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mozilla 

has done a lot of good for the web, but the hybrid "for-profit owned by non-profit" model is and always has been a mistake.

You get the worst of both worlds -- a layer of nonprofit bureaucracy on top of for-profit business practices, compensation structures, and decision-making.

It reflects Mozilla's history, being born in the ideological swamp of hypercapitalist Silicon Valley, which frowns upon nonprofits, and which pursues profit, growth & "disruption" above all else.

mozilla 

I feel for the folks impacted by this round of layoffs. I hope folks at the top will seriously ponder that the right thing to do in this situation is to take a fucking pay cut yourself.

But above all, I hope we can find better organizational models to support the future of the open web.

mozilla 

@eloquence One really weird thing about this structure is that despite there being a non-profit that takes donations, it appears that none of the non-profit's money goes to products like Firefox.

mozilla 

@eloquence Without that "for-profit" money though, do you think they would have had even a fraction of the paid developers they had working on it?

I have my doubts that without it they would have been able to stay relevant in comparison to the other major browsers. Just look at some of the lesser browser projects without major financial backing and how lacking they are in terms of consumer expectation of features/performance.

mozilla 

@bpepple

The question for me is whether you can sustain a team large enough to maintain a high quality browser & participate in open standards development indefinitely, as opposed to what Mozilla has done, which is to sustain a much larger team on the basis of an _unsustainable_ revenue stream.

Mozilla's large open source efforts have been primarily funded by Google (briefly Yahoo), and that was always a very precarious long-term bet.

mozilla 

@eloquence @bpepple I think that, in a better world, Mozilla would receive large amounts of public subsidies in the interest of not allowing the complete degeneration of the browser market into a Google monopoly.

Feels like its too late for that now, though, and it probably wouldnt have worked with their hybrid structure anyway.

mozilla 

@eloquence @bpepple Of course, in the most ideal world web standards would not be a horrendously complex nightmare explicitly designed to make competition nigh impossible.

mozilla 

@eloquence Not really correct: en.wikipedia.org/wiki/Mozilla_

I think your criticism stems from the right ideas, but the problem with their structure is not financial profit itself.

mozilla 

@raucao

I am very aware how it works (I know this space well). I'm not suggesting Mozilla has been chasing profit, but that it shares many characteristics with businesses that do _because_ of how it's structured.

That's why I was referring to "business practices, compensation structures, and decision-making". Compensation is an especially significant point because it _does_ relate to profit-seeking behavior (excessive compensation aligns with profit-seeking at the individual level).

mozilla 

@raucao

Mozilla's primary business model (search box revenue) reflects a specific ideology and business structure; its decisions since then (e.g., experiments with sponsored content) have reflected the same ideology. They hire execs at exorbitant salaries who believe that this is the primary way to grow a business _because_ they decided to be structured as one.

Contrast that with e.g. the Wikipedia model or even traditional charities.

mozilla 

@eloquence Yes, that's a great way to explain it! Completely agree about the ideology and resulting hires. I guess they're just too deep in the Valley bubble. You can even see it with their accelerator programs, where in order to "Fix the Internet" they choose open-source projects by way of deciding if they can be the next Big Thing™.

mozilla 

@eloquence Yeah, I never really understood what was going on with MoCo and MoFo. I asked MoCo employees a few times and they didn't usually seem to have a clear either which way money flowed. I know you can check MoFo's public financials, but those never made much sense to me either.

I guess we might have a partial answer to that now? The money didn't flow in the right direction.

mozilla 

@eloquence Having worked there, the Foundation (MoFo) and Corporation (MoCo) were actually pretty separate.

The non-profit owning the for-profit is kind of a tax loophole AFAIK whereby MoCo pay for the use of MoFo's IP (logo, etc.)

In 2010 there were <5 people working for MoFo, then they scaled it up to focus on Webmaker, Open Badges, etc. (stuff I was part of) and then scaled back again.

Lots of mistakes, but I don't think non-profit bureaucracy is one of them!

mozilla 

@dajbelshaw

For sure - I didn't mean to imply otherwise. To me the separation _is_ the problem: you have a separate Board, a separate ED, a separate revenue strategy, 501(c)(3) compliance requirements to worry about, all the while the for-profit goes about its business in a manner largely independent of this structure.

Tax reasons are a huge factor, but of course MoCo could align its business practices much more with NPO practices even under its legal structure, but chooses not to.

mozilla 

@dajbelshaw

And those tax reasons are tied to a specific decisions which I would frame at least partially ideological: to make itself utterly dependent on Google (briefly Yahoo) as a source of revenue. That achieved faster growth, but it meant foregoing the creation of single, independent organization with diversified revenue.

This decision to grow a business instead of an institution is what I am most critical of.

mozilla 

@dajbelshaw

As you may know, 501(c)(3)s are legally entitled to earn as much mission-related income as they want - that's why massive nonprofit enterprises with plenty of questionable practices like Goodwill can exist. They can even make substantial taxable _unrelated_ income.

So you can absolutely create a nonprofit that makes deals with other businesses to sustain itself -- just probably not one that makes one big deal with a single corporation that almost entirely sustains it.

mozilla 

@eloquence for profit company owned by a non profit charity is a very common pattern in the UK that seems to mostly work fine imho.

mozilla 

@jdaviescoates

I can't speak for the UK situation -- I know the 501(c)(3) space pretty well, including the considerations under the US tax code. It's in this context that my criticism applies.

What motivates the choice of this legal structure in the UK, and how are those for-profit companies run? For example, do they tolerate inflation of executive compensation? Would be interested to read more about this before forming an opinion.

mozilla 

@eloquence to be honest, it's a bit different from the Mozilla situation, I think having two separate entities is normally just because charities are not allowed to be political and to campaign for specific changes in policy etc. And so charities often have another wholly owned entity that is not constrained in this way to push for the changes they want to see. I could be wrong, but I think it's probably quite rare that they are proper commercial arms generating significant revenue.

mozilla 

@eloquence saying that, there are example like e.g. NEF consulting nefconsulting.com/ which are the commercial arm of neweconomics.org/ - but again, I think that's mostly about getting around the restrictions UK charities have on trading (in addition to the restrictions that have around being "political").

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A Fediverse instance for people interested in cooperative and collective projects.