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Earning Money with Open Source Software?
Posted by
Soulskill
on Sun Jan 13, 2008 02:08 PM
from the sweat-of-my-brow dept.
from the sweat-of-my-brow dept.
An anonymous reader writes
"I've been working on a financial application which I've decided to release to the public. I want to make some money from the application, though I certainly don't expect to become a millionaire. The problem is that I'd like nothing better than to open-source it. There are many aspects of the application that I don't have time to refine, and other developers could definitely improve upon my work. However, I don't know how I earn money from something once I've made it open source. How have you dealt with trying to turn a reasonable profit on your work while remaining open-sourced?"
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Are you new here? (Score:5, Insightful)
FSF view on selling software [gnu.org]
Also: Software as a service
Finally, there is also consultancy for your own project. You need help installing it? You want a feature? Hand over the cash!
No, I haven't done it. Mainly because I'd rather not be my own boss. The payoff is high, but so are the risks. I'd rather be a wage-slave and let my boss bear the risks.
Re:Are you new here? (Score:5, Insightful)
Your question could be reduced to "I've invented a new hammer that works much better than old ones, but anyone can make a hammer just like it. How am I going to make money off my hammer?"
The answer is simple. USE your new hammer to build things instead of calling a halt to your problem solving career and trying to open a hammer store.
Parent
Re:Are you new here? (Score:5, Insightful)
If you can't find a single person out there who has a problem that needs solving and involves your new tool, your new tool is useless.
A tool is a means to achieve a goal, not a goal in itself. If there is no goal at the end of the train, then yes, your whole pyramid is built of meaningless crap.
Being that this is finances he's talking about, all of it is meaningless. The value of financial software is in how close to zero you can bring the time you spend working on it, because it's all administrative overhead and no productivity whatsoever.
Financial stuff gets stale fast as laws change, so I might suggest something along the lines of:
1) Give it away, and sell its advantages strongly far and wide
2) Make it update itself to the suit the latest legal/financial environment from central servers with new data, but only for paying customers
3) Create a business model around being "The guys who watch the laws and make sure our software still suits them."
In other words, don't trap them, empower them, and make money dealing with the ongoing bullshit that's closer to your skill set than their own.
Parent
Re:Are you new here? (Score:5, Informative)
Many here have noted that using OSS as a credibility-building towards consultancy or employment based around your domain knowledge is a common strategy. From observation (but not really personal experience) it is probably the one with the greatest likelihood of success - don't ever underestimate how useful it is to have somebody who knows the domain involved in non-business project roles such a software developer - and a clear history of building a useful piece of domain software is an excellent way to indicate that you know what the domain's issues are and can find ways to make useful solutions for them. The other methods (SaaS, package -OSS or otherwise, etc) offer the sometimes-enjoyable (and always-exhausting) possibilities of entrepreneurship - if that's your cup of tea, I'd seek out people who can complement your knowledge (not to harp on what I said above, but number one among these is a product placement person) in building a product or service around your efforts.
There are downsides to releasing your software as OSS - it can be forked or incoporated by those who already have products in the space, and unfortunately if the release itself is not carefully done, it can make you and your product look very amateur. If I happen to find a set of potentially cool domain libraries on sourceforge with no evidence of community interaction, no product description and no documentation, you can bet I'll move right along to the next product. To repeat what others have said, if you do opt for some sort of OSS-esque release, make sure to focus your efforts on community-building rather than just technical excellence: documentation, response to users/developers of your stuff, getting genuine domain users interested, etc. Or, if you want to focus on the technical parts, try to recruit someone else to do that stuff. Just remember that the community-building is what raises the profile of your software and thus your domain knowledge and skills, not really some badass recursion scheme.
Hope some of that helps.
Parent
Re:Are you new here? (Score:5, Funny)
And then the whole stack of dominoes will collapse like a house of cards. Checkmate!
Parent
Re:Are you new here? (Score:5, Insightful)
Produce a printed manual sell it from the main site.
Produce a lightweight but useful book and go into the software from more of a practical application standpoint than your standard manual/documentation, and sell it either dead tree or ebook format on the main site.
Ads on the main site.
Get a nice catchy logo for your project and arrange to sell logo'd tees, coffee mugs, etc... on your site. There are sites out there that will let you do this with little to no capital up front.
This one will be controversial here, but hey futz it... talk to some Indian support firms and see about possibly hiring them to offer support, which you then sell from the main site of the application, where you will serve as "level 2" tech support.
Most important of all, if you decide to do any of this, just freaking do it. Don't second guess yourself once you've decided. Move forward in total confidence, daily feeling/envisioning your goals attained.
Parent
Re:Are you new here? (Score:5, Interesting)
A better idea would be to approach large groups and get paid in advance to help them write tightly focused internal use manuals.
The #1 rule to making money, which everyone in the IT sector seems to forget, is this:
Demand payment upfront.
Parent
Re:Are you new here? (Score:5, Insightful)
I'd rather be a wage-slave and let my boss bear the risks.
I have always loved that illusion. What do you think happens to the people who work for a company that tanks (think Enron, Xerox, Auto-Manufacturers)? Their jobs and financial futures are not guaranteed. The truth is that we all shoulder some of the risk. The people at the top do not necessarily have more risk (and in fact most often, they have less).
InnerWeb
Parent
Re:Are you new here? (Score:5, Informative)
I posted this, because many people seem to equate "Free" (as in speech) software with "free" (as in beer, or gratis) Software. The FSF is clear on the issue, and as such the link was completely on topic. I can imagine that you release speciality software opensource. Your clients buy it, and get the source. A bit like a guarantee when you get run over from a bus. However, they have no intention to help their competition and as such won't give away the source to others. You yourself, only give away the source on demand... exactly as the GPL allows.
The GPL isn't as communist as many think. In a small market, it gives your customer certainty that the product can live on if you stop supporting it (Hire programmers, fork, 3rd party support), however they won't distribute themselves because it would give a competitor an advantage.
The comptetitor can get the source, but only if they become your client. As such, as a software provider you have won.
I can't be the only one except RMS to have understood that, really?
Parent
Learn from thes one who have succeeded (Score:5, Insightful)
I'd suggest you start a company, as you are more likely to be taken seriously by possible clients. And become 'the' company to go for support, customization, etc.
There must be products who have succeeded as a one man show but honestly I can't think of any.
Also, drop the 'I don't have time to refine' attitude. If you want to make money, you have time to do whatever your clients require, unless you just feel it's wrong for your product and refuse to do it altogether.
In short, if you really want to make money, your priorities have to be the ones of your clients', unless you are confident that what you feel like doing today is what someone else will feel like buying tomorrow.
By the way, is anyone using it already?
Re:Learn from movies who have succeeded (Score:5, Funny)
Also, drop the 'But they'll send me to Federal pound me in the ass prison' attitude.
Parent
Can you provide a service with the software (Score:5, Interesting)
The alternative approach seems to be in providing extended support serivces for the software as does Redhat.
Merchandising (Score:5, Funny)
Oh wait, that's musicians.
FOSS != Money unless you're willing to spend time (Score:5, Interesting)
If you think it'll be mildly popular, and you really want to OS it, throw up a paypal donation link. You may not get as much, but you'll be staying true to your scruples.
Your choice.
Podcasts on making money in open source (Score:5, Informative)
http://itc.conversationsnetwork.org/index.html [conversationsnetwork.org]
You may need to look around a little.
I have made money indirectly from open source. Basically I through it out there and some people picked it up. When they needed other projects worked on I was contacted.
Documentation is more important than code I can tell you that much. Installation documentation, user documentation and most importantly programmer documentation.
revamp all gui to be web-based (Score:5, Interesting)
Sell the .EXE files (Score:5, Interesting)
Try to separate your markets. If you give it free to people who would not buy it anyway, then your increase your visibility and your network effect. You might also get some patches back.
So put the source code online, maybe even try to get it in the Linux distributions for more visibility.
However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it. If they do compile it anyway then their time is worth less than $20 so they could not have afforded it anyway.
Sell Windows/Mac binaries, or Sell the Interface (Score:5, Insightful)
This is actually exactly what I was going to suggest. People running Linux are often either programmers themselves or interested in free/open source software. People running Mac OS and Windows, however, are obviously willing to trade money for the convenience of a point-and-click installer.
There's another option depending on how well you've defined a core/UI split--open-source the core engine, but charge for the GUI (or possibly for a web interface).
Parent
Re:Sell the .EXE files (Score:5, Insightful)
But won't someone just compile it and then give the
Parent
Ensure there is a demand for your software! (Score:5, Insightful)
I'm the author of LiarLiar [sf.net], an open source Voice Stress detector. Over the years, I've had several offers from various individuals and companies to further develop or improve upon the software. If you develop software that has enough demand, you may be able to offer support services for your software. Don't expect to get rich, or even be able to make a living for that matter.
The most important thing to keep in mind is, make sure you have a backup source of income. Either a job or something else, as it is unlikely that you will be able to make enough supporting an open source project, unless it becomes very popular.
sell a service on top (Score:5, Interesting)
I think the giving away something for free and selling a few enhancements is probably the easiest way to make money, much more so than consulting and support which directly takes up your time.
Nick
Making money w/ FOSS (Score:5, Interesting)
Once upon a time I was a completely unknown, but reasonably competent, software developer. I worked for a big mainframe maker. The software I worked on was proprietery and completely invisible.
Many suspected mainframes were all but history. I decided to learn to write for a different platform: PC, Unix. So, I bought a PC, taught myself C/C++. Now what? There was a open source project whose software I used. I felt it needed a big feature. The author wasn't interested in doing it, but was very helpful in getting me started on interfacing with it. I ended up writing a big plugin for it.
That piece of work gave me some personal visibility and credibility in the open source community, and a "portfolio". When the layoffs happened, because of my work on the project, I knew some folks at a shrinkwrap software company. My "portfolio", a demonstrated ability, got me a job with the shrinkwrap company. --- My old employer, the mainframe maker, spiraled down the bowl into oblivion.
The point of the story is that the software I wrote in the FOSS model didn't make any money for me, but it gave me, an introvert with little public persona, nor desire to have one, visibility and credibility to those who would hire me.
That may work for you too.
Several Choices (Score:5, Informative)
You've got several choices:
1) Sell Training
Write books, on-line training, seminars, whatever, and sell that as an adjunct to your open source project. Of course, those can be open source as well.
2) Sell Customizations
Offer to develop custom features or just consult on deployment. Some of those may be rolled in to a future version of the existing package if that makes sense.
3) Sell Support
Get people to buy support for the package and offer telephone/email support for issues. If the application is critical to a business, they may pay to have support on hand.
4) Sell access to the code under non-GPL license
Some applications are release GPL, but offer the option of paying to get a closed source commercial license.
5) Split the package in to open and commercial packages.
Bundle the basic system as open source and then have add-ons that are commercial. This is sort of getting them hooked on the free version and then hoping they grow in to needing the features of the add-ons.
Regardless of which method you pick, you should realize it takes a lot of work develop a successful community around a piece of open source software. If your plan is to just throw the code out under an open source license, you're likely to fail. You need to promote your product, develop a group of users, have forums/lists for them to communicate, encourage developers, review and work on submitted code, and you need to spend time participating in those activities. Even then if your product isn't unique and interesting enough you won't get a following. Bottom line is that you need to be really committed to your open source project and it had better be best of breed or users will move to alternate choices.
Value Earned is Experience & Recognition, Not (Score:5, Interesting)
For whatever reason, people often assume a false dichotomy between open sourcing code and making money. This isn't the case. A simple example of this is the ability to donate to any project on sourceforge. So a simple effortless option is to sign on to SourceForge [sourceforge.net], register your project and make yourself the sole dev. Then you just need to sit back and wait for all those donations to roll in!
Likely source of income? Not really.
So let me tell you something that happened to me. I had, in one of my classes, built an interface to GOCR (not Jack Black's band but the Gnu Optical Character Recognition project). This was a while ago. It was in C and it was shitty. I mean really shitty. I didn't even open source it. The teacher liked it though, maybe she still uses it, I don't know. Whoop de doo, right? I made a GUI to a command line tool.
Fast forward 2 years. I'm out of college and it's a bad market for developers. I show up for an interview with a company I had no idea was even into software. I show up in khakis and a button down shirt. Everyone else is in double breasted suits. I figure I'm screwed. But when I get into the interview, we started talking about open source and--wouldn't you know it--GOCR! The woman who interviewed me had used it on a project and started complaining about the command line. So I told her what I had done and talked about the algorithms and how it recognizes characters. I told her why my interface was so crappy. I got the job and I've been working there three years--they even allow me to do crazy research stuff at work!
Did I directly make money working on open source? No. But I think I got the job just on that conversation. I kinda wished I had checked in that interface as I'm sure it's lost somewhere on the university network now. What if she had actually used it?
I suggest you open source it, work with others to make it better, give it time to propagate. Then submit your resume to any place you want and list it on there. If you've made the Firefox of financial apps or prove you really understand how to design financial software, there's a lot of places you could go.
Parent
To Whom the Money Flows (Score:5, Informative)
I wouldn't bet my family's ability to eat on this. The problem isn't that there isn't money to be made on support. The problem is that a single person working his garage on software is not a support organization. Consequently, when it comes time to release that software, serious people (the kind with money) with a serious need for support (the kind they're going to bank their business on) won't trust a single individual for support. So your software will flow freely out, the support need may arise and support dollars may exist, but it's quite a gamble to assume they'll flow to you rather than to someone with a brand name and a committed resource of people that can stand behind a claim of support.
It's easy to want to believe you're going to get the money. But you are loads safer and much more likely to be right if you assume someone else will get it. You'd better assume you're going to get nothing and be satisfied with that. People may tell you otherwise, but I'd be surprised if they'd place money on that bet.
Advice, especially from evangelists, is cheap to offer when the one doing the offering doesn't have to deal with the consequences of being wrong. Don't let anyone convince you that doing something that is in the best interest of you and your own financial needs is some form of paranoia.
Of course, it's possible that the willingness of others to make free software has sufficiently driven down the price of software that there's no money you can make by selling it either. That's a different matter entirely. In that case, maybe you can sell service (supported by your own software, without releasing it), or maybe you just have something the world regards as worthless. That would be sad. But being sad would not make it impossible.
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