Pay Me for Before, or Pay Me for Later

Digging ditchesThis is a story about making a living writing software in the new millenium. The first thread in the story was the recent FLOSS Weekly interview where I whined about not knowing how to make a living from open source. I have some constraints:

  • I travel with my family, which limits my time away from home
  • I live in rural southern Oregon, which means no local business and little local talent

The second thread comes from my study of economics. Actually, “study” is too strong a word. I listen to EconTalk while I’m doing chores. At first I was fairly lost, but now I can predict what people are going to say a fair percentage of the time. One of the first things I learned is that one social purpose of markets is to allocate scarce resources in spite of uncertainty.

The third thread came when I heard about the recent kerfuffle regarding the reuse of J.D. Salinger’s Catcher in the Rye character Holden Caulfield. The part that caught my eye was that Catcher was Salinger’s only novel, published in 1951. It’s sold 65 million copies since then. So basically Salinger has spent 50+ years cashing royalty checks and contributing back very little (at least on the scale of another widely-studied novel). That makes no sense from a resource allocation perspective. Catcher was a significant societal contribution, but society has had little payback from its subsequent investment (must be tens of millions of dollars) in Mr. Salinger.

I don’t wish to pick on Mr. Salinger. What he’s doing makes sense given the rules of the game as they stand. For many, payment in arrears (for work already done) works just fine. Patrick O’Brien or Arturo Perez-Reverte put out long lines of worthwhile books. In their case payment in arrears results in reasonably efficient resource allocation. Maybe Mr. Salinger’s case is just a hiccup, but it got me thinking.

The final thread of this story came when I found a download site listing 20,000 downloads of my latest book, Implementation Patterns. I like lots of people reading my books. I work with my publishers to increase unit sales, even at the expense of royalties. However, as I looked at those download numbers I thought, “Don’t they realize that if they don’t pay for my last book I can’t afford to write my next book?’ It seems to me that society is not well served by the breakdown of the in arrears payment model. Yes, they get everything I’ve already done for free, but I (and millions of other producers like me) don’t have a source of capital to make the next thing.

I need to get paid for my work (college and retirement loom). Currently I’m not getting paid for what I’ve already done and I’m not getting paid for what I’m about to do. Getting paid for what I’ve already done doesn’t make sense (from the Catcher in the Rye example). So, here’s my proposed deal. Y’all can have everything I’ve already done for free-as-in-beer if I get a steady income for the work I’m about to do. I’m even willing to forgo the chance of winning the lottery in return for security.

I’m not sure who I’d sign such a contract with or how I’d negotiate terms. The whole idea may be impractical. Getting paid in advance has its own risks. What if I take the money and run? What if I produce, but not anything valuable? These are serious issues and I’m not sure they can be overcome. However, if I’m going to try to make the in arrears model work for me, I’d rather do it with my eyes open, acknowledging that getting paid for what I’ve already done is just a heuristic.

P.S. Looking at the above it strikes me that an alternative to getting paid in advance and in arrears is getting paid for what I’m doing right now, kind of like what I did for James Taylor Friday night. I (and a thousand of my closest friends) paid him to sing right then. What kind of business would make “pay for now” a source of revenue for me?

31 Comments

Steven R. BakerSeptember 21st, 2009 at 7:13 am

It sounds like what you want, that exists, is a form of fellowship position. Kinda like what Martin does at ThoughtWorks perhaps? Don’t you have opportunities like this available to you? I’m interested in this discussion, as it dovetails nicely with some changes I’m making in my own life.

KentBeckSeptember 21st, 2009 at 7:22 am

I had a position like this at Agitar, but that went out of business two years ago. I haven’t found a replacement.

Steven R. BakerSeptember 21st, 2009 at 7:31 am

I’m sorry, but I’m having a hard time picturing a world in which you can’t get a gig like that. Hell, even at ThoughtWorks (although I didn’t enjoy my time there). I’m interested to hear your thoughts as this develops.

zachSeptember 21st, 2009 at 7:39 am

What if there was a sort of site where people could make pledges towards the development of some functionality they want? The specs and deliverables could be judged by a third party arbiter that could also hold the money in escrow. It could be for little or big functionality. Then you could aim for developing things people want.

It wouldn’t really work for revolutionary or novel functionality, stuff people don’t know that they want. That would work better in a pay for what i’ve done model. For instance a musicians first works are largely speculative, do people want to hear this guy?

Niklas BjørnerstedtSeptember 21st, 2009 at 8:15 am

You are in software. You have one option that books don´t give you. I tweeted this earlier today: @smalltalk80: I wonder if the real driver for cloud computing will be that you can make customers pay for software without giving them a copy?

MathiasSeptember 21st, 2009 at 9:54 am

“Salinger has spent 50+ years cashing royalty checks and contributing back very little”. It seems to me that what you are describing and criticizing is intellectual property: what you receive is not so that you keep contributing, but rewards you for contributing your creation, and covering your development investment. I was always very uncomfortable with the principle of IP, but unfortunately, I am not sure what you can replace it with if “inventors” are to make a living.

Anon for thisSeptember 21st, 2009 at 10:05 am

It may not be glamorous, but it is possible to make a comfortable living ($100K+/year) doing ‘line-of-business’ software development from home, once you have the contacts. I think there must be lots of companies that would pay well to have Kent Beck as a remote member of their development team. So if it’s just about the money, it should be solvable. If it’s about the money AND writing the software you want to write And maintaining the lifestyle you want, then one of those may have to give.

AndrewSeptember 21st, 2009 at 10:05 am

“Getting a steady income for the work (you’re) about to do” is called “having a Job”.

I don’t want one either, and I can sympathize with your locality and portability limitations. Unfortunately (for you, not me), writing important seminal technical books is unlikely to work out, except possibly for the publisher.

My goal is to create something of lasting value that will generate returns over time. Having value and generating returns are very different things, and therein, obv, lies the real dilemma.

I don’t think it’s right to discount Salinger’s (probably accidental) path though. He wouldn’t continue to generate revenues if his product didn’t remain relevant right now, today (or if high school teachers of a certain generation didn’t consider it relevant). Technical publishing deals in content and ideas instead of presentation and story, though. Ideas are always free to the 2nd customer.

KentBeckSeptember 21st, 2009 at 10:14 am

Dear Jediwhale,

Your last sentence made me think. Perhaps I’m overconstraining the situation. That’s a serious set of tradeoffs. Giving up any one of money/lifestyle/freedom would be tough, but if that’s the way of the world, the sooner I adapt the better. Thank you.

J. David LoweSeptember 21st, 2009 at 10:16 am

I’d connect this with the Paul Graham essay you tweeted about a few days ago (http://www.paulgraham.com/publishing.html). In particular: “What happens to publishing if you can’t sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for.”

That is, it seems like you’re basically saying people are, by and large, not paying for books or software that you produced in the past. It seems extremely unlikely, then, that anyone (publisher or individual) would pay you to produce more of either in the future. But you do get paid for “now” at least some, when you are hired for speaking/training gigs, right? Can you see producing “loss leader” books and software to market yourself as a speaker & trainer? Are the “now” payments sufficient to recover the investment in stuff you give away for free?

Maybe this is why all of the fabulous musicians I love all have day jobs :P

No Name NowSeptember 21st, 2009 at 9:46 pm

Kent -

The solution is very, very simple: make something that people want enough to pay for, and then don’t give it to them unless they pay for it.

If they don’t want it enough to pay for it, don’t waste your time making it (except for your own enjoyment, in which case don’t whine about people not paying for it!)

But first, stop giving away things people are willing to pay for! This might fit with some perpetual-adolescent (uber-liberal) concept of world-hugging nobility, or feed some kind of suppressed martyr complex, but it is in fact fiduciary betrayal of your familial responsibilies as provider and protector.

You have invented, written, and popularized some truly amazing and worthwhile stuff. I’ve bought some of your books and enjoyed them and profited from the information in them.

I think you seriously need to go back to school and learn the fundamentals of economics and business; at least read some self-help books on the subject like Rich Dad Poor Dad’s Cashflow Quadrant and 100 Ways To Create Wealth – or resign from reality, get a PhD and become a tenured academic, insulated from the Real World for the rest of your days.

Good luck, on either path.

–X
P.S. Poor people do not create jobs, or change the world. It is OK to make money. Really!
P.P.S. All the fabulous musicians Mr. Lowe loves have day jobs because selfish bastards on the Internet think that anything digital should be free. Don’t feed these parasites your lifeblood!

Stephen SounessSeptember 21st, 2009 at 11:00 pm

When in doubt, sue – isn’t that the American way?

Presuming the download site did not have your publisher’s permission ot make your work available.

I saw on Twitter recently that the developer of JFreeChart had a similar experience, as can be read on his blog ( http://www.jroller.com/dgilbert/entry/11_755_free_copies_of ).

Stephen StillwaterSeptember 23rd, 2009 at 10:38 am

Well, I don’t know if I agree with everything’s that been said in the comments above, but I do think it’s completely okay for you to charge for your work.

All the books authored by you that I own, I’ve paid for — because I think good work should be rewarded. I don’t work for free, because I think my time is valuable. Of course, I think there’s something to be said for being willing to do your job for free, just because you like it so much (I’ve noticed that the best software engineers I know have this quality).

The same with music – if I like an artist, I will buy their music (on iTunes or wherever else). When I was a freeloading college student, I downloaded a lot of music online, but eventually I went out and bought the albums of my favorite artists.

So…in short…I think it’s a-okay for you to charge for your work – e.g. books. I’m not thinking of open source software here, because I think the business model for that is a little different. But for books, speaking engagements, screencasts, etc. heck yeah! You write good stuff — it’s worth paying for. :)

Bill CaputoSeptember 27th, 2009 at 11:41 am

The Salinger example misrepresents his situation. Salinger hasn’t written only one novel, he has simply only published one novel. A quick read of his wikipedia entry makes it clear that he has spent most of the last 50 years writing, choosing not to publish, because he doesn’t like the attention and fame that goes with it. What is also clear is that those works will be published after his death so society will get the benefit of that work — so the example doesn’t hold.

But even if it did represent his situation accurately, I don’t think that it was anywhere near unique – any musician who took an album platinum and then partied on the proceeds fits the bill. And it shows something much more fundamental about such a business model: society doesn’t pay the creator as an investment in his future (nor is Salinger somehow failing to honor some sort of pact with society by choosing not to publish) society is exchanging for present value. I buy a book (or don’t) because of the value it represents to me today. The thought that I was holding Kent Beck or JD Salinger’s last book, would not cause me to pay less for it – in fact, it might encourage me to pay slightly more as I realize that this is going to be it and I want to have the last of something I found valuable. What happens to that money afterward – is at best of passing interest to me. I got what I wanted – the book, and I paid enough to get it (the market rate).

What I am driving at is that a creator (of music, software, writing, whatever) creates something of value and that value can always be expressed in terms of its exchange into money – liquidity though is something else entirely and requires the creator to find a market for the value they are creating. That’s tough enough without misunderstanding what brings people to that market – its not to fund future investment, its to exchange for something of immediate value.

Jose M BeasSeptember 27th, 2009 at 1:51 pm

What if you just charge your customers part of those losses? Just consider that you are not having incomes from those free-as-in-beer projects and treat those costs as marketing expenses. Those expenses should be compensated by the corresponding part of your incomes (the balance of debts and credits must be cleared).

Of course it will make you less competitive if you are competing with others trying to be cheaper, but I do think that you can compete using other (more valuable) qualities.

Hope it helps!

KentBeckSeptember 27th, 2009 at 4:02 pm

Bill,

I agree that as an individual I buy a painting (say) because I find it valuable to me. The emergent property of this at a social scale is to allocate resources to people who are about to create value. It’s this social perspective I wanted to highlight because it came as a surprise to me.

KarmaRunsOverDogmaSeptember 28th, 2009 at 2:12 am

Paypal donate
Seriously

Give abusers a way to redemption

How much do you need to write your next book?

KentBeckSeptember 28th, 2009 at 7:58 am

It costs me ~$150-250K to write a book.

David SemeriaSeptember 29th, 2009 at 6:11 am

Kent,

There are many people who are uncomfortable with the current revenue models around OSS. The illegal downloads of your book also fit the same template: it’s hard to protect digital content, and if it’s hard to protect it’s hard to monetize.

I’ve been working for over 4 years on an open and fair system for monetizing digital content (mainly OSS) over the web without any DRM or other chicanery.

If you’d like to learn more, drop me a line.

Steve HayesSeptember 30th, 2009 at 12:38 am

From the economic rationalist perspective I think authors are expected to be motivated by the expected valueof royalties, averaged over all authors. They know the distribution isn’t normal, but if it was capped somehow then the expected value would fall and there’d be less motivation. So economically Salinger wrote for a *chance* of hitting it big. The smaller the motivation the fewer authors, and this seems consistent with allocation of scarce resources. Not that I believe authors are actually economic rationalists!

KentBeckSeptember 30th, 2009 at 10:16 am

The economic rationlist perspective hasn’t been helpful in explaining even my behavior to myself. I’m sure there’s more going on than that.

KentBeckSeptember 30th, 2009 at 10:16 am

The economic rationalist perspective hasn’t been helpful in explaining even my behavior to myself. I’m sure there’s more going on than that.

MegOctober 3rd, 2009 at 2:50 pm

It’s worse than that, Salinger has actively used intellectual “property” laws to discourage and prevent other people from contributing potential value to society. His “contribution” to society then becomes, in the long run, potentially negative, assuming other people spend time building on his work and are then prevented from sharing their products. Ideas are not scarce goods, unfortunately for capitalism. As soon as society decided that the only way to “live” is to produce scarce goods, there’s a whole bunch of stuff that should, in a rational world, stop being produced. Instead capitalism imposed artificial scarcity, killing off long-standing societal institutions (such as folk musicians and story tellers), by controlling distribution. That model is clearly falling apart, and I doubt you will find a method of putting it back together again where the movie and music and newspaper industries have failed before you.

Speaking of college tuition, have you considered professorship? Taking on set students and promising time and attention to them is certainly one of the ways to be paid for ideas based on current output. It might be possible to find grants for some of these topics, which is a method currently in place to be paid for future output. I don’t know how far along digital learning is right now, so you could do that without relocation, but it is certainly getting there. Some independent courses have sprung up on the internet. http://www.racialicious.com, for example, offers facilitated group discussions.

In the meantime, the options are salaried jobs, with the non-scarce goods being produced on the side, fan-supported sales of actually-scarce goods (signed copies perhaps? or other books you have read and added notes to?), or the modern-day equivalent of patronage/fellowship positions. Given the cost of distribution rapidly approaching 0, there is little chance that ideas will return to the realm of scarce goods.

Fabian RitzmannOctober 4th, 2009 at 11:40 pm

One of several roles publishers are supposed to fill is paying advances to authors based on expected revenue and risk. If that is not happening it is a sign of either the risk being too high or a dysfunctional market.

Marius de BeerOctober 8th, 2009 at 12:08 pm

Kent,
In my experience, individuals that use illegal copies of books, white papers, videos… fundamentally do not value original thought. My suggestion; ignore them.
Some individuals, such as yourself, should be paid to think.
There are many of us that buy your books. I have bought all your books, and I would have done so even if you personally sent it to me as a free pdf. I also believe that I am not the only one.
Charge for week-by-week access to your blog. No “history” or “archive” link. You pay for a week of Kent’s blog and you see a week of Kent’s blog. Back-orders of a specific week is available, at the cost of a week’s access.
I will be your first member. $5 a week sounds fair. Your work has helped me enough that I will be willing to pay that for the rest of my life.

Esko LuontolaOctober 10th, 2009 at 2:34 pm

Doing what you like and getting paid for it, would be lovely.

The article http://www.joelonsoftware.com/articles/StrategyLetterV.html presents this idea: make X a commodity (free or cheap) and then get money from Y, which is a complement of X. If people who use X also need Y, then the more people use X, the more people will buy Y.

I’m hoping that if one OOS framework/platform that I’m making becomes popular, then it would be possible to get income by selling high-quality tools for that platform. But until that happens, if it ever happens, it’s best to live by doing normal work. It’s much easier to get money by working for companies and doing what *they* want, than by trying to get money by doing what *you* want.

Jonas MüllerOctober 19th, 2009 at 9:14 am

Copyright is a way to give out government granted monopolies in order to “[t]o promote the Progress of Science and useful Art” (US Constitution, Article 1, Section 8, Clause 8). So I agree with Kent Beck that it is against the purpose of a good economic system (and against the purpose of copyright itself) if someone is paid endlessly for something he has contributed to society once instead of the money going to fund further creation of value (and thus “promote[s] the Progress of Science and useful Art”).

The paradox here is that the more value you create for society (i. e. the weaker the copyright) the easier it is for people not to pay you (well, except that it is just as easy to pirate stuff with strong copyright). However, I do not think that the solution should be to deliberately create less value for society (and thus a worse allocation of resources). Instead we should find ways to make a living for individuals and have them contribute a great deal to society. Unfortunately this is a hard problem to solve and like many problems, it doesn’t have a one size fits all solution. For some things we are already there (Apache, Linux etc.) and for others we aren’t yet. But just as with many hard problems, with enough effort and experimentation, we might eventually get there.

Having people pay before writing a book is maybe the best model, however it is also very hard to get to work. I am currently not aware of any authors that make a living this way. A less idealistic but currently more used model is to release books free as in beer (Creative Commons) on the Internet but also release them with a traditional publisher. There are quite a few authors (Cory Doctorow, Lawrence Lessig, Yochai Benkler, James Boyle etc.) who successfully do that. And it seems to be quite successful and become more and more popular: http://www.guardian.co.uk/books/2009/may/12/bloomsbury-science-free-online

Sean MurphyOctober 28th, 2009 at 7:42 pm

You have to work from where you are, which is the need to create new products or services that folks or firms will pay for. Whatever the existing deals are with your books and consulting, you cannot effectively go back and re-negotiate them. You have to go forward. Perhaps you need a vacation for a week or two but you need consider trading lifestyle for revenue if you need to save for college and retirement.

André Faria GomesNovember 1st, 2009 at 5:37 am

Hi Kent, I just would like to thank you for all the great job you have been doing all these years. I work for a small company in Brazil and we do have a lot of advantages by following a lot of things we learned in your books. I’m looking forward to read your next book and I’m sure you are going to find a profitable way to carry on with your great work.

JavierNovember 6th, 2009 at 1:01 pm

Hello, Kent.

“I found a download site listing 20,000 downloads of my latest book (…). I like lots of people reading my books. (…). I need to get paid for my work.”

In my opinion your conclusions might be innacurate. Did everybody who downloaded the book read it? Maybe some of them just downloaded it, had a look at it, and didn’t like it. Just as they would do in a real library. And, would everybody had bought your book in case they couldn’t have downloaded it? I don’t think so. Usually when people download the whole discography of an artist doesn’t mean they would have bought it if they didn’t have internet.

In case of musicians, it’s easy to see that people downloading their music is good for them. They get more popular, and more people go to their concerts, and with concerts the artists get more money than selling records.

In case of people writing books, it might be more complicated. But, if it’s not a personal questions, do you think you have been offered jobs thanks to the books you’ve written? Or you might have been paid for going to conferences. Maybe some of it is thanks to the fact that you’ve written books and people have read them, even if they didn’t buy them. Or maybe not :-) .

“What kind of business would make “pay for now” a source of revenue for me?”

Well, I’ve no idea, but since you asked for ideas, here’s one: you could be releasing parts of your books (or beta versions) as you’re writing them, and only writing the next part after you’ve received money for the previous one. A donations system, an agreement with your editor, or whatever. Ideally, you would meet people who’d need the book you’d like to write, and they’d pay you for doing it.

“I whined about not knowing how to make a living from open source”

Just for the record, at my company we do free software (I mean, the software is the customers’ property, so they can change it and distribute it) and we’re “paid as we go”. How long will it take us to write the software the customers need? We give an estimate based on that. Usually we get on well with the customers, so if later they need to add changes or maintenance, they ask us to do it. We’re also paid for that.

GeorgeDecember 8th, 2009 at 11:42 am

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