How many people do you think took advantage of this offer? A very exact 0%. I was shocked.

I’m at a loss to explain it. It could be that the perceived hassle of sharing a link is seen as too high compared to the reward. But one click for $2 sounds like a fair deal to me.

It could be that when people are set on buying something, they don’t want to be distracted by anything else, so they’d rather just go ahead and finish the purchase right away.

It could be that for the kind of product they are buying, they are scared of trying to get a discount, no matter how small, because it would feel less “real” or “serious.”

But really, I haven’t figured it out yet. If you can explain this, please enlighten me!

When you create a product, you can now choose between the usual PayPal “Buy Now” button, or the “Subscribe” button. You can specify the length of the subscription in days, weeks, months or even years.

The screenshot below shows an example of a subscription that will bill users $3.99 every month.

As usual, we use PayPal as the payment processor. Your customer will be billed regularly for their subscription and the money will be shared automatically among the shareholders of your virtual startup.

This feature is in beta. If you encounter any issues with it, let us know.

A: The basic idea here is to build a site to take advantage of the great domain name. By going on FairSoftware and listing your site, you should be able to find a technical co-founder who can program your site or develop content for what is currently a parked domain.

Let’s assume it works out pretty well and the combination of the domain name plus the site content becomes successful. An acquirer comes along and offers you one million dollars.

Sweet. But who pockets the money?

You both agreed to the Software Bill of Rights. You are still the sole owner of the domain name, but your technical co-founder is the copyright holder of the site program and content.

You could sell just the domain name and keep the million dollars for yourself. But to do that, you’d have to shut down the site first, since you’d lose any rights to your co-founder’s code and content. Then you’d have to rebuild everything from scratch. Probably not a good idea.

Or you could convert your FairSoftware startup into a corporation (this is explicitly allowed in section 3.1 of the Software Bill of Rights), share for share, and then have that corporation be acquired for the million dollars. So both you and your co-founder would share the money, according to the original split you decided when you created your FairSoftware startup.

If you consider that without your co-founder, you would never have received the offer, I think it’s the right way to go.

It’s such a cool project, we had to find out more from Robin and Owen Spottiswoode, the two co-founders.

Alain: Tell us about your product and maybe where the idea came from, or why you think this is important

Robin: The idea came from research I was doing for a presentation on Digital Rights Management whilst I was at university. I was simultaneously fascinated and appalled at the way the music industry operated. I was fascinated at the audacity of an industry for whom it was common practice to keep its most important commodity – artists – in a legal stranglehold and appalled that this was the way artists continue to be treated. I came to realise that it was the industry itself that was the root of the problem, and became determined to change it for the better.

Owen: Aucadia.com is all about bringing music fans and artists closer together, and finding a fairer way to distribute music and share its profits. We’re trying to build a community where artists are given the freedom to record their best music, and fans are able to get involved in the bands they love, and share in their success.

Robin: We wanted to get away from the idea that record labels dictate everything – from the price of the music to which songs are recorded and released. We want to give this power back to the artist and fans, the people that matter.

Owen: The idea behind Aucadia.com is that fans buy and sell ‘shares’ in the bands they like, at prices determined by them. Shareholders can download an artist’s entire back-catalogue and get access to exclusive gigs/shows and opportunities. The price of a ‘share’ will rise and fall depending on how popular and successful an artist is, so by supporting a band early in their career you can have a stake in their future success.

Robin: The emphasis is definitely on collaboration – we encourage fans to get involved by putting on gigs/shows and helping out the artist in any way possible. We want to break down barriers between artists and their fans in a way that will benefit both sides.

Alain: This is great. It’s also so close to our own values here at FairSoftware. What stage are you at (do you have code, specs, etc.)?

Robin: I’m coding the site as we speak. The specs are all there, it’s just a matter of getting all the functionality working the way we want. It sounds like a boring task, but it’s actually a lot of fun! I’m setting up a complete trading market, where artists’ share prices are dictated by trading between fans and will soon be able to pull all sorts of graphs from the data. It’s not like anything I’ve done before, which is what makes it so interesting (if a bit daunting). I’ll need to tie up a few loose ends before some more testing and debugging, and then there will be a closed alpha release before Christmas.

Owen: Once we’re happy the system is working we’ll jump straight into a public beta with ‘play money’. Each user who signs up will get some funds to build a portfolio with, so that they can start trading straight away. This will be a great way for people to get their feet wet without having to take the plunge and invest their own money straight away. This will also give artists the opportunity to test the service and see how it works.

Alain: What help do you need now?

Robin: We need able-bodied PHP programmers to help with general coding/debugging along with testers, lots of testers. Any PHP programmers that have experience in CakePHP would be a huge bonus, but it’s not a necessity, as Cake is similar to many other frameworks. If you want to get involved, please please please check out our page on FairSoftware or email me. It goes without saying, if you help out you’ll get shares through FairSoftware and be able to share in Aucadia’s success.

Owen: We’ll also be looking to raise our profile in the music world as we get closer to launch, so anyone who would be able offer insights into the industry would prove a valuable team member.

Robin: But the site is all about collaboration, so anyone with an interest in music and new media should definitely get in touch.

Alain: Tell us about yourselves, your backgrounds

Owen: We’re both really into music – we’ve played in a band together for several years – which is what got us both interested in this project. Robin has been doing web development for a while, whilst I work in the media, so there is a natural division of labour: he gets his hands dirty with the nuts and bolts of coding the site, whilst I’m tasked with planning our business development.

Robin: I divide my time between coding websites and bowing/plucking/hammering a musical instrument. This project encompasses the things we are both interested in, which is what makes it so exciting for us.

Alain: What else will you need to succeed, or is there anything else that would make a difference for you?

Owen: Our business model should start generating money from launch, but it gets more successful the more people use the site, so we would consider outside investment if it allowed us to fast-track our marketing strategy and get the word out more quickly.

Robin: We need good people who are passionate about the future of music to get involved. The bigger the pool of ideas, the better the outcome will be. Currently we are trying to encourage interest in the project, to give like-minded people the chance to get involved at this early stage and share in any success. Aucadia.com is going to be a marriage of the social and music web in a way that will be self-sufficient, allowing complete freedom The community will be a key aspect to this, so we are looking for people to help manage and promote the community from the outset.

Owen: And we will have someone else to blame if it all goes horribly wrong.

Robin: *laughs* Yes, that too.

You can follow the progress of the project on twitter: @aucadia.

If you are interested in helping with development, click here.

That’s what we just made really simple now on FairSoftware with our new feedback widget. Once you setup your idea and enter a description, the community can give you instant feedback on three key elements:

Here are some examples:

• Is there a market for bugcollect, a web site that collects logging and crash reporting information (early feedback from community seems to indicate so)?
• Can a Facebook game of power and political intrigue make money?
• Is an iPhone app that lets you create an emoticon from the built-in camera useful?

We figured that these three criteria are the most important to help improve your idea:

• You need to express your idea clearly, so people you’ll be pitching to (co-founders, business partners, potential customers), understand what you are trying to build
• Your product must be useful, otherwise no one will care. Are you solving a real need? Make sure you are not confusing a technology with a need.
• Even if you do great with the first two questions, you don’t have a business unless it can generate money. Some ideas are great and very useful, but you simply can’t build a business around them. They may be better suited for an open source approach, as a side project. Better to know before you invest too much energy.

Just visit any of the public projects to provide feedback. You’ll be doing a service to the startup community. New navigation buttons let you go from one idea to the next with one click.

And when you want to give more detailed feedback to the founders, there is a discussion thread attached to each project idea. Who knows, you may even join the project and become a co-founder if you think it’s a great idea.

I asked Steve for some more info. The interview is below:

Alain: Tell us about your product and maybe where the idea came from, or why you think this is important

Steve: I’m an avid strategy gamer, and this game has been slowly coming into form over five years. Originally I envisaged it as a web application, but recently I came to realize that Facebook would be a perfect platform for it.

The setting for Despots is a fictional middle-ages world of many states or kingdoms. Each player plays a single character in that world. The central idea behind Despots- is that the players’ characters form the ruling elite of various states – the kings, courts, functionaries, generals, lords and ladies.

Player characters will be able to buy land, build armies, invest in businesses, collect taxes, command their underlings, spy on each other, and above all, conspire with one another via email.

So in a nutshell, I expect Despot to be a snake-pit of shifting alliances, intrigue, and skulduggery, both on an international level, as various states cooperate or compete to their best advantage, and also within each state itself, as individual player characters do the same on a personal level. It will be about strategy, diplomacy, and above all, trust.

Of course there is much more to it — suffice to say that the game is one that hasn’t been seen before.

Alain: What stage are you at – do you have code, specs?

Steve: The game is almost fully specced. There are some minor details awaiting further thought and/or play-testing, but all significant spec work is complete. There needs to be some tweaking now that the aim is the Facebook platform rather than a straight web app.

Alain: What help do you need now?

Steve: I need Facebook app developers and a 2-D graphical artist.

Alain: Tell us about yourself, what is your background?

Steve: I am a software developer with no time on my hands to do this concept justice!

Alain: What else will you need to succeed, or is there anything else that would make a difference for you?

Steve: I am unsure exactly how to monetize a Facebook application. I am hoping that someone with Facebook development experience will have a better idea.

Alain: Thank you!

His gut feeling was that as the main developer, he of course should keep most of the revenue.

There are two ways to approach this question. You should use both. If they lead you to similar numbers, you have your answer. If not, something is wrong and you need to understand why before you proceed with a revenue sharing deal.

Be Realistic About Who Needs Who

Everyone tends to have a high opinion of their work. That’s a problem when trying to reach a fair deal.

As a developer, you know how tough it is to write good code. To you, English writing doesn’t seem like a big deal – although you are not willing to do it yourself.

Well, the writer on the other side thinks the same way. It all goes down to negotiations and who can walk away from the deal.

Ask yourself this question: if the writer was to quit when the first version of the app is out, would it be a problem or not? Or will you need them to stay around and improve the product?

This is the key question that tells you the difference between a co-founder and a contractor.

Obviously co-founders deserve a significant amount of shares. Contractors want to be paid, but they can be replaced.

Be realistic about the fact that you indeed need a good writer. Your app’s quality may depend on it.

At the car dealership, you must be willing to walk out three times to get a good deal. Equity negotiations work the same way, except that once you reach a deal, you need to actually spend time with the other person. So you can’t burn bridges.

Discounted Value of Future Revenue

The second exercise is to look at the potential income and check whether it’s in line with compensation. If the writer is expected to put about a month of work full-time and you offer 1% of an app that may make $20,000, that’s a total compensation of $200 for the month. It just doesn’t compute.

No need to go back to business school and run a fancy analysis about discounted values and risk factors, but it’s clear that anyone who works for revenue share is taking a risk. So even the $200 above is a best case scenario.

In reality, there is a possibility that the app never makes it to the market, so the writer makes $0. The app could do ok and generate a few thousand dollars. The writers makes less than $20 (the price of a dinner).

The Number

So what is the right number? In the case of that developer, the amount of work expected of the writer was significant (a month, probably more with updates, changes and what-not). The job was more that of a co-founder, not a hired gun. My recommendation: anywhere from 25% to 40%.

What do you think? Is that the right number? Is too much or too little?

Many of you asked us for a more flexible way to add co-founders early on and offer more flexibility on the allocation of shares, since you haven’t always found all your co-founders by the time you have your initial idea.

Therefore, creating a Fair Project is now split in two parts. First, you setup your project, with a very simple one-page form. At that stage, all you really need is a name and some idea of what you want to build.

You can leave your project in that stage for as long as you want. You an start adding co-founders from friends you know, advertise your project to the rest of our community, and also crowdsource your idea by gathering feedback.

During that setup phase, you can freely add or remove co-founders and modify the share allocation as many times as you want until you are happy with the results.

Invite Co-Founder

Edit Shares Split

Once you have settled on a founding team, you activate the project. That’s when each co-founder has to agree to the deal by approving the Software Bill of Rights. From then on, co-founders can start contributing, write code, and so on. Everyone is protected legally. As before, you can grow your project and bring more contributors on board.

We hope this improvement will make it even easier than before to start working on apps, even if you haven’t found a team yet.

As always, feel free to send us feedback and requests for more improvements.

While we are at it, it’s also been about 1,000 days since we embarked on the Fair adventure. Yes, about 3 years ago, we came up with the concept that you see today.

This is a great opportunity to thank the whole community, the people who helped us, gave us advice and supported us, especially since our launch last September.

Thank you all.

So I got very interested when I saw Austin Brandt post a Fair Project around the concept of “Web Conversations.” It’s a space that I had been avidly watching for almost 10 years! So I challenged him right away to probe if he was any different than the few plug-ins I had seen come out in the last few years.

To my surprise, he had an idea that was new and innovative. When he explained it to me in details, it made a lot of sense. It’s one of those ideas that sounds quite simple and obvious once you hear it, but somehow, no one has done it yet.

Austin is a student in entrepreneurship in Illinois with a strong history of entrepreneurship. He brings vision and business sense to the project. He is looking for a software developer to further expand on the concept.

A lot can be done to improve the way we interact online and I believe that some amazing products will emerge in the coming years. I hope this project is one of them.