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September 28 2010

Four short links: 28 September 2010

  1. What Happens at Y Combinator -- a fascinating infomercial for Y Combinator, but it's interesting despite the soft focus. Usually we advise startups to launch when they've built something with a quantum of utility—when they've built something sufficiently better than existing options that at least some users would say "I'm glad this appeared, because now I can finally do x." If what you've built is a subset of existing technology at the same price, then users have no reason to try it, which means you don't get to start the conversation with them. You need a quantum of utility to get a toehold.
  2. Going Freemium, One Year Later (MailChimp) -- Throughout history, and across all the businesses he researched, the ratio of free-to-paid-subscribers ultimately ended up at the dismal ratio of 10:1. There were a lot of awesome presentations at that Freemium Summit. But this was the presentation (just this one slide, really) that stuck in my brain. (via Hacker News)
  3. Cloud9 IDE -- The Javascript IDE by Javascripters for Javascripters. Source is open source and on GitHub. (via RussB on Twitter)
  4. Mifos -- open source software for microfinance. (via msbehaviour on Twitter)

September 21 2010

Open source cuts microlending complexity

Integrating any sort of technology into the developing world requires a deep understanding of the available tools and usage patterns. The degree of difficulty -- already considerable -- increases exponentially when you're dealing with bank and financial software.

The Grameen Foundation's Mifos Initiative is tackling those integration challenges in a unique way. Rather than develop proprietary software with hundreds of country-by-country variations, Mifos is making its code available via open source. Financial institutions can repurpose the software for their unique microlending needs.

In the following Q&A, Mifos director of engineering Adam Feuer explains the rationale for pursuing the open source option. He also discusses some of the unique mobile and integration challenges his team is encountering.

Mifos is an open source technology. Why did you go that route?

Adam FeuerAdam Feuer: Mifos source code is free and you can download it from our website. We're hosted on SourceForge.

We chose open source for several different reasons. Transparency is one: We believe that banking software, especially microfinance software used in the developing world, needs to be transparent and open. That means open source so that people can see how it works and verify that it's operating correctly.

We also believe Mifos should be free so you can modify the software and make it suit your application. If we went out of business (not likely to happen but it is possible), or if people didn't like the direction we were going, they wouldn't be stuck with what we had accomplished or the direction we were going. That helps banks feel a lot more secure.

How many contributors are touching the code?

AF: Mifos is a small open source project, but it's spread all over the world. Twenty of the 40 or so contributors are paid by the Grameen Foundation and they directly report to me. Another 10 contributors are third-party developers who are working with us to develop software. They work for partner organizations. Another 10 or 15 are volunteer developers who are just contributing to make the world a better place.

We have plenty of work and would love to talk to you if you are interested in helping and you program in Java or JavaScript and you know user interface technologies.

How are you addressing mobile?

AF: In Africa and India you send SMS messages with your phone to access your bank account. It takes a few messages back and forth to move money from one account to another or to make a payment. But it's way better than having to drag yourself across a dusty city and use public transport to visit a bank branch where people may or may not discriminate against you because you're poor. Toward that end, we're integrating with a major mobile money system in Africa, a prototype called M-PESA. There's also a mobile money system in India that we're looking at for pilot projects.

What are the major challenges you're encountering?

AF: Information technology in the developing world is a challenge for a variety of reasons. One of them is finding power to run a computer. Finding a good Internet connection is also challenging. We have to design our software to work in these conditions.

Another problem is that if you know information technology in say Kenya or India, you can get a better job. So microfinance banks have a hard time keeping employees that know anything about computers. We have to design our software so that it's relatively easy to use and easy to learn. You can be sure that you'll be training new people on it very frequently.

The main challenge that we are facing right now is how to open Mifos up in a modular way so that we can enable someone to write a plugin to customize Mifos for their particular country or environment. We see supporting plugins as the way to welcome everybody in the world to the promise of usable financial services for the poor.

This excerpt was edited, condensed and adapted for Radar. The full interview, available at the PayPal Developer Network, is part of a collaboration between O'Reilly and PayPal exploring the future of payment.


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