Non profits

The importance of self sustaining high tech non profits (or Wikipedia is not going away anytime soon)

Florence Devouard, chairwoman of the Wikimedia Foundation recently said:

“Wikipedia has the financial resources to run its servers for about three to four months. If we do not find additional funding, it is not impossible that Wikipedia might disappear.”

I was taken aback by this statement, since I knew that Wikipedia just completed a $1M fundraiser, which I thought should take care of Wikipedia for a while. But when you're operating 350 servers to keep the service humming, the bills pile up -- no doubt.

Realistically speaking, Wikipedia is not going anywhere anytime soon. When FreeDB said that they were selling the domain and that FreeDB would go away, I was a strong naysayer on the demise of FreeDB. And sure enough a German company picked up the domain and kept operating the service. If a service has value and the people running the service are not idiots then the service will survive -- just as FreeDB survived. (And I would argue about the relative value of FreeDB :-) )

Now, Wikipedia clearly has value and is not run by idiots, ergo it will survive. What Mrs. Devouard stated was a simple fact of reality: Wikipedia has X dollars in the bank and the burn rate is Y dollars a month. Given their X and Y she came up with 3-4 months -- its simple math, really. I think she could've done a better job managing the public's perception of the viability of Wikipedia, but that's aside the point.

The really important point is that high tech non profits must work to become self sustaining. I don't think its wise for people to run high tech non profits like classic non profits that require begging for money at every step and turn. High tech companies have significant burn rates and these types of burn rates are hard to beg for. I hate begging and I can see how the Wikipedian's don't care for it either -- I don't blame them.

So, what's in store for Wikipedia? I would say some significant changes -- hopefully for the better. Personally, I think someone will step up to the plate to help the project in the short term -- some sugar daddy like Google. But for the long term Wikipedia will need to make some significant changes in order to reduce its expenses and increase its income in order to strive for sustainability over the next couple of years. The Mozilla Foundation and its multi million dollar earnings for 2006 are an excellent example of how to make a non profit self sustaining.

Wikipedia needs to share the load of hosting the data with many participants. Not one sponsor, but a few dozen sponsors will be needed to host Wikipedia servers on their own turf and own dime. Corporations and major universities around the globe should adopt a few servers of Wikipedia's here and there and operate them for Wikipedia. Wikipedia should make sure that changes to its content propagate out to its global network of servers in a smooth and timely fashion. Wikipedia should be the guardian and the architect of this global network, but it should not attempt to shoulder the burden of operating the entire site.

After working to reduce its burn rate, it should focus on increasing its income -- that's easier said than done of course. Needless to say, Wikipedia is sitting on a ton of content that is freely available to the public. I suspect that Wikipedia can come up with some way to play gatekeeper with its content and find commercial uses that can bring in license revenue while still keeping the encyclopedia open to the public.

For MusicBrainz the answer is timely and convenient access to updates of the data. Commercial customers don't want to reload the public snapshots onto servers twice a week -- its stupid. This was the motivation for create the live data-feed, which is free for non-commercial end users, but commercial customers must license the data. Over time the goal is to increase the number of licenses sold to cover the costs of operating the non profit. Donations should be the icing on the cake, not the meat-and-potatoes that keep the service running.

At least that is the goal for MusicBrainz -- clearly we are not there yet, but we're trying. Wikipedia must work out a similar plan to become self sufficient over the next couple of years or we're going to see significant changes on how and by whom the service will be operated in the future. I would hate to see Wikimedia Foundation lose control over this important project.

But, in the end, Wikipedia is not going away. It may just operate differently in the future.

UPDATE: According to this "what we need the money for" page Wikipedia plans to expand its budget significantly this year and the 3-4 months figure seems to be based on a future budget, not the current budget. At the current rate ($75,517/month) the $1M they recently raised would hold them for about a year, but would not allow for much growth (if any).

Posted by Mayhem at February 11, 2007 02:26 PM