Funding Yourself as a Free Software Developer
tyil.nl
tyil.nl
They let any open source project with at least 100 stars on GitHub join under their umbrella where they will act as a host organization so that you can start collecting donations (both one-off and recurring) and paying expenses without the headache of setting up a 501(c)(3) and a formal structure. You just add a bunch of trusted admins and you can manage expenses and invoices. Open Collective holds the money for you.
They’re built on open source code themselves and I’ve found then to be very responsive to newbie questions in their open Slack channel.
(We qualified under Open Collective’s open source software umbrella because the code for our ArchiveBot project has >100 stars on GitHub.)
Related in the sense that they address the question of "how can we reuse other people's code without reimplementing, in a way that's financially viable for the original authors?"
Opencollective is 10% + transaction costs IIRC while liberpay is only transaction costs. They're funded through their own platform.
It doesn't provide all the features of opencollective (like 501(c)(3)) though.
https://opencollective.com/faq (Fee info) https://liberapay.com/about/faq (Fee info)
I've attracted a couple of one off donations, but never been able to get anything consistent. I imagine it'd be terrifying to run a project with actual expenses to cover.
Convincing a sizable portion of consumers to even try free software--much less pay for it--is pretty much a lost cause. Consumers have made it abundantly clear they value convenience and "free" (as in gratis) over freedom, privacy, customizability, and any other ideal or benefit we can try to sell them on.
The best hope for consumers is for a set of profitable, high-quality, free business software companies to rise, and for some of those companies to devote money, dev time, ingenuity, and vision to solving consumer problems. You cannot take on proprietary software with ideals alone; you need resources.
Potentially, if you can leverage the benefits of free software to pay for some of the things you would usually have to manage yourself, then perhaps you can reach some kind of parity even if the vast majority of users do not pay money for the software. Mozilla currently pulls in relatively huge amounts of cash (hundreds of millions per year), but when they first started it was considerably smaller. Because they were able to concentrate on development rather than marketing and sales, they were able to get quite a lot done with that money. Where they did spend on marketing (for example the famous New York Times ad), they were quite careful about it.
There are other successful free software plays. For me the biggest example is Red Hat. When these kinds of conversations appear, I always point people toward Michael Tiemann's chapter in "Open Sources: Voices From the Open Source Revolution" [0]. Cygnus software went from $6K to being sold to Red Hat for $600M, and Red Hat went on to great success with essentially the same business model.
My favourite quote from that chapter, talking about discussing his ideas for a free software business model: "I never got farther than 'It's a great idea, but . . .,' when I had my second insight: if everybody thinks it's a great idea, it probably is, and if nobody thinks it will work, I'll have no competition!" Even now, I think there is virtually no competition in Red Hat's space because nobody thinks their business model will work.
In the end, I think that developing free software business models is where it has to go. You can't charge for the software. I personally feel that dual licensing is not really a free software business model because you don't actually make money from free software -- you are just using it as a loss leader for your traditional proprietary software. Like you imply, in the enterprise space you can probably do well (for example, by copying Red Hat, or by making a foundation like Mozilla or Apache). But there is a lot of other software out there. I think in those spaces you have to be a lot more creative about what you charge money for. People will clearly spend money -- just look at the horrible, horrible "free to play" game market. The trick is to allow them to do so in a non-horrible way ;-)
[0] - http://www.oreilly.com/openbook/opensources/book/tiemans.htm...
Now I'm curious; what else do they spend money on? Sales and marketing of course, but what else?
Depending on the area, the costs can swing wildly. I worked at Corel back when shrink wrapped software was a thing. Sales channels cost huge amounts of money. Even after that period getting your software into OEM builds cost a fortune. That's stuck in "costs of sales", usually. I've worked at companies where costs of sales was well over 50% of revenue. As you can imagine, there is considerable latitude for corruption ;-).
If you are running a service, "operations" often pays for compute infrastructure, but it depends entirely on the company. You might even have dev ops in operations so that can be misleading because you don't have a product without the service.
My experience has been that management, operations and sales takes 60-70% of revenue. The absolutely necessary expenses in operations usually amount to less than 10%. Capital expenses can be very large if they are investing in real estate or something similar, so that's a complete wild card. Sales and marketing are kind of linked because usually you have to spend more on one if you spend less on the other. How much you can get away with if you change the business model is kind of up in the air and I'm really speculating when I suggest that a free software model will be cheaper -- I believe it, but obviously have zero data.
It's worth downloading quarterly/year end reports from various high tech companies and reading them. It's pretty incredible how much information you can get from them. They won't break down everything exactly the way you want, but you can usually figure it out -- and often see pretty plainly where they are playing games.
Complete diversion: One of Corel's favourite tricks in the past (though not now, I think -- everything changed after they were sold) was to overfill the sales channel in first quarter. Basically they would "sell" the software to dealers, but would provide "refunds" for software that wasn't sold by the end of 4th quarter. So 1st quarter was always massively positive, while they were always massively (and somehow unexpectedly) in the red by 4th quarter. Executive stock options were granted 4th quarter and there was a trading window in second quarter. So the stock would plunge dramatically (one or two binary orders of magnitude) just before the stock options were granted and then rocket back up in time to sell them. They did that year after year after year (I was there for 5 years and it happened every time). The reason for the swings was literally written in the quarterly reports. In first quarter they would say "We sold $X, but this is subject to 4th quarter refunds". Then in fourth quarter they would say, "We experienced a one time loss from refunds in the sales channel". I swear nobody reads those quarterly reports... :-P
More or less OT, but maybe interesting: This was the strategy that killed West End Games (once one of the biggest publishers of pen & paper games). They would print as many books as they could and send them out to shops, but the shops had the option of sending them back when they couldn't sell them. Then in 1998 for some reason almost all of the books came back and WEG was bankrupt. Seems it worked far better for Corel. Not sure if this is good or bad.
The strategy that MS suggested Corel follow was to invest the $130M in acquiring companies (which is how they ended up with Paint). Now here's the fun part: MS's preferred shares were non-voting, but they had a veto on acquisitions ("Just so that we can protect our investment. Trust us, we'll never use it! We're the ones telling you to acquire companies, aren't we?"). MS, then turned around and sold their shares to a VC company called Vector (part owned by Paul Allen).
After buying the shares, Vector said, "We're putting a veto on all of those acquisitions. Oh... the penalty clauses will make you bankrupt? So sad for you... We're happy to buy your entire company and turn it private. If you don't agree, then I guess you are out of business."
So Vector managed to buy up Corel for (IIRC) somewhere around $110M. At the time Corel still had something like $90M in the bank, so Vector paid $20M plus the $13 million form their initial purchase from MS. They managed to do the acquisitions and then resell them. After a year, they made a new public offering of shares for 25% of the company for somewhere around $40M (these numbers may be wrong as they are coming from my aging memory, but they are illustrative of what went down if not accurate) -- giving them a pretty awesome ROI in just one year.
All of the senior Corel executives (including the CEO and VPs) somehow managed to land jobs as "senior product managers" at MS. Some of them seemed to turn down their lucrative parachutes from Corel to accept the job, so... I guess they were given handsome signing bonuses...
It shouldn't surprise me, but once you get above a certain level it stops being about making a product or doing a service and becomes all about making money. The companies are just a vehicle for that pursuit and in a lot of ways I think the "power people" don't care that much if the company survives or dies. They just care where the money falls.
On the other hand, I don't quite know where I stand on accepting donations for writing free software. I feel like it leads to perverse incentives for maintainers and contributors alike.
My feeling here is that the best way to earn a living off of OSS is writing books about it, selling support, speaking engagements, etc. Someday I would like to earn a living from writing OSS, but I'm not super-inclined to do these other things either. That really just leaves working for a company like RedHat, and drawing a salary to write OSS. That just means your work isn't self-directed anymore.
What I'd really like to see happen, if it hasn't happened already, is a funding platform that only accepts donations from "qualified donors" and funds a small, curated list of projects/people and anonymizes whose funding goes to what projects/people. Projects/People are selected by a mix of donor votes, community votes and some equivalent of PageRank. Funding allocation is split up the same way, trying to divert the most money to the highest-impact people & projects.
Not that I have the slightest inclination that anyone would want to use this :(
Any stakeholder gets to participate, including the people/projects being funded.
(Obviously you want that agreement in writing, but start by just getting conversations with users who would be qualified for this. Anybof your users with 50+ employees could be good candidates.)
Even professionally, shops with good admins/devops will usually prefer CentOS/openSUSE over RHEL/SLES, since they can handle almost all the support themselves.
The other model is tools like Gitlab/Alfresco/Magento where the enterprise version has closed source code not available in the OSS version.
I wrote a thing about different OSS support philosophies a while back:
http://penguindreams.org/blog/the-philosophy-of-open-source-...
And shops with large enough IT budgets and huge downside risk (like finance) will pay for the SLA guarantee because ultimately it's really cheap insurance against the cost of catastrophic events.
I've been in banks where the admins were the definitive authors of books written in their space, but where CentOS or RHEL on a server was chosen purely on the basis of the value of the service being hosted.
There's also an example of software which clearly doesn't wish to follow such scheme: IDA Pro.
So basically, yeah, just Joe the accountant from your local strip mall.
For example, in Spain you aren't allowed to extend invoices if you aren't first registered as an autonomous worker (freelancer), which most people aren't because they already work for some company. But even if you did, then you'd have to pay for the obligatory social security for freelancers, which is around 260 Euro per month (so staying registered indefinitely as freelancer is not financially sensible, if you are not really doing actual contract jobs).
I would think this is similar in most other European countries, which in other words means that for the most common of the FOSS developers, writing a legally valid invoice is a no-no.
Of course the matter changes if the company doing the donations doesn't really care about the invoice being legally correct inside the country of the developer. But I wouldn't advise the developer to do things like that... (s)he would be risking a fine.
Of course we could say that "this will never actually happen", but if the company had to pass a tax inspection, they would have to prove all their expenses by showing the corresponding invoices. And this would show that the developer has been generating irregular invoices.
I don't know for bigger companies, but as a (proper) autonomous worker in Spain, I had worked for just 1.5 years and already was asked once to prove some expenses with the corresponding invoices.
Not a single company could pay such an invoice.
(Germany, but pretty sure this applies in most of Europe)
If you can read spanish, articles such as this one explain the options: http://gestron.es/ventajas-ser-autonomo-trabajar-cuenta-ajen...
I suspect that if you started getting any reasonable quantity of donations that would also pique the taxman's interest.
(Fortunately the paperwork is very minimal: Basically, you add an extra one page form to your annual income tax return.)
"The single biggest piece of advice I have for you: if you have someone’s email address (+ permission) you have an earned relationship. If you have to beg a platform to contact them, the platform owns the relationship. Get the email.
Youtube subscribers, Twitter followers, Facebook fans, and all analogous relationships are not defensible assets in the way that someone expecting mail from you is. They’re dependent on the week-to-week policies and quarter-to-quarter strategic imperatives of the platform.
The platforms offer incredible reach! Incredible! Reach! And the bargain they offer is Faustian. Platforms need their creators to bake the cake; they then propose allocating 60~80%+ to them as an opening bid, do not contractualize that (for smaller creators), and smile.
“What do you mean they do not contractualize that?”
I mean that you have neither a contract nor even an understanding among equals that the terms you currently enjoy are the ones you will have in the future. Businesses sign contracts with vendors important to them.
Do you remember the contract negotiation? No, because doesn’t work at scale but also because You Are Not One Of Their Important Accounts.
Any term you think you’re entitled to is going to be renegotiated by Darth Vader: “I have altered the deal; pray I do not alter it further.”
So back to the question of building your own platform:
You want your own place on the Internet; I think that is, for most people, a website.
You need, need, need an email list. Software for them is cheap to get started with.
Above all things: “As an independent creator, I will comport all my conduct on other people’s platforms with the intentional, strategic goal of enticing some portion of the audience to join me on my platform, where the lion’s share of value I produce is, and where I make meaningful money.”
https://wiki.snowdrift.coop/market-research/other-crowdfundi... and https://wiki.snowdrift.coop/market-research/history/software give you an idea on the other funding options out there.
I eventually stopped when I realised I could have just bought Logic whilst spending the same amount.
I am impressed that others would continue though, that's for certain. I remember it being very useful on Linux (along with RoseGarden and Muse, back in the day).
Suggestion would be to darken the font some.
I haven't had any people saying they had any issues with the looks of the site, but I have updated the main font color to be black. I'll look into more improvements after I get the article updated.
Lemonade Stand: A handy guide to financial support for open source https://github.com/nayafia/lemonade-stand
Even as an individual, I don't know why I haven't set up donations on my github projects. Some of them have several stars, and you never know who will buy you a beer or a coffee.
More financial support to free software development would certainly be appreciated. Even a single cent just to show the developer you enjoy his software is a good incentive for a developer to keep going. It seems like most feedback developers get is negative, so anything positive is appreciated.
- Consulting. You need clear message what you offer and how you can help. Also clear way how consulting process works. Companies are happy to pay extra, if they get author.
- Paypal donations, put 'Donate!' button on website, prefil some amount and offer recuring payments. Paypal even handles credit card.
- Crypto coin donations. Setup wallets and put addresses on web.
- T-Shirts or books for premium price.
The source code is still available for anyone to freely download and use. Businesses are free to install and evaluate the software for as long as they like (there are no onerous checks to verify you have purchased a license). While some businesses won't pay, many will.
In fact, a self-hosted solution would probably appeal to many businesses over a SaaS-style per-employee pricing model.
What's stopping open source projects from trying this approach?
Because a license which requires that is not an open source license. It might be a source-available, free-for-non-commercial use license, but that's not the same thing.
Further, if using a copyleft upstream license, this would be prohibited by the upstream license.
[0]: https://dramatiq.io
The problem is this is against one of the criteria for a license to be approved by the Open Source Initiative, which states that the users are all treated equal regardless of the purpose for which they use the software, so you can't claim to be Open Source if you discriminate against businesses like this.
I was actually contemplating to use LicenseZero for AutoSpotting, my largest and most successful project that can save companies a lot of money, but I'm afraid this will discourage users and would slow down contributions.
So far I am playing with a dual license model somewhat similar to the way Redhat handles RHEL and Fedora. The software is open source under the MIT license, and anyone can use it from source if they are willing to compile it themselves.
In addition I am now offering evaluation nightly builds that expire after two months, and I am selling for a relatively small fee stable and well tested builds that I verified to be working well. I am also only actively offering support and trying to fix issues for these stable builds, the other builds are supported by the community on a best effort basis.
So far very few people were interested in the official builds, but the first evaluation builds will start to expire within a few days so I expect the number to grow.
Here's an article I published on why funding open source is difficult: https://medium.com/@codesponsor/why-funding-open-source-is-h...
Didn't think too much of it and came back here and saw the news :( That's too bad Github decided against continuing the service, it's such a great way for developers to maintain their roles and still provide a bit of funding. Good luck on your next version!
Even in the world of the free uber-cyberpunk hacker, why is reCaptcha considered a warning sign?
I don't agree with it, but I understand it, especially if you have bad feelings about google.
If they were doing it for a public library or releasing the text as public domain, that would be a public good. As it stands, it's just doing free work for an advertising company.
Considering reCaptcha has some tasks that look suspiciously like "help train who-knows-whose neural net to identify the bombing targets in this satellite image," it could also be an ethical choice for some people.
Google reCaptcha's are also incredibly annoying compared to standard captchas, which would be a good reason for people to want to stay away from it.
A service requiring you to interact with Google software in order to use it, is pretty much a surefire way to find out that you and the service provider are not on the same page about the value of your privacy or at the very least that the service provider does not understand the privacy implications, which doesn't help your privacy.
There's the odd chance that the service provider has actually researched about the specific Google software that they're using and that it's somehow actually not privacy-invading, or that the service provider has a contract with Google to protect your privacy, but chances for both of those are really low.
I have experience with commercial open source but I am not sure how well that translates to development tools like compilers/debuggers/profilers.
If you are trying to get money from people for your labor, stop using the word donations. People see that as charity, not as money for services rendered.
Second, you can create a tip jar with Pay Pal. That has performed better for me than Pay Pal donate buttons. Info:
http://independentdigitalworkers.blogspot.com/2017/11/how-to...
There are lots of different ways to talk about this.
I straight up had someone tell me I was "panhandling the internet" to have donate buttons on my site when I was homeless. At that time, people would give me money and leave notes "Here, have something to eat." They very clearly did not see it as paying me for the value of my work. It was charity in their eyes.
All that stopped when I switched to a tip jar and my take went up.
YMMV, of course. But it ended up being an informative experiment.
I like having Patreon plus a tip jar. Patreon is for on going support. A tip jar lets people leave a one time payment.
With the 10 starts threshold only regular users get the dialog and if they don't like it, they can uncheck a box and never see it again.
On average, I get one donation for every 1000 downloads which appears to be a relatively good rate.
does liberapay/patreon makes sense? I've never bothered with a donate button because people have said they don't work, but do people specifically donate because of the patreon brand?
That type of phrasing can also be used sarcastically or meanly, so people may have interpreted it that way. "Why can't you do this? Just make it work!"
But the original comment might also wrongly come from the perspective that a given developer ought to tie themselves to a particular project by creating a business around it. Many projects are created and/or maintained by developers working on a broad number of projects, so total productivity might decrease if developers were settle down with only one or two projects which they're able to build a business around.