App.net 3rd-party revshare proposal
I have been thinking a lot about what makes great 3rd-party developer ecosystems work. At the end of the day, it really boils down to financial incentives, and the ability of an ecosystem to support 3rd-party devs making a living and maintaining a good lifestyle.
If the rules are setup correctly, great 3rd-party development platforms create a strong financial incentive for 3rd-party developers to make great software. Why? Healthy platforms allow 3rd-party developers to make lots of money. If you can setup the financial incentives in the right way, people are able to make a great living by building great software that is useful and makes people happy. That is the world I want to live in.
On the other hand, if the “rules” of a development platform are setup without intention or thoughtfulness, the ecosystem will fail.
I would like to publicly share an idea for App.net and its relationship with 3rd-party developers. What if we took the subscription revenue we got from members, and did a recurring, monthly revenue share with 3rd-party devs?
For the sake of argument, let’s assume a 50/50 split would make sense. In this hypothetical proposal, if in a given month an App.net member signs into a single 3rd-party client, that developer will get $2.08 from App.net. If a member uses 5 different 3rd-party apps that month, the revenue will be split between those 5 3rd-party developers on a pro-rata basis, probably based on how much the user actually used the client. Let me be clear: the definition of use is very complicated, and there will be insanely complicated corner cases to work out in terms of reporting, not least of which are developers attempting to game the rev-share system. Is there a fair way to define “use” that could fairly compensate the ecosystem? Perhaps someone out there has proposal about how this could be fair? I am fully aware that the devil is in the details here, and don’t want to appear to be flippant about a very complicated question.
I like the idea that every month the 3rd-party developers will get a report of what usage occurred in their application, along with a check. The advantage is you get to distribute your app for free in the app store, but still get assured you will get financial incentive for building the best software. And, if a user is already an App.net member, they can just sign into your app for free without any money changing hands… the dev still gets paid at the end of the month. I think this creates an incentive for developer to create amazingly high quality apps that people will want to use in the long run, and get away from some of the App Store “chart gaming” going on today.
Let me be transparent here: I am trying to turn the brain-dead way Twitter is treating its 3rd-party devs on its head. 3rd-party developers added all of the value to the platform in the early days, and instead of being shut down they should get paid. The reason the Twitter developer ecosystem has failed is that Twitter itself has a flawed business model. We can do better.
3rd party devs: what do you think? I think you would say “hey, great idea, but where are the users, this only works at scale”. My answer is that we need to cooperate to create this ecosystem. If we all act together, I think we can build an ecosystem that will support all of us, and lead to you making a whole lot more money building great software than you are today. I believe this is a vision worth fighting for.