million dollars is reached at the moment of the deadline, the project is successfully funded and the 7,000,000 UBER-tokens will be distributed to the investors.
The company can now start producing the software conform the roadmap as promised. As the software becomes produced and marketed, the sold tokens should get utility, which makes them valuable, resulting in a return on investment for the investors/speculators.
Downsides of the ICO model:
- A lot of the ICO’s — until now — did not live up their promises and the expectations of their investors, which makes some project-specific tokens worthless.
- On the company side, organizing an ICO needs a lot of marketing and communication efforts.
- ICOs can have strict legal requirements that are expensive to comply with and detract from the time developers spend developing.
So, funding your Open Source project with an ICO could work, but it is not accessible to average Joe, because it takes a lot of effort and it is a risky business for both the company and the investors. This doesn’t mean ICO’s or token economics couldn’t work. I absolutely know they can and will. But the big effort and trust needed to make it work makes that I don’t find it a very inclusive way to produce inclusive open source software.
What I want to focus on is another way of funding, a beautiful and experimental concept which has the potential to make Open Source development truly inclusive …
Let’s have a look at Worker Proposal Systems!
Open Source Funding Model 2: Worker Proposal Systems
A whole other way of funding projects on the blockchain is a Worker Proposal System as introduced by Dan Larimer while building the EOS.IO blockchain software, also being called a Budget System on the Dash blockchain. Those blockchains are working with an inflation rate to fund vital elements of the network, like rewarding miners/supernodes, the infrastructure on which the network runs.
Another vital element could be a Worker Proposal System, a continuously growing savings account on which developers can pitch projects to be funded, to improve the value of the network. Token holders in the blockchain network can then vote in favor or against the submitted projects, and the projects being valued as useful are being funded by the Worker Proposal System.
The Telos Blockchain, using the EOS.IO software, positions itself as the innovation district of the EOS.IO ecosystem. Worker proposals are the way that Telos users can guide and pay for the development, promotion and growth of the Telos network. Telos is the first EOS.IO blockchain with a functional Worker Proposal System (WPS) and one of the only projects in the blockchain world where all users can vote to determine how network funds are used. Telos is also the only funding process in blockchain that is 100% smart-contract controlled, meaning there’s no bureaucracy between the voters’ decisions and the receipt of funding.
On the Telos Blockchain, there is a 1.5% inflation for the Worker Proposal Fund. Having approximately 350,000,000 TLOS, this thus results in a fund of 5,250,000 TLOS tokens on a yearly base.
Any developer can submit a plan, called a Worker Proposal, existing of:
- A project description
- The monthly fee needed (how many Telos tokens are needed per month)
- How many cycles (months) of funding are needed
All participants on that blockchain can vote YES, NO or ABSTAIN on your proposal, where the weight of their vote equals their amount of tokens (called their Stake). This all works automatically and completely transparent via smart contracts.
So, if I think a product should be there, I can write a worker proposal and motivate the community to vote on it.
Our project WordProof was the first new development project in the EOS.IO ecosystem, being funded by the Worker Proposal System.
Use Case “WordProof”: Funding a WordPress Plugin via a Telos Worker Proposal
WordProof was the 6th Worker Proposal ever submitted to the Telos blockchain, and the first proposal ever that successfully funded new Open Source software upfront. Later on, we might look back at this as a historic moment for WordPress and EOS.IO!
“It was important to me that any kind of project could apply. You never know what may come along. We put this in the users’ hands as a participatory direct democracy. I think we will get great results. I’m also excited that we have the first such program in the world with 100% smart contract control.” — Douglas Horn, Chief Architect at Telos
Here’s the timeline of the WordProof Worker Proposal. From writing and submitting it, to promoting, developing and launching it before the world’s biggest and most inclusive WordPress event: WordCamp Europe 2019!
- March 8th: I submitted the Worker Proposal named “WordProof — Open Source WordPress Telos Plugin. Roadmap in Proposal.”
- Via the SQRL-wallet, I uploaded a document describing the project. I paid 9,000 Telos (3% of the total requested amount of 300,000 Telos tokens, approximately $600 by then) as a commitment (anti-Sybil system).
- I started promoting my proposal in the Telos Telegram channel and started to work on the mock-ups of WordProof. Find the initial proposal here!
- March 10th: The Telos community noticed our Worker Proposal!
- March 11th: I discovered that we made a mistake. Requesting 4 x 300,000 tokens instead of 4 x 75,000. As 1,200,000 tokens would have way too much impact on the Worker Proposal Fund, I discussed with the Telos community how to handle the situation.
- March 13th: I made and shared a presentation called “WordProof Opportunity & Urgency. Product & Worker Proposal.” in addition to the WPS, to propose a procedure for the mistake I made in the requested amount of tokens, and further explaining the opportunity and the solution.
- March 19th: I published a YouTube video with WordProof Mock-ups, again promoting it in several Telegram Channels: “Onboarding 75 million WordPress users into the EOSIO ecosystem? WordProof Introduction (Telos WPS)”
- March 21th: I reached out to Brandon Parker, who runs the EOS Podcast. Asking him if WordProof, in this early stage, could spark your interest. He said yes!
- March 25th: The EOS Podcast interview recorded.
- March 26th: Block producer “EOS New York” mentioned WordProof in her Weekly update #21.
- March 26th: Yasss! Brandon Parker published “The EOS Podcast #72 — WordProof”.
- March 27th: “You are currently on track to pass. The threshold changes with voting, but if there are no big changes, you should be good.” — Douglas Horn
- April 7th, D-day for our Worker Proposal, and we succeed. We claimed our 309,000 Telos (300K + 3% 9K invested upfront as a commitment/submission fee), a historic moment.
- April 8th: I shared a video with a WordProof Proof of Concept we developed at my WordPress Agency. This to thank the community for their trust and to reward them with us being confident to live up to our promise and deliver on time!
As you see, I tried to publish something at least once a week, to stay on top of the voter’s minds during the whole voting process.
My total investment to secure this initial funding for WordProof:
- $600 upfront as a commitment (if you don’t have this, write a smaller WPS first to work out your initial plan, or reach out to the community, as someone believing in you and your plan might do this initial investment for you).
- In total, I spent around 50 hours to prepare and market the Worker Proposal. Most of this work was work I had to do anyway (technical design, creating UX, creating marketing materials, prototyping).
The coming weeks I will update this post as we are developing WordProof while living towards the world’s biggest WordPress event in June, WordCamp Europe 2019, where I’ll be a speaker amongst others like WordPress’ founder Matt Mullenweg himself.
For the last several years, my WordPress agency, 25 people strong, invested more than 10% of its profit into creating valuable open source software, on which we are, of course, very proud.
My personal mission is to bring the WordPress open source/community experience to the blockchain and to bring great experiments from the blockchain ecosystems to WordPress, as I think both ecosystems could tremendously benefit from each other.
In my opinion, a Worker Proposal System, like the one implemented in Telos and used as in our WordProof use case, could help to leverage all the talent in the developer world, directing all productivity towards working open source!
From now on, although still experimental, there ARE ways to fund your open source plugins, without purely being dependent on volunteers (who are financially free) or speculators (via ICO’s).
I hope that I inspired you about how it’s possible to work on amazing open source software without eating into your profit or waiting until you’re financially free. Please, feel free to use my documents and process as described above as a reference for your future Worker Proposal submissions!
Thanks for reading.
Let’s work towards a 100% Open Source Future, together!
Sebastiaan van der Lans
Join the WordProof Telegram https://t.me/WordProof