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A reader at Quora posted this question:
What forms the cornerstone of a modern dictionary company's business model? These days, when owning a physical dictionary is no longer important or necessary, how do dictionary companies make money?
This is our answer:
The Kamusi Project is still struggling to develop a successful business model. "Kamusi" is the Swahili word for dictionary, and Kamusi is a non-profit organization dedicated to producing advanced dictionaries for as many of the world's languages as possible. Our admittedly impossible aim is rich interlinked data for "every word in every language" - in principle, that's the OED multiplied 7000 times over. And here's the kicker: all of the data is to be available to the public for free.
As innovative as the dictionary model is, the business model is horrible. There are three basic problems:
- The average dictionary consumer cannot or will not pay the costs needed to get data into their hands - a student in the Andean highlands would be very glad for a comprehensive resource for her Quechua language on her smartphone, but she's not going to ante up for the service, and nor should she be expected to.
- A good dictionary entry takes time to produce, and the only reliable way to get the necessary amount of a specialist's time is to pay them. Money. In our experience, a solid entry takes an average of 6 minutes to produce when you're cruising. So, 10 entries an hour, call it 70 entries a day, you could have a respectable 20,000 terms completed in about a year. How much does it cost to hire a language professional for an hour, or a year? That's an indication of what we need to raise, potentially for 7000 different languages.
- Because Kamusi is a non-profit organization (501(c)(3) in the US and similar status in Switzerland), there are many business opportunities we cannot pursue, legally. There is no possibility for outsiders to see a return on investment - no chance for venture capital or startup funding, were someone to see the goal of all the world's language data as holding a profit-making potential.
So, we need to pay people to produce the product, but we cannot charge people to use it. We've developed a few solutions, some of which cannot be implemented until we complete some more programming, and some of which (variations on the theme of asking people for money) have yet to see a glimmer of success. The overall strategy is to raise money to pay for the production of data. We've got dozens of languages configured and people trained and standing by who we can pay per-entry when funds are available. Money in, data out. Repeat, and add a dash of crowdsourcing. More specifically:
- The fastest way to pay for development of a dictionary in a particular language would be a grant, whether from a government agency, a philanthropy, or a corporate giving department. Grant funds from both the US and Canadian governments have gotten us to the point we are, but those streams are currently dry (note to self: add "sequester" to the dictionary). Finding grants takes a lot of time and labor, and most granting agencies don't start salivating when you talk about dictionaries. Also, the grants that we're hopeful will become available to us, now that we've proven the Kamusi concept for twenty languages, will probably be for the usual suspects, particularly for European languages from governments that understand the importance of addressing multilingualism - but that will leave economically weaker languages out in the cold. If we think of a dictionary as a public knowledge resource, like a school or library or museum, then building the resource with education-oriented funds from public or private sources is a perfectly logical business model, if only those funds were available.
- We ask the public to join as members, for almost nothing a year. If a thousand people were to join, we would have some core revenue that would take care of a lot of basic needs. Have you joined? Didn't think so. We could probably make this work if we had a full-time fundraiser, but we don't, and the amount of effort needed to get the stray thirty bucks just doesn't pay.
- We sell some things through links on our pages, particularly a unique clock that tells time according to the Swahili system. We used to have Google Adwords as well, but ads really cheapen the look of the site, versus the revenue they generate. These are minor sources of petty cash, useful to pay for things like renewing domain name registrations, not for creating great data.
- We have planned a system we call "Buy This Word". BTW will enable people to contribute the amount needed for a specialist to produce as many entries as the donor chooses to sponsor, in the language they wish to support. You could buy your dad 10 Xhosa words for Father's Day, for example, while a Korean bank could support 10,000 entries for their language. When it's developed, this will be a cool system - money in, data out. You'll get credit and links to the completed entries you've sponsored, and you'll be able to see the results of your donations materialize in real time and chart the amount of times those entries are accessed, in perpetuity. Maybe crowdfunding will be the magic bullet for sustainability. At least, we'll give it a try, as soon as we can pay for the coding.
- We have also planned a crowdsourcing system we call "Play to Play". Essentially, we will change our model from free to free(*), where you're the star: in order to access the data, you'll have to contribute something that you know. There are a zillion ways that this could go bad, so the programming will be very intricate, with independent rating, commenting, and reversioning for just about every element of every entry, and questions that adjust to the knowledge and skills of the particular user. The goal is a scalable, self-regulating system that will produce initial data of useable quality on the cheap, that can then be reviewed by specialists when we have money to pay them. The programming specification is complete, and we could implement in about a month if we had funds to pay the coders.
- In the long run, we hope to license the data for commercial use. For example, the data model we have designed will enable game-changing leaps in machine translation technology. Some people have a moral aversion to the idea that a technology or language service company would make money off of a resource they contribute to. I don't. If a big company wants to license the data we produce for, say, German to Portuguese translations, and those license fees help us develop resources for, say, an endangered language in Namibia, then we're far ahead of where we'd be if we remained pure and untainted.
In fact, the business of producing dictionaries has been far too pure and untainted, at least as far as Kamusi's business model is concerned. The fundamental problem is that our goal is making dictionaries, not making money. Because money is the pathway to language data, not the organization's mission, we are constantly banging our heads about how to pay for what we want to accomplish. It's a lousy business model but, lacking an angel donor, it's the best we've got.
(Cross-posted from Quora on 13 June, 2013. The discussion at Quora is likely to have had interesting updates since the time of this cross-posting, so it is recommended to venture there to see how this topic evolves.)