Tuesday, May 1, 2012

M42: Let's Talk Business!

Caravaggio, The Fortune Teller, 1596
SandWyrm here. As we get closer to my releasing a PDF of what I've done on the game so far (about 20 pages to date), I think it's time to share my thoughts on where M42 should go as a business venture. Who will own the IP, and other such things.

Right now everything is copyrighted under my name; since our efforts have to belong to some legal entity. However this raises issues of trust for those who wish to contribute time or money to the project. Eventually folks are going to ask what SandWyrm is intending to do with all of these contributions. You know, what are my intentions?

First and foremost, I want M42 to be a community-owned ruleset who's development and maintenance is independent from the market pressures of creating and selling models, books, or other things. You know, the things that distract GW and, to a lesser extent, both Privateer Press and Battlefront. But if I'm going to take the lead on this project and do a huge chunk of the work, then I would also like to get paid for my efforts at some point in the future. Because I have to make a living like everyone else. I'm also interested in making models, books, art, etc. at some point. :)

I've been trying to figure out how to balance these 2 goals and engender trust for those who might want to contribute; while coming up with an end-goal for us as a company. Finally, I think I've found a solution: We'll follow the Mozilla corporate model!

Mozilla, the makers of the Firefox web browser, have an interesting corporate structure. At the top you have a non-profit corporation called the Mozilla Foundation. The Foundation owns and administers their IP, controls some key infrastructure, and other such things. It has a manifesto and a mission. You can read about these on it's site.

But the Foundation, by it's non-profit nature, is limited in what it's allowed to do commercially in terms of licensing and whatnot. Being a non-profit also complicates how you hire and compensate development staff. So they have a for-profit subsidiary, The Mozilla Corporation, that handles the development and distribution of products based on the IP of the parent Foundation. It's the corporation that has the multi-million dollar deal with Google to make their search the default in Firefox.

This gives Mozilla the advantages of a non-profit in setting corporate goals based on community ideals, but also allows them to engage in commercial ventures that a non-profit can't be a direct part of. Trust is preserved because the board and officers of the Corporation cannot overlap (by law) with the Board or Officers of the Foundation. So the community ideals of the Foundation control the day-to-day activities of the Corporation. I like that!

So here's my plan:

First, I need to create a corporate entity to which I can transfer all of our IP. This will give us legal protection, establish solid jurisdiction for which country and state's IP laws apply to the project, etc. We're an international effort, so we need to make sure this is locked down before I release anything labeled as 'rules'. Because that's when we cross over from being mere commentators on a blog to being authors of a distributed product that others can take issue with.

Creating a Corporation is very cheap and easy to do here in Indiana, USA. It's a $30 fee and some forms to fill out. The hard part is figuring out what type of Corporation to be at this stage. Sole Proprietorship is easy, but a Foundation will require a Board of Directors, bylaws, etc. So it's some extra work to do it right.

After our regular for-profit corporation is set up, then we can register our trademarks, set up bank accounts, etc. I can then release the rules I'm writing knowing that we're protected.

Stage 2 will be more difficult. Applying for Non-Profit status in the US requires anywhere from $350 to $700 in direct fees and a 70+ page application to the US Internal Revenue Service. Depending on how much help we need, the expenses for this could run up into the $1-2K range very easily. Especially if we're denied and have to re-apply.

I figure that we'll have to pay for this with a round of fundraising from members and other interested folks who are willing to give. I certainly can't pay for it all on my own! But if we can't raise this much money, we have no business being in business, really. So think of it as our first real test.

Once we're set up as a non-profit, we can start receiving tax-deductible donations. Which will give folks an extra incentive to support our cause.

At this stage, I (and others) can also start to do paid work for the Foundation, as long as I have no say in the discussions about what I'm to be paid. That would have to be decided on by the Board of Directors. This arrangement is a very common one for Non-Profits of all sizes. I can be on the Board, but I cannot vote or join the discussion on how much I'm paid.

Stage 3 is where it really gets interesting. By this point we'll have a set of rules that will require further testing and polish. If we can attract enough donors, we can continue this work as part of the Foundation with a paid staff of writers, artists, and testers. Releasing our rules for free as part of our defined mission. We can even take advantage of tools like KickStart to help raise funds for defined projects.

But let's assume that we complete the rules and have some Mozilla-like success in stealing market share from our competitors. What then?

Well that's when we can decide to form a for-profit, tax-paying subsidiary to pursue things like license agreements with miniature manufacturers, book publishers, etc. This would allow us to develop paid products like nice printed books, iPad Apps, Miniatures, and other things that don't really apply to the stated mission of the Foundation. Which is just concerned about developing and balancing the rules.

At that point, I and any other officers would have to choose which company to work for. If I were to decide to head up commercial product development at the Corporation, then I would have to step down (by law) from the Board of the Foundation and any Foundation offices I might hold. That way the Fox is not guarding the chicken coop, and we don't end up with a set of managers that can rape the hard work of the company for their own gain. Because the Foundation will provide the oversight needed to keep everyone honest.

That's the plan. What do you all think?

No comments:

Post a Comment

Popular Posts