How do you make money from your free applications?
codejustin.com
codejustin.com
I strongly disagree with this. Consumers and companies still use money, they just use less and, importantly, use it differently. B2B markets are particularly interesting right now. There are thousands of companies looking to cut down on their IT spending, trying to locate better and cheaper options for their expensive solutions.
Make a cheap standardised Intranet to replace the corporate behemoth that costs thousands of dollars every year, make a helpdesk application that can cut down on support costs, offer a cheap hosted VOIP solution that saves on phone bills.
The possibilities are endless, and if you call up a company telling them that they can save money using your product they'll listen.
A couple of recent examples:
One company has a lot of clerical work but a hiring freeze. I automated their intranet-->fax function, freeing up enough time to get more work done with the same number of people.
Another company had to push out all of their purchase orders for the next 18 months because their revenue stream was slowing down. A nice little 3 week project for me.
Another company had planned on getting a new Oracle product for $500K until I showed them how to get the same output from their existing system for one fifth that amount. (Hopefully they'll have me do that work.)
Notice the pattern: slowing economy --> more IT work --> everybody happier.
Quit building little one-day hobby projects that don't do anything useful, and instead build software that people with money will pay for. It's not that difficult a concept to understand, yet every day you see another half dozen unjustifiable little web startups appearing with no hope of ever making money.
- Build something good.
- charge money for it.
- Sorted.S3stat pays my rent, and it took a weekend to build. It's dead boring, but there's a market for it so people pay money.
Blogabond is still fun to play with 4 years in, was technically hard when I built it, and thousands of people use it and love it. When I tried putting ads on it, it brought in maybe two bucks a day.
So yeah, boring stuff makes you money, even if it's not that difficult.
As a side note, my goodness please tell me you're putting more time and effort into S3Stat. I think you are seriously undervaluing it. Dressing it up with something prettier than webstats would, in my mind help you pay for a lot more than rent.
Good work.
Good to hear I'm doing my part to put a roof over the head of a fellow hacker ;]
Create a product. Charge a fair amount. Provide outstanding value.
It has worked for us. I'm no billionaire but I'm doing a hell of a lot better than 99% of the other 35 year-olds around me doing something I love and providing a product I can stand behind.
... but not link to in your profile? Sorry, but I'm curious about things people do that work out for them:-)
Also, yes and no. Sometimes the economics of these things don't work out to be quite so simple. Solaris is a great product in some ways, but it's not that much better (and in other ways is worse) than things that are available for free like Linux and *BSD.
In other words, it's important to find a niche where people aren't going to rush out and create free competitors...
Having said all that, I still disagree with your Solaris vs. open source argument in principal. You don't have to have a huge amount of customers to be doing well to me. If 95% of the people are using an open source product but you still have 5% clinging to you because they love it and you're profitable...is it really so terrible?
Of course, if you build a business, you want to be mutable anyway. You can't just sit around hoping product X will feed you and your employees without some sort of proactive business development. As part of that, you always have to be prepared for someone smarter and more agile. You play to your strengths. If you have market share, you leverage it. If you have agility, you leverage that instead.
Edit - One of the things that doesn't get discussed around here often enough, is the ability to form and execute as proper business. Your product is not (or more accurately perhaps, should not necessarily be) the entire definition of your business. Any business that expects to be around in the future must generate income. Competition is always going to be there in one form or another. If that competition happens to be people who like to work for free making open source products, it could be a mountain to climb to compete directly. The business may have to adapt in other ways.
I'll give an example of that. Everyone in our industry used to provide an embedded software component that required an OS that had a license associated with it. One of our competitors pitched an idea to build the same software using Linux. It very likely could have crippled us had they managed to deliver something at a much lower cost. So, we went through negotiations and tried to acquire them. Those negotiations failed but we realized that they really weren't close to that open source solution at all. We jumped at the chance to develop our own open source product and it is now in pilot locations. Nobody else in the industry has even blinked and we can suddenly cut some really outrageous costs out of our equation.
So, the beauty of open source, is that it's open to everyone.
Prior to 2000 IT industry was making large sums of money mainly from selling software. After the dot com bubble lots of companies selling software took a hit too. The bust wasn't limited to the web. Lots of customers realized they weren't getting the ROI from the software they purchased. Since then the industry fundamentally shifted.
The rise of open source software started to replace previously commercial software. In many respects were much better in quality than commercial software. Linux was making serious advances towards Microsoft's dominance in the server market. And, since then open source software has matured and has advanced rapidly into markets previously dominated by commercial software vendors. Once open source software options come into these markets they exert serious downward pressure on the ability for commercial companies to stay viable.
Take for example BEA. In early 2000's BEA was a market leader with it's Java application server. In fact BEA was the fastest growing software company ever, and I think that's still true. Over $1 Billion in sales in under 5 years. Amazing. Then JBoss showed up. In many respects JBoss' application server was superior to BEA's. Once JBoss came in they created serious pressure on BEA's ability to sell their server. Why purchase BEA when you can get a better server for free? In the end both companies were sold. Red hat bought JBoss for around $350-$400 million. Oracle snapped up BEA for $7 Billion.
Open source has proven itself as the best way to build software. However, it's the worst way to monetize it. Selling software works.
So, instead of risking alienating users with various money making schemes, I just give it away, and try to use torrent networks as much as possible to keep bandwidth costs down. I'll just be happy with high user numbers and the fun of writing the program (obj-c/mac), which is kind of why I started in the first place.
Basic utilities like ls, or jpeg which people expect to come with the platform are difficult to charge for. And then there is grey market software it may be that non-commercial distribution is not subject to the same degree of opposition that a commercial distributor would face.
You cannot find a better music service on the web, you cannot find worst communication strategy than they have (negative promo is better than positive promo, the first rule of pr!) and soon the press will be flooded by their success story.
http://www.last.fm/music/Mastodon/_/Divinations I want to listen to divinations, tell me the sequence of clicks for doing this on last.fm.
But it's up to the rights-holder to decide whether to license the music to Last.fm. It looks like this band has only a few playable tracks: http://www.last.fm/music/Mastodon/+charts?rangetype=week&...
Well, thats what my competitors do, anyway...Trust me, I wish them outlandish success.
Anyhow, I use free stuff as a friendcatcher for organic SEO, etc, and then turn rankings into money via paid apps. Also have a free trial, consider it a no brainer.
'The Economy' is a lousy excuse to not charge for it. Maybe you'll sell 20% less than in boom times, but you'll still sell if your product is good enough. Finish your product (includes documentation and marketing), put a price on it and start charging.
Guess what! 90% of the population doesn't care. If it solves a problem and is reasonably priced, then it's a no-brainer and they'll get their credit card out of their wallet. It's not extortion. It's about providing value and charging a fair price.
For desktop software, you can be nice and still charge money. Offer a free download and trial period. Or offer a free version with some limitations and an unlimited version for a price.
For online services, the same applies. Craigslist is free for almost everything except job ads. That works.
Gratis vs. Libre: that may just be the next big thing in the evolution of the Internet.
If you are employed to write software that solves a problem your company is willing to pay for, you receive money.
If you are self-employed to write software that solves a problem many people are willing to pay for, you receive money.
If you are self-employed to write software that doesn't solve problems, or solves problems people aren't willing to pay for, you will NOT receive money, and any means that you deploy to try and extract value out of people will be seen as a nuisance.
Free apps, especially online games, are like a street performer's music:
-they make you smile when it's good, and not look back if it's bad
-they're free
-you didn't plan for it, or travel far just to hear it, you likely happened upon it
-you may return to the street corner on your way home
-you will not return if you do not have time
-you will not return if the performer pestered you for money
-you may decide to tip the performer
-you will decide not to tip the performer if he seems dangerous, aggressive, or otherwise inquisitive about your private life
TO be fair, apps do these advantages:
-you don't have to physically return for a repeat experience
-24/7 performance
-very easy to spread by word-of-link
Use these to your strength, not to boost your ego to think that you are a "totally different" revenue model.
So how do street performers make money?
-receive donations
-not pester listeners for donations
-not being scary perv/stalker, or looking like one
-sell content not available for free
-sell content collected in a nice, convenient package/album
A lot of sites will list all the content they have, and when you click on certain ones, tell you that they are for "premium customers only". Why wait till the user clicks on it? To go back to my street-performer analogy, it's as if he asks if you'd like him to play you Pachelbel's Canon, and you say, yeah that'd be awesome, and he stretches out his hand. You feel deceived. You may pay out of guilt in real life, but in cyberspace, you just leave and go download the equivalent, from a well-reputed/professional/famous source, for free. Always tell the user this is paying content before wasting his time.
Anyone else?