How to found a Free Software company?
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I have nearly finished my Master's degree in computer science, and now I am looking for a job in that area. I've managed to escape from nonfree software in the last 2 years and I also had the chance to write a free replacement for one popular nonfree program as part of my Master's thesis. I was also looking for a small "embedded Linux" company which is near to my home, but I don't know if that fits me. But I think I can take the risk and start a free software company which does support for free software such as migrations from a nonfree software to free software and educational activities.
http://fsfe.org/freesoftware/enterprise/freesoftwarecompany.en.html
I think you should find people who really care about their and others
freedom, start your own company. It's a little hard to find a local job
where is you won't have to compromise your freedom.
I work for a company that was once only a free software company, and I
joined them because their was once freedom around the environment, work
and thoughts, freedom exists there but only written somewhere.
They were initiating some project which had only "Linux" written on it
and my advice was to make it "GNU/Linux", it was not neglected but I was
just said no right then and there.
I even tried to make them use Trisquel, but they didn't get the comfort
of the non-free softwares included in other distros.
The philosophy of the GNU project is what I heard only on the first day
and rest of the days GNU's not here!
I am a member!
I've been thinking about this too. Could more grass root efforts like this be the key?
Most major propriety companies have a strong hold on small business' solutions, e.g., just about every small office has the MS suite. But perhaps providing continual support, e.g., transition and then conditioning, could make a difference.
These small businesses could then redirect prior software expenses to your income and, perhaps, the community or other employees.
Imagine a service that promotes Free Software and offers comparable support to the behemoths. We need a lot of these sort of regional gurus, and I think the biggest advantage is that they could easily meet clients face-to-face, over coffee...as opposed to a FAQ or convoluted contact links.
Are you in Germany? Two of my friends, who are Free software enthusiasts, are doing their higher education in Germany (Karlsruhe and Aachen). They have the same dilemmas for working and may be eager to help you set your company up.
I also find it very difficult to find organizations/companies
which use only free software and which work somehow with free
software here in Santa Catarina, Brazil. And I'm also eager to
work in such organizations, I'm also eager on opening one, but I
cannot do so right now.
I also think that one of the keys is to approach the regular
computer users through the creation of a local support business.
… … So many things still have to evolve here in Brazil, I wonder
if I'll be alive to see free software getting really popular
here…
Best regards, ADFENO.
Have a nice day.
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I also want to have such company but I need more study first, being from Brazil too I share the fears of ADFENO. Here in Belem we have jambutec that (theoretically) are dedicated to use free software, but they endorse ubuntu and are certified by them, which makes me worried about their ethos, they also simple ignored an email by asking about enternishp without even a simple reply.I think it is very difficult to find a company that is 100% free in any part of the world not only in Brazil.
My idea is that decentralization is the way to go, it is to hard to find supporter only locally and it is a major let down for people outside of great centers, I see most jobs offered to work with free software are to work in loco, this way we simple waste many great talents eager to work with free software, because they live in less favored places, like here in Brazil.
If you want to start a non-profit in the US, you incorporate as a 501(c)(3) like the Free Software Foundation (https://www.fsf.org/about/financial) or as 501(c)(6) depending on your needs.
Technically, the Mozilla Foundation is also a 501(c)(3) (https://www.mozilla.org/en-US/about/governance/organizations/) but they use it entirely to fund the Mozilla Corporation.
It will be like a normal company and although it is non-profit, you may need at least 3 employees on a salary that is minimum wage or higher.
Yes I am in Germany, but not in a big city. In Germany there is something similar to 501(c)(3) where you have to pay less taxes. But I don't think it has to be a non-profit. Free software does not exclude profits, you can make a profit by selling free software. I know that Richard Stallman did his emacs tape distribution before he founded the Free Software Foundation. It was about 150 USD per tape. As I have hardware development expierences, I could try to develop and sell freedom respecting hardware. I could ask the Free Software Foundation to run a crowdfunding campaing for me.
The appeal of non-profits is that they are tax deductible. Sure, a company (LLC or Corporation) can accept donations, but if you rely solely on those donations, a non-profit is your best route.
I am a member!
I'm going to speak as to how it applies in the United States.
There are scenarios where it is beneficial to be a non-profit, but other scenarios where it probably isn't and likely where it is beneficial it may not be for tax reasons. Such an example where it might be beneficial is an organization that was seeking funds from sources which required it (some funding sources are charities or governments that give money away for certain causes, etc).
I'll give you some examples. There are different kinds of entities as far as taxes go and they each get taxed differently. These entities sometimes tax just the individual's income (Sole proprietor, LLC, partnerships, etc). That means that the entity itself doesn't pay any taxes, but its owners pay it on there own income taxes. Other entities like a sub chapter s corporation pay taxes on the profits at the end of year, and the shareholders pay a tax when they go to sell the stock. However because businesses are out to grow anyway they are probably re-investing that profit and thus not paying taxes on it regardless of the form of the entity. However the employees (including owners) who then get a paycheck are going to have to pay income taxes like any other employee no matter what the formation is (doesn't matter if it is a non-profit, sole proprietorship, corporation, etc). I believe the reason people end up with a corporation is that the taxes on selling shares is less than the taxes on income and so if your salary is low you'll end up paying less in income taxes and then when you go to sell the shares at a profit you end up getting taxed less.
Now if you look at a non-profit they might pay nothing in taxes, but the employees will still have to pay taxes. So there really isn't a benefit for tax purposes. And for people who don't know this sales taxes are not paid on goods that are resold in same for or made into a product (sales taxes would be collected only at the end where the good was sold to a consumer, and in the case of the United States, it might be collected by the entity or down chain of the entity, or not at all, if the gods are shipped outside the state and there are no other states in which the entity has nexus, that is liability in the state due to having employees, sales reps, bank accounts, etc in the state) and any goods bought for the business get written off the taxable income of the entity. So ultimately the business can avoid paying taxes (and thats not even factoring in tax avoidance schemes bigger corporations use to get out of paying essentially anything at all).
Ultimately taxes are basically on the profits and there are different ways to structure things such that you, as a business owner, pay less tax, but ultimately what it comes down to is the money you pull out of the non-profit, for-profit, etc ends up getting taxed in some way that impacts the business owner, at some level.
An entity that expects to see a substantial portion of its revenue come from individual donations and other charitable organizations and has no good source of income otherwise is probably better off setting up as a non-profit. However if your selling some sort of physical good (like ThinkPenguin, Inc) then it's not going to make much sense. There are other avenues to raise funds and it would likely be difficult to impossible to get funding from a charitable organization or government.
There are also some other interesting entities like the Mozilla Foundation. It owns a for-profit entity. I forget why its setup like this, but essentially the corporation sells default configurations (ie Firefox is set to Google by default and Google pays for the for-profit Mozilla). That money can then be used by the non-profit to develop Firefox. Some have issues with this setup, but I tend to think its mostly an issue of taxes.
* I'm not an expert on this stuff, it's why ThinkPenguin, Inc has an accountant, etc, but this is my general understanding of it, as it relates to the United States.
I do web development for clients as a single member LLC where I get all the profits, but if it was a traditional corp or non-profit, I would need 3 employees (including myself) and pay them hourly or salary. I mentioned this in a previous post, but wanted to give my experiences.
If I went the non-profit route, I would have to get income ahead of time either through family, loans, kickstarter, or taking a chunk of money from my LLC.
I am a member!
Your in Europe? As far as I know you don't actually need three employees in the United States to setup a corporation. You can simply have one person full fill multiple hats on the board. I'm not sure about non-profit entities. I believe they are more difficult to setup and require approval. There are different non-profit statuses too and some may be more or less of an issue.
If people can find locals who would technically support them with
Trisquel and Free software that would be nice, and support would
generate income for these locals. All the help or professional solutions
provided by these locals should be documented and shared among the other
local gurus.
These local gurus should have a profile that would list what things they
are capable of doing with Trisquel, so that the people would know
whether they have found the right person to solve their non-free problem.
I am a member!
I don't know what work experience you have, particularly in a particular industry, etc, but it might be worthwhile getting some real-world experience in the industry in which you would like to focus first.
What I would do is figure out a niche you might want to conquer (ideally that isn't being filled already), not worry too much about the company's behavior (few companies are going to care at all, but you might be able to influence them, so might even be able to influence a badly behaving company, or at least build off the knowledge gained from learning how other companies operate, etc), save up (a crowdfunding campaign isn't always a good solution to every scenario although might work depending on what exactly your goals are and how its presented), and then take all that and build a company from it.
I say this because most businesses fail in very short order so having some sort of real-world experience and savings will reduce your risk. Most people don't realize just how expensive it is to run a business and while you can frequently find ways to cut corners you still have to have the funds to get you to point where your bringing in more money than your spending. Most small businesses take about 3 years to get off the ground and running (that is being comfortable with the money your making compared to working for a larger corporation). Anything to increase that chance of success is something every startup needs concern themselves with.
Before I founded ThinkPenguin I had no real idea what I was going to do after college or what niche needed filling within the GNU/Linux arena. What I knew was I wanted to see GNU/Linux and free software succeed on the desktop (like it had on the server). I started out with a Computer Science degree and did an internship between my 2nd and 3rd year at a company producing one of the leading desktop distributions of the day. While the company had its non-free software issues (including, not developing) it was mostly management's inexperience with the GNU/Linux and the free software world that created the biggest hurdles (and later what amounted to potentially criminal issues by certain major share holders, among a number of other really stupid business moves).
In any event I did that internship. I later turned down a few job offers. I then did something nobody would have expected. I took a low pay tech position with a major retail chain fixing (and selling to some degree) computers. I didn't just do that, but I utilized that with my GNU/Linux experience, with my internship experience, with a related PC repair startup, etc as a jumping off point for ThinkPenguin.
I saw how the competition operated, I saw how companies focused on desktop GNU/Linux were mucking things up, and from that I knew what to do to fix it and how to do it. I only held that repair job for several months, in part because I was already operating a competing repair business that let me focus more on how I thought things should be operated, and as such, I could see what worked and what didn't work with the masses. ThinkPenguin was operating during this time as well, but was much lower key. It's what you would call a “soft launch”.
Anyway- so yea- focus on picking up the skills you'll need to get the business going. Besides all that you'll need to do a lot of research, maybe take some business classes, accounting classes, etc. Some things you can more easily outsource if you need to, but some things you can just do yourself to keep costs down. Accountants, lawyers, bookeepers, trademarks, domains, employees, office space, warehouse space, etc etc all cost money and everybody wants a piece of the pie.
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