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Segmenting Today's Open Source Community

Open source is ideally the ultimate in 'grass roots' marketing where people learn about the project by word-of-mouth

Program: Funambol Community Bag-a-Bug Program
Target: Open source developers
Benefit: Quality assurance and software contribution
Value: Cost savings

This program aims at recognizing and rewarding community members for finding and fixing bugs in the source code. They earn one point for finding a bug and three points for fixing one. Funambol maintains an online scoreboard on its Web site where everyone can see the leading contributors. At the end of every quarter, the leading contributors earn rewards such as a Sony PlayStation or iPod. During a recent three-month span, when Funambol introduced a new beta version of its software, the community found approximately 100 bugs and was able to fix about half of them. Funambol estimated that this saved it $200,000 by not having to devote more internal QA and engineering resources to the task. Most of the bugs were found and fixed by open source developers as opposed to other community sub-groups. The implication for the business model was that it allowed Funambol to optimize development resources, as well as enhance the satisfaction of open source developers, which is important to the company's success.

Program: Funambol Community Hero Program
Target: Open source developers
Benefit: Community satisfaction
Value: Cost savings

This program encourages community members to help each other by answering their technical questions on mailing lists and get recognized and rewarded like the Bag-a-Bug program. For every question a community member answered, they earned a point, but only when the question poser indicated whether the response answered his question. This program was not as successful as Bag-a-Bug because many people refused to provide feedback on the quality of responses, so the feedback loop was broken. Funambol is getting ready to try a different approach, which is to rank people based on the volume of responses they make, combined with a casual qualitative assessment of their work, so that people can earn ratings such as Expert, Intermediate, and Junior Member, leading to increased community status and recognition.

Program: Code Sniper
Target: Open source developers
Benefit: Software contribution
Value: Cost savings

Based on the results of a community survey, Funambol determined that the community wanted more software components than the company's internal engineering team had the bandwidth to deliver. The output was a list of projects that Funambol knew the community wanted and that it wasn't going to be able to get to in the short-term. Funambol publicized this list and offered bounties ranging from $500 to $3,000 for people to work on the projects. Within the first three months, 12 people signed up to work on 10 projects (in two cases, two people decided to work on a project together). The program was successful since it resulted in increasing the rate at which community projects were developed by about 50%. All of the code that was developed was open source, so it benefited both the community and the company. It also resulted in additional people becoming more technically familiar with Funambol software, another benefit. There are some people who don't believe that community members should be paid money for their efforts as it goes against the grain of open source, but Funambol didn't experience this feedback from its community members, possibly because it's already a commercial open source project.

Program: Phone Sniper
Target: Professional end users
Benefit: Device compatibility
Value: Cost savings

This program was designed to encourage the participation of other groups in the Funambol community, not just open source developers. It paid people $25 to test their mobile phone against a Funambol server to see if it was compatible with its push e-mail and PIM synchronization. Even though Funambol software is based on the SyncML industry standard, the standard isn't implemented consistently by every device maker, which requires testing and, in some cases, adjustments. The combination of mobile devices, mobile operators, and geographic locations is in the millions so testing all of these with paid personnel is cost-prohibitive. By involving members of the community in assisting corporate efforts, Funambol can provide the most comprehensive device compatibility in the industry. Within three months of launching the program, over 200 people signed up to test over 300 phones, which Funambol estimated saved it a significant amount of money. Furthermore, it injected a viral element into its community - get paid for using Funambol software - that encouraged other people to learn about the company and project. In the next phase of this program, Funambol is going to automate the phone sniper testing process further to allow more non-technical people to participate. All in all, this gives Funambol greater device compatibility and geographic coverage than proprietary software companies, i.e., it exploits the open source competitive advantage.

Program: Funambol Mobile Email Survey
Target: End users (consumers)
Benefit: Market information
Value: Cost savings

Funambol was able to ask its community to help in other ways, such as understanding the broader market for its software. For example, Funambol recently conducted a survey of its community to gain insight into their needs for consumer mobile e-mail. The data was collected through an online questionnaire. Although this isn't a random sample that reflects the overall population, it still provides extremely useful information about the characteristics and behavior patterns of mobile e-mail users. This enables Funambol to adjust its business model, e.g., by optimizing pricing and product priorities.

Lessons Learned
1)  Know your community: Ask and answer the fundamental marketing questions: how many segments comprise your community? Are they individuals or enterprises? Why do they participate in the community (what reasons motivate them - business purpose or volunteering/hobby)? Are they active - do they contribute and if yes, how and how much?
2)  Choose the key segments: Which are the most relevant segments for your business model?
3)  Build the marketing actions to address the target segments, don't waste resources on non-strategic groups.
4)  Be ready to invest in the community: There are some people who don't believe that community members should be rewarded with money, since it goes against the spirit of open source, but Funambol didn't experience this.
5)  Continuously interact and learn about your community. This is the primary way to understand its needs and how they can be leveraged for mutual benefit.

In summary, the more you know about your community, the more you can determine your optimal business model as well as the marketing programs that need to be implemented to achieve it.

References
•  Baker, M.J., (2000), Marketing Strategy and Management, 3rd Edition, Reading: MacMillan.
•  Carr, N. (2007), Customer value and the network effect, March 08, 2007, Rough Type blog www.roughtype.com/archives/2007/03/the_value_of_ne.php.
•  Christensen, C.M. (1997), The Innovator's Dilemma. When New Technologies Cause Great Firms to Fail, Boston MA: Harvard Business School Press.
•  Cherkoff, J. (2005), What is Open Source Marketing?. Manifesto, http://changethis.com/14.OpenSourceMktg
•  Doyle, P. (2002), Marketing Management and Strategy, 3rd Edition, New Jersey: Prentice Hall.
•  Kotler, P. (1999), Marketing Management: Analysis, Planning, Implementation, and Control, 9th Edition, New Jersey: Prentice Hall.
•  Kotler, P. (2002), Marketing management, 11th Edition, New Jersey: Prentice Hall.
•  Lambin, J.J. (1997), Strategic Marketing Management, London: McGraw-Hill.
•  Levinson, J.C. (1984), Guerrilla Marketing: Secrets for Making Big Profits from Your Small Business, Boston: Houghton Mifflin Company, 1984. ISBN 0-395-35350-5
•  Moore, G.A. (2002), Crossing the Chasm, New York: HarperCollins Publishers.
•  Moczar, L. (2005), The Open Source Monopoly, galatea.com.
•  Onetti, A., and Capobianco, F. (2005), Open Source and Business Model Innovation. The Funambol Case (pp. 224-227), in: Scotto M., and Succi G. (eds.), Proceedings of the 1st International Conference on Opens Source Systems, ECIG, Genova, 2005 (ISBN 88-7544-048-4), pp. 224-227.
•  Onetti, A., and Verma, S. (2007), Selecting Open Source Licenses and its Impact on Business Models, Paper submitted to JITTA (Journal of Information Technology Theory & Application).
•  Porter, M. (1998), Competitive Advantage - Creating and Sustaining Superior Performance, New York NY: The Free Press.
•  Rosenberg, D. (2005), The voodoo of marketing an open source project. July 17, 2005, www.itmanagersjournal.com/feature/7545.
•  Rushkoff D. (1994), Media Virus!, New York: Ballantine Books.
•  Skrob, J.-R. (2005), Open Source and Viral Marketing. The viral marketing concept as a model for open source software to reach the critical mass for global brand awareness based on the example of TYPO3, Wien: University of Applied Science Kufstein.

More Stories By Hal Steger

Hal Steger is vice president of marketing at Funambol, Inc., the mobile open source company. He has over 20 years of enterprise software marketing experience, including several years working with open source projects.

More Stories By Alberto Onetti

Alberto Onetti is a professor at Insubria State University (Varese, Italy) where he is head of a research center and teaches business innovation management. He has written numerous articles and books and act as consultant for companies and banking groups.

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