The problem is as follows: You have a fixed cost investment to produce a software code base, then you have fixed ongoing maintenance costs, at a minimum one developer who knows the codebase. Preferably two for a commercial product. On top of that you have small distribution costs over time. E.g. servers that host the software downloads.
The marginal costs per user are very small or even zero for desktop applications. This means that software needs a funding structure with periodic payments, but at the same time the payments shouldn't grow with the number of users. There also needs to be a way for the initial investors who pay for the creation of new features or entire code bases to get their money back as the product becomes popular.
This in itself is not problematic, but it is not covered by traditional crowdfunding. The problem is that the funding goal needs to be met no matter what, and the contribution per user shrinks as more users contribute. You can't expect everyone to chip in 100%, 10% or even 1% of the funding cost, since that could be thousands of dollars even at the minimum. You need some sort of auctioning process where people can pledge a fixed quantity and if the user count is low enough, their pledge counts, otherwise it doesn't.
This has one problem though. What's problematic is the transition from the exclusive to non-exclusive mode.
There will be freeloaders who might pitch in five dollars, but they know five big corporations have chipped in and this covered the full development cost, leading to open sourcing the entire codebase. Everyone else is a freeloader. Including cheapskate corporations.
That’s a problem but it’s not the irreducible problem. Which is that the computing stack is constructed wrong (obvious and fixable) so you have these ridiculous requirements in the first place. The capital issue is a second order effect.
The marginal costs per user are very small or even zero for desktop applications. This means that software needs a funding structure with periodic payments, but at the same time the payments shouldn't grow with the number of users. There also needs to be a way for the initial investors who pay for the creation of new features or entire code bases to get their money back as the product becomes popular.
This in itself is not problematic, but it is not covered by traditional crowdfunding. The problem is that the funding goal needs to be met no matter what, and the contribution per user shrinks as more users contribute. You can't expect everyone to chip in 100%, 10% or even 1% of the funding cost, since that could be thousands of dollars even at the minimum. You need some sort of auctioning process where people can pledge a fixed quantity and if the user count is low enough, their pledge counts, otherwise it doesn't.
This has one problem though. What's problematic is the transition from the exclusive to non-exclusive mode.
There will be freeloaders who might pitch in five dollars, but they know five big corporations have chipped in and this covered the full development cost, leading to open sourcing the entire codebase. Everyone else is a freeloader. Including cheapskate corporations.