Headcount in Big Time License

Hacker News has got ahold of the Big Time License on the front page today. Big Time is the free for small biz, FRAND for big biz license, currently at version 1.0.0.

I am seeing more chatter and confusion about the definition of small business:

You may use the software for the benefit of your company if it meets all these criteria:

  1. had fewer than 100 total individuals working as employees and independent contractors at all times during the last tax year
  2. earned less than 1,000,000 USD (2019) total revenue in the last tax year
  3. received less than 1,000,000 USD (2019) total debt, equity, and other investment in the last five tax years, counting investment in predecessor companies that reorganized into, merged with, or spun out your company

Adjust these dollar figures for inflation according to the United States Bureau of Labor Statistics’ consumer price index for all urban consumers, United States city average, for all items, not seasonally adjusted, with 1982–1984=100 reference base.

This isn’t supposed to be a working dictionary definition of small business, so much as a set of tripwires to keep businesses that should reach out to do deals from slipping by for free. We don’t have to come up with revenue, headcount, or capital figures that all sound like one business. But I’m opening up again to the idea that 100 headcount might be too high.

FWIW, PolyForm Small Business is much the same, without the extra tripwire for investment.

Should we bump it down to 10? 20? 25?

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Dunno how reliable this website is, but…

https://smallbiztrends.com/tag/small-business-statistics
What is the average number of employees in a small business?
The average number of employees in a small business is about 10. This is the average for business firms that have at least one employee.
Out of the small businesses in the US that have staff members, here are statistics on the breakdown by size:
5,339,918 small businesses have 1 to 19 employees
5,976,761 small businesses have 20 to 499 employees

20 sounds good to me.

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Also, I can see that you got a bunch of really dumb and annoying comments in that HN thread and you handled them very well.

I still haven’t mastered the art of keeping my temper in check when dealing with dum-dums on the Internet.

Great to see you’re ahead of me on this one :slight_smile:

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Yeah I think headcount lower is good. 20 or even 10.

I see 5 and 10 in the wild as the “free starting tier” or the “flat rate until you are N users” for commercial products.

Making it 10 aligns all the numbers a bit. 10 people at an average $100K per year in total costs == $1M.

Frankly so much better than open core models to me.

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Oh god, I read the comments.

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Don’t read the comments!

Try and read the people who wrote the comments. :stuck_out_tongue_winking_eye:

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10 or 20 is starting to feel more intuitive. And a change could deflect attention away from that relatively minor detail. Or maybe I should take heart that of all things, walk-up readers focused on that.

There’s the further wrinkle of headcount, rather than employees specifically. To keep larger firms that use contractors slipping through, the current version of the license counts both employees and contractors, over the last year, regardless of full or part time status.

… fewer than 100 total individuals working as employees and independent contractors at all times during the last tax year

I could see a change going out in 1.1.0. Probably with some tweaks for the “fair price” definition.

Really appreciate thoughts here!

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Our company have staff. Employment status is a separate thing. We are fully distributed and so have a mix of agreements around the world.

I wonder how air tight something needs to be here, vs clarity of intent?

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It’s a single figure, hard-coded into the license to avoid having to parameterize a legal document, Fair Source-style. It just needs to make intuitive sense. Never perfectly right for anyone, but rarely wrong enough to be a real stumbling block to adoption.

I meant the variations around calling out type of employment.

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That language is pretty loose right now. I wasn’t thinking of changing those words, only the number.

I do think the terms need to avoid letting companies with a handful of employees and an army of contractors through. If you can negotiate offers or contracts and pay so many people a year, you can negotiate and pay for a license for software.

Well, there is an international definition of the small and medium business sector that comes out at 250 employees. I have a paper on that somewhere… I think it was pretty rigorous - done for some IGO like UNCTAD or something from memory… it varies a little from one country’s national accounts system to another, but it evens out at about 200 to 250.

If you want to push a concept of ‘Small Business’ the vocabulary also includes concepts like ‘Microbusiness’ which has been used in analytical work at the national scale in various parts of the world… ‘Microbusiness’ (again from memory) is I think about 10 employees max which is maybe where you want to take this?

If you couldn’t care less about how economists/data scientists work, then we are looking at an arbitrary threshold. That might be better here, and gives you the scope to think about what would users expect to see and how much rope you want to give scheme users.

My recommendation is based on your branding… it’s called ‘Big Time’ and uses the term ‘Big Business’, which to me means 'anything that is not a micro/small/medium business… which again… fgenerally means a business with more than 250 employees. That’s the figure I use for my license. ‘Big’ means ‘more than 250 employees’.

This leaves you with what to do about ‘non-big’ business… which isn’t just ‘small’… there are also the Micros and Mediums.

I reckon a lot of early adopters would expect to see Mediums in the Big category, and from the POV of licensors the incentive is clearly to collapse the threshold to the absolute minimum without it coming across as a trick which I think, if you have a Big Time license and use the phrase Big Business it’s hard to persuade owners of say a company with fifty employees that they have a Big Business… cuz they almost certainly won’t see their biz as Big, right? Most people see Big Business as something faceless, creepy and corrupt AFAIK… you know all the FANG stuff and privatized utility and mining companies and so on?

Simply put, you might want to have threshold of say 10, but to do that it looks as though you would have to modify the terms because commonsense tells us that a company with 11 employees is simply not big enough to be ‘Big’?

What I do is this:

The term ‘contractors’ is not used in the license text because most countries have regulations on the tax status of workers and are best placed to regulate who is classed as an employee, and who is an independent contractor.

Big Time Problem Statement, and Alternate Solution

Big Business tends to benefit more than smaller developers at a scale of massive transnational ‘cloud’ service provision due to the freerider problem in Free and Open licenses.

Smaller software developers are missing out on recouping research and development costs and project funding. This results in new features and maintenance for useful software going unplanned, and in some cases, useful projects being abandoned.

The freerider problem is well understood as a type of collective decision problem in economics.

Software is what is known as a ‘Toll Good’ or ‘Club Good’.

These are goods that are non-rival, in that use by one person does not prevent use by another. Toll goods are also excludable, which means persons and firms can be prevented from using them.

Excluding users or use cases is done through software licensing, normally for economic reasons although some exclusions claim to solve problems relating to technical contributions, (‘Copyleft’/‘Share-Alike’) or moral dilemmas (‘Ethical Source’).

By leveraging the excludable nature of software, a new licensing model could prevent cloud service providers and other large scale freeriders from obtaining benefits at the cost of smaller developers.

Not all Big companies will be freeriders. Some do contribute either labor time in the form of code or sponsorship, usually at their own discretion.

Also, many smaller developers and individuals will freeride too, but monitoring all uses of software is impractical and so proprietary software is the only solution if we want to prevent freeriding across the board.

The demand for immediate availability of computer system resources, especially data storage and computing power, without direct active management by the user has been growing rapidly.

These ‘clouds’ are distributed over multiple locations, each location being a physical data center, owned by, or at least controlled by a massive tech oligopoloy spearheaded by one of the Tech Giants like Google, Amazon Web Services (‘AWS’) or Microsoft, (‘Azure’).

Information about the scale of these companies operations at the technical level is hard to come by, and so proxy measures of size have to be used.

The requirement is for a license that allows free use to non-freeriders and excludes freeriders, but only at a scale that is non-trivial.

Insisting that an amateur or home user pay for software while a large scale cloud service provider gets the largest slice of the pie feels mean spirited, counter-intuitive and counterproductive.

So, we are left with two problems: How to identify Big freeriders?

The most efficient way to do this is to be able to identify, and exclude any Big businesses that don’t pay.

This requires a license that defines the properties of a business that make it ‘Big’ for the purposes of assessing the scale of freeriding.

A business that is ‘big’ in forestry, mining or agriculture, perhaps with a turnover of billions but just uses a program in their accounts department with has maybe one hundred personal machines is not the same as a company like Amazon or Microsoft who can upload the program onto their system and make it instantly avaialable for millions of consumers in return for a subscription.

The rationale for asking a Big business to pay, to limit the freeriding problem is to tie the license terms to the type of freeriding we want to discourage.

This suggests that the Big Time license, perhaps ought to consider the type of use rather than the type of entity.

The AGPL uses a definition that targets companies that provide ‘Software as a Service, (SaaS’) and seems to demonstrate some success in deterring use by SaaS providers.

By binding the license to SaaS providers only won’t eliminate all freeriding, but perhaps might be able to do a better job of eliminating freeriding among SaaS providers as the terms will be more specific and thus, less ambiguous and thus easier to monitor and enforce?

The current method of excluding all non-paying, Big businesses seems to be somewhat arbitrary and logistically complex since it uses multiple ‘tripwires’ to catch companies that slip through the net and yet it ignores freeriding among smaller entities - all the while perhaps being too ‘opportunistic’ in the case of large businesses that may well be able to pay for a license but would possibly be just as happy to use an alternative program should they be asked to pay under this license?

Just to add, the 100 person threshold would exclude Basecamp, which is certainly not a small business.

For me, the categorisation of small versus big, would be whether or not the company as a Human Resources department.

There is also the matter of vc-funded startups, however they would be too small/“agile” to waste their time thinking about licensing, and just want all the free credit options initially, delegating payments and licensing for “when we grow up” phase.

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Big Time has a capital-raised threshold, so companies with small revenue and small headcounts that raised $1m still count as big.

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