
Open Source Doesn’t Make Money Because It Isn’t Designed to Make Money - collinmanderson
http://www.ianbicking.org/blog/2019/03/open-source-doesnt-make-money-by-design.html
======
mythz
Its commoditized the cost to use software to near zero which has created a lot
of unprecedented value and products that wouldn't be possible before OSS.

Unfortunately most of the wealth created by OSS is being reaped by the large
cloud vendors because relatively no-one pays for OSS but they do to host their
production systems on it, atm this revenue goes directly to the major tech
cloud companies which are using it to build out their multi-billion dollar
infrastructure moats, ensuring a barrier to entry no other will be able to
partake in.

This is why cloud vendors have become so "OSS friendly" \- they love the
status quo as they've become the primary beneficiaries from everyone
developing and distributing OSS for free as long as they're able to collect
the rent when it gets hosted in the end.

You're starting to see the conflicts as more companies like Redis Labs,
Elastic, Confluent and MongoDB who realize this and start distributing their
future investments under "OSS free that's free for everyone else but can't be
used commercially by cloud vendors" as a way to force licensing so Cloud
vendors are unable to use their own investments to compete against them - and
force some revenue share back from when Customers pay for OSS, when they host
it.

So when you hear how much cloud companies "love OSS" and how their initiatives
like "Open Distro for Elasticsearch" is to ensure it stays open, know that
they're not doing it out of altruism, it's to repackage Elastic's OSS
investments and make it available for free so they can be hosted on AWS
without having to host with Elastic, it effectively lets them avoid licensing
and revenue sharing back to the companies who've invested their time and
resources into developing it.

~~~
jjeaff
I think you are mostly right, but I don't think the major cloud providers have
much of an uncrossable moat. Cloud services are and will continue to become
more and more commoditized.

Sure, there is proprietary lock-in. But because of OSS, it is also becoming
easy to avoid the lock-in. For example, rather than use a hosted elastic
service, I was able to launch an elastic stack on k8s in less than an hour of
configuration. It's able to scale up and down in the cluster and do everything
I need. So if I need to easily change providers, all I need is someone who
offers hosted k8s (or any provider if I decide to self manage down the line).
We are in the process of doing the same with our DB and will migrate from a
hosted Aurora instance.

It looks like ovh is now offering managed k8s. DO just launched theirs,
countless others have as well or are about to.

I am running on gke right now because it was easiest. But there will be little
keeping me from migrating down the road since k8s + helm + a few other tools
are making it easier and easier to launch your own services.

I imagine if it doesn't exist yet, someone will create a nifty little tool to
connect up two separate k8s clusters and seemlessly migrate everything over.
There are few barriers to keep that from happening.

~~~
mythz
Once you have your production systems running on a cloud vendor it becomes
increasingly difficult to move off it regardless if you're only using OSS
components, there's an inherent risk with every migration that grows the more
services you use and years you host on it that needs to be offset with any
migration and given the major cloud vendors are comparatively priced, there's
little incentive to invest their time and energy doing that instead of
focusing on their core business.

The small players will always stay niche, a cloud is effectively a network
monopoly (like iOS and Android) with most companies only wanting to invest in
the cloud that's going to have everything they need when they need it, they'll
still offer proprietary services to differentiate against the other 2 cloud
vendors and additional way to lock you in and make it harder to migrate away.

You could choose to build out your system to be completely cloud agnostic but
that is generally regarded to be economically irresponsible in itself
preventing you from leveraging the best features available in each cloud.

~~~
phoe-krk
_...but that is generally regarded to be economically irresponsible in itself
preventing you from leveraging the best features available in each cloud._

This is only true as long as the costs of maintaining a cloud provider
abstraction layer are greater than the costs of being locked in to a single
vendor. I believe that some businesses, once they are armed with an
abstraction toolkit like this, will be able to employ arbitrage between the
cloud vendors for themselves, and sell that toolkit to other companies who
want the same kind of freedom.

And then somebody creates a free software alternative, and will maintain it
and keep it up to date.

~~~
SpicyLemonZest
The problem of leaky abstractions can't be solved by slapping yet another
abstraction on top. The best case is that you become locked into your cloud
provider abstraction layer instead of the cloud providers themselves - and
then what stops them from becoming just as monopolistic?

~~~
chii
> locked into your cloud provider abstraction layer instead of the cloud
> providers themselves

but the assumption is that this layer is free (due to OSS), and the "owners"
of this layer cannot pull the carpet under you by raising prices.

------
jaabe
I think you can make money on Open Source, but I think you need partners to do
so. I work for a Danish municipality that is a member of a municipality driven
open source community called OS2. We’re around 60 members, and we’ve recently
won a national award for tech-reuse issued by our ministry of digitisation and
around 10 interest groups.

We don’t build the code ourselves. We do own, review and manage the code. We
handle the project management and we facilitate access to our business
processes and employees, but the actual development is something we buy.

Once things get build we often end up buying the various projects as SAAS
solutions because we aren’t really geared to operate OS techs. We do have
excellent federated authentication, network security and API services, but we
genuinely don’t want to operate a horde of different tech stacks. This makes
us a perfect match for anyone who knows how to do SAAS in the cloud though,
and most of the things we build end up being run in Azure or AWS by a
supplier.

So far it’s been a really beneficial relationship. We get ownership, better
quality and faster more agile development. Our local development houses still
make money, both from development but also from SAAS.

It has been especially good for our smaller dev houses, because a system isn’t
locked down to a single supplier for years.

This last bit is entirely my personal opinion, but I prefer buying software
from a local shop and helping them build and expand their businesses. On the
plus side of this, they co-operate a lot better too. Municipalities are trying
partners who can’t make up our minds, and a small agile shop who doesn’t point
to the 4 year old contract every time you want a tiny change, has just been so
refreshing.

~~~
amenod
> I think you can make money on Open Source

> We don’t build the code ourselves.

Ha, ha, well put. That much everyone agrees on, and Amazon especially so. :)

The question is: can you make money as the _developer of OSS_?

~~~
funkymike
> The question is: can you make money as the developer of OSS?

Contributors to OSS are giving away their time and energy. That seems to be at
the core of open source. I'm not going to demand you pay for what I produce -
I'm going to give it to you for free with minimal restrictions in the belief
that I will also benefit from others doing the same.

It seems to me that asking how to make money by giving away one's work doesn't
really make sense. If you value it highly enough to think you should be paid,
then why give the work away for free in the first place. No one picks up trash
from the side of the road motivated by cleaning up their community then asks
how they can get paid for it after the fact. Either you are motivated to give
away your time and energy; or you really want a paid job, but one where you
feel like you are giving back to society more meaningfully than just helping a
company make more money.

~~~
abdullahkhalids
You have completely sidestepped the most important part of the debate. There
are very nice people who are doing the majority of the work to clean the
street out of the goodness of their heart. Then the garbage company, who does
a minority of the cleaning, is getting paid for both its work and the
volunteers' work.

The volunteers will be happy if either no one ever gets paid for their work,
or they do. In no scenario is it acceptable that someone else gets paid for
their work, especially at the level of a significant percentage of the world
GDP. This is just basic human psychology - no one will ever be okay with
someone else getting the recognition for their work. Nothing much to do with
open source particularly.

------
csallen
_> You can’t make a living making music. Or art. You can’t even make a living
taking care of children._

First, this isn't true. Plenty of people make a living doing each of the
above.

(Art is _somewhat_ of a special case, because some will say that what you're
doing isn't art by definition if it's attached to some functional purpose like
a business model. But you don't have to listen to those people.)

Second, these things aren't cheap because they're not valuable. Water is
cheap. Water is also necessary to life. It's immensely valuable. What makes it
cheap is that it's easy to provide, so competition drives prices down. People
aren't going to pay a lot of money to get something valuable if they can pay
less to get the same value elsewhere. Value isn't the only thing that matters
when determining price.

 _> There are dozens (hundreds?) of successful open source projects that have
tried to become even just modest commercial enterprises, some very seriously.
Results aren’t great._

Are results much better for normal people trying to start businesses that
aren't based on open-source code? I'm not convinced they are. Businesses are
hard.

~~~
SkyPuncher
I think a more apt description would be "You can't PLAN to make a living
making music".

Certainly, lots of people successfully make a living with music, arts, sports,
etc. However, there's a lot out of the individual's control in those fields.

~~~
ken
You can't plan to be the next Beatles (just as you can't plan to be the next
Microsoft), but you can absolutely plan to make a living in the arts (just as
you can plan to make a living in software).

When people look at a field from the outside, they only see the celebrities,
but this is a completely unrepresentative sample. As Phil Greenspun once put
it, "I can't decide if I want to be a scientist like James Watson, a musician
like Britney Spears, or an actor like Harrison Ford."

~~~
JakeTheAndroid
You can make money _in_ music, but it's very difficult to make money _making_
music, which I think is essentially the same analogy here.

A band I love called Periphery is fairly popular, they do global tours etc.
They have been very vocal that the band itself generates no revenue. They are
happy to break even because they love making music. Instead they use their
influence to extend their brand, such as pedals, pickups, clothing brands,
etc. They absolutely make money _in_ music, but they don't make money _making_
the music.

You can make money in Open Source, but you're unlikely to make money
developing of Open Source. But, if you do contribute or maintain OSS, then you
can likely get a job at any of the million companies that need a dev. So
you're still making money and you're still in OSS, but they are separate.

I think that was the point OP was making here. Someone makes money on art, but
the actual creation of that art isn't likely being paid out to the creator,
just all the components that bring it to the consumer.

------
pjc50
This is a very clear articulation of the common problems here.

Intellectual property can only make money by _preventing_ its use, otherwise
it just spreads everywhere to everyone for free. Given this property of the
Internet, _and_ the decision of open source/Free Software to embrace rather
than fight this property, what side-channels can be constructed to return some
value to the developers?

> Anything paired with a physical device. People will judge the value based on
> the hardware and software experience together.

Not just embedded, but also SaaS. The fact that the physical device is off in
a datacenter somewhere isn't so relevant. (Another implication of this is that
open hardware will never behave quite like open software!)

~~~
simonh
This is precisely the thing, some things are valuable precisely because they
are free and ubiquitous.

It's a form of value that can't be measured directly in $. If you can measure
it in $ at all, you can only do it indirectly, in the form of charges for
services and ancillary products.

There are no guarantees that's always feasible though. There's a threshold
beyond which the cost of harvesting the value is higher than the value itself.

~~~
notduncansmith
It seems like a tragedy of the commons situation, which we have been able to
fix in other instances with organized funding. We've seen some organizations
spring up around funding open source projects, but if e.g. the US government
authorized federal grant funding for open source projects, I think it would
set an example for industry (and other governments) across the world.

The challenge is getting historically scarcity-mindset institutions to
recognize the value of letting the rising tide of free information lift every
ship in the world. They don't like this on its face because they have divided
the world into "us" and "not us" and open source provides more utility (in
aggregate) to "not us" than to any "us" defined as narrowly as a single
company or country. Until Big Finance, Big Pharma, Big Food, Big
Manufacturing, and Big Government embrace a broader definition of "us" beyond
their own conglomerates, they will continue to see open source as a threat.

This gets at a broader cultural movement toward abundance, that in the US has
strong roots in coastal western cities like LA, SF, and Portland, and strong
opponents in the Midwest, South, and East. If the US federal government were
to invest heavily in open source, it would send a message to the rest of the
country that we are now in an age of abundance, where we recognize the value
of lifting all ships, because we know that our strength is in the strength of
all of us, not the strength of our few strongest players. It would signal a
cultural shift toward collaborative ownership and, I believe, spur investment
in many commons.

It's difficult to speak the truth of this mindset to power, because incumbents
recognize that there are real competitive threats. The hope is that
governments will recognize that there are far fewer threats in a world where
people have the basics covered, and companies will recognize that defining and
advancing the state of the art makes you look pretty good to the best talent
and best customers.

~~~
simonh
I think tragedy of the commons isn’t really a problem for the development
side, though I think I get what you mean, but it comes in the form of
excessive fragmentation of the ecosystem. Do we really need dozens of Linux
distros when most of them are really just tweaks and could easily be packages
on other distros? Do we really need all the little incompatible changes, new
UI shells, multiple marketplace stores and multiple messaging clients and
crapware on Android OEM phones? I think that’s a very different problem
though.

Plenty of big companies absolutely get open source and leverage it to great
effect. Not just in an abusive way (although how is simply exercising a right
in Libre terms abusive?), but also to mutual advantage. Plenty of big
companies contribute significantly to open source, but where it genuinely
serves a need.

The fact is sometimes you need to invest more into creating software than you
could ever capture via an OS business model, even indirectly. Plenty of
software products cost millions of $ to develop, are needed in short time
scales, require massive input from highly skilled non-programmers and there
are people who will pay well to get it. Open source models are not well
adapted to that sort of requirement.

~~~
pferde
"Do we really need all the little incompatible changes, new UI shells,
multiple marketplace stores and multiple messaging clients and crapware on
Android OEM phones?"

Yes, we do. If different people did not try doing new things (or just old
things done differently), there wouldn't be as much progress, and we would all
be poorer for it. Sure, some things stick, some don't, but that's how it's
supposed to be.

~~~
simonh
The problem is the motivation of most of these differences is not improvement
but just differentiation. They are literally only different for the sake of
being different, for marketing purposes.

------
krupan
It feels to me like there was a lot of social pressure over the last 10 years
or so for open source projects to use the most permissive open source license
they could. You were cool and "more free" if you used Apache, BSD, or MIT
licenses. I wonder if this is coming back to bite us now. Red Hat built a very
successful business selling mostly GPL software. Would things be different for
the companies we've been talking about lately (mongo, redis, elastisearch,
etc.) if they had gone with a GPL license and a Red Hat-like business model
from the start?

~~~
boomboomsubban
This doesn't make sense. What additional revenue would the GPL provide for
you? How would a copyleft license end up requiring additional support
contracts? Your other comment lists a range of things Redhat offers in
addition to support, but none of those things rely on the GPL.

~~~
zanny
Qt exists as a business today because of its use of the GPL - enterprise
customers can't ship the free version of Qt with proprietary software when its
statically linked (as are all? Qt programs on Windows). PyQt works the same
way, its an independent business run on selling proprietary licenses to
distribute derivative binaries without source in exchange for money.

For a lot of business denying their users software freedoms are a value add
for them because of the power it gives them to demand payment. They will, in
turn, pay back for GPL code to get that ability. If it enables the further
development of free software, its probably a net win.

~~~
Crinus
Qt programs on Windows are not statically linked, i have a bunch of them
(including some commercial) and none link to Qt statically. Also Qt is
licensed under LGPL, not GPL.

Qt used to be licensed under GPL but changed that to LGPL for version 4.
Incidentally this was around when Qt switched its focus from QtWidgets to
QtQuick.

------
rburhum
I think doing the argument of "open source vs business focused" is incorrect.
I would just make the comparison of "business focused vs not business
focused". If it is open source or not, that is just a detail of the business
strategy.

One of the main problem that we technologist fail at is that a lot of the
times we assume technology == product. When we do this, we completely overlook
all the necessary infrastructure and processes that we need to have in place
to capture the value that the technology provides. We need customer success to
guide the customer through a continuous successful implementation, marketing
to very clearly articulate value propositions that change in different
verticals, a sales team to capture the value and turn it into dollars
consistently, support to listen to the customer when things go wrong and hold
their hand through the fixes or workaround, lawyers to prepare support
contracts and cover procurement requirements, hr, etc etc. I could go on
forever.

I disagree that there are not examples of companies that show how to make
money from open source. Beyond the obvious examples like "RedHat is a public
company" and "MySQL sold to Sun", I can think of an absurd amount of
businesses whose secret sauce is ElasticSearch. I would argue, that even
though Elastic is a public company, they have not been capturing all the value
they have brought. Although there are consulting companies like EnterpriseDB
and CitusDB around projects like PostgreSQL, thinking that "consulting" is the
one and only business model around monetizing an open source database is a
gross over simplification that glosses over models that are evolving in
various other areas, for example the one Jetbrains is doing with IntelliJ
(basically a subscription service now).

I can look at the current top 100 posts of HNs and point out quite a few of
successful businesses that would not have been where they are right now
without open source existing in its current form.

~~~
hodgesrm
I was going to write this comment but you did it already. ;)

Another common criticism of OSS goes along the lines of "it does not monetize
value fully." In other words it creates value but the authors don't collect on
it completely.

However, the same statement is true of proprietary software. Anybody who has
sold proprietary products knows that what you recover is a fraction of the
cost of your users doing it themselves. It might be a bigger fraction than OSS
but not always--maybe you don't even get the sale in the first place because
users are afraid of lock-in.

It's therefore quite misleading to think in terms of different economic models
for OSS and proprietary-based businesses. There are more points in common than
differences.

~~~
aidenn0
The problem is that the "cost of doing it themselves" for OSS is downloading
and building your source, whereas for proprietary software, it's the cost of
writing it.

~~~
hodgesrm
It really depends on the software in question. I work on DBMS. The cost of
doing it yourself is potentially much higher than your comment indicates:

* Time-to-market -- Rework due to mistakes when implementing or deploying applications

* Risk -- Fixing problems may take [much] longer than for supported software

* Resources -- Extra personnel to do software support and maintenance. This gets a lot more painful once software is long in the tooth and no longer cool to work on.

None of these have anything to do with OSS in particular. And for many people
the costs are outweighed by benefits like understanding the technology stack
and not being in thrall to costs they can't control.

In a similar vein I used to fix cars myself. I now take them to the mechanic
even though for many problems I could do a better job albeit at a high cost of
time, parts, and tools. It's cheaper to focus on work that I'm good at. I
still miss car mechanics though.

~~~
aidenn0
All of those costs are orthogonal to OSS vs proprietary software. For example,
there is commercially supported OSS software and completely unsupported
proprietary software.

------
anigbrowl
The downside of this is that OSS can only be produced by people who have a
sufficient degree of financial security. No matter how useful a given piece of
OSS is, if the creator is not financially secure they're required to either
beg for money, or beg for a job.

Isn't it odd that a piece of software, could be widely deployed, forked,
starred on Github etc. etc. and yet with all this infrastructure there is no
mechanism to ensure that any money finds its way back to the creators unless
they ask for it? Some kinds of business people praise the selfless creativity
of the open source community while simultaneously conserving their own profits
and often denouncing taxation as theft. When challenged, such people attribute
all human progress to the profit motive, and thereby in part to themselves, in
manifest disregard of the facts. Creative people don't like this but they need
to eat and keep a roof over their head, which requires money.

On the one hand, creative people with a mindset of mutual aid and consequent
abundance, whose genius expands and structures much of our economy. On the
other, well-resourced people who preach a gospel of scarcity and
systematically give less than they take. These same people denounce any
interference in their profit-making, and choke the unfortunate with
externalities because they refuse to bear the cost of cleaning up their own
waste, often going so far as to deceive the public about its existence.

How are open source creators any different from blacksmiths, forging the very
chains and weapons which bind and oppress them? How much life must be given
away, how much filth heaped on heads, before creators will unstop their ears
to the laughter of those who exploit and rule over them, mocking their
generous spirits and diligent efforts?

~~~
int_19h
It would certainly be interesting to have some form of voluntary micropayments
integrated with GitHub. Or, say, bounties for issues and feature requests,
where multiple visitors can add their 2c into a shared pot (although that
requires moderation to verify the result).

~~~
krageon
Bounties exist, but because of the reality of development in the OSS space
they're not really something you want to lean on for financial security. Pull
requests frequently can take a _really_ long time (months) to be accepted, if
they're even accepted at all. The bigger projects are the worst offenders in
this in my experience (sadly those are also the most likely projects to have
bounties). Very large bounties (for work spanning months) paradoxically become
the least attractive because of this, because if your pull request doesn't get
accepted in that case you've just thrown months of work into the toilet.

------
oweqruiowe
It recently dawned on me, in light of the Elastic / AWS battle, that Elastic's
business model is kind of like GGG's 'free to play' game Path of Exile. Where
the base game is free, but as you get more serious you end up spending money
on quality of life things, stash tab upgrades and what not. That business
model has proven to be very successful (in gaming), versus the buy once model
with games like Diablo. Hopefully, by sharing that here doesn't result in a
'gray-at-the-bottom-comment'.

~~~
clarry
You mean games like Diablo weren't very successful?

~~~
sanxiyn
Freemium model is vastly more profitable. There is a reason every game company
is switching to it.

~~~
nostrademons
For some numbers - Diablo 3 was one of the best-selling AAA titles with 12
million copies sold in its first year, about 30 million within the first 3
years. The entire Civilization franchise has sold about 40 million copies -
Civ 5 & 6 each sold about 8 million copies. At $50/copy, that's about $200M
per game, ranging up to about $1.5B for a bestseller over multiple years.

By comparison, Wargaming (a mid-level F2P publisher of World of Tanks, World
of Warships, and World of Warplanes) made about $600M in 2015. Fortnite (a
bestselling F2P phenomena) made $2.4B in 2018. Pokemon Go (also a huge fad,
but one now passe) made about $795M in 2018, and roughly $2B since launch.

The playerbase for these F2P games is more than an order of magnitude bigger
than traditional AAA titles, so even though a large percentage players never
pay, they still pull in roughly 2-4x what the traditional business model does.

(This is also what's driving the sky-high valuations of Twitch and Discord -
all these players use related services even if they don't pay for the game
itself. It's also interesting to compare this to movies - games are now
comparable to or even exceeding blockbuster movies in revenue potential.)

~~~
isostatic
> It's also interesting to compare this to movies - games are now comparable
> to or even exceeding blockbuster movies in revenue potential

This is nothing new, but it's still shocking -- at least for those like me
that still remember the days of the ZX Spectrum, where blockbuster hits were
programmed in bedrooms

------
burtonator
I'm currently experimenting with this directly. Specifically trying to make
Open Source sustainable but for a consumer project.

I think Open Source really works for infrastructure projects and it's possible
to do really well either working on a system like Kubernetes or Elasticsearch.

Not so well for projects that are more focused on consumers.

My app, Polar, is focused more on consumers and is an app for people to
managed their reading and notes. Similar to Evernote but also has spaced
repetition support like Anki and we're working on collaboration features too:

[https://getpolarized.io/](https://getpolarized.io/)

I wanted Polar to be Open Source but we've had almost zero source code
contributions in the last six months.

Most of our contributions from users have been from people suggesting
features, filing bugs, suggesting architecture changes or product/market fit
issues.

These have been very helpful of course.

However, to date, we've only raised about $500.

To be clear I'm working on Polar full time so I've probably made about $0.15
per hour...

I think there's a lot of reasons for this actually but if I were to narrow it
down.

1\. Consumers hate paying for software. The plan with Polar is to go with a
freemium model so we need 100k or so users.

2\. There's a big of a 'tragedy of the commons' here with the donations aren't
coming in because everyone assumes someone else will donate.

This is really a bad situation in a lot of ways for the 'self hosting' crowd.
They want quality apps but they're not willing to pay for them.

We're polling our users about why they haven't donated and here are the
current results:

[https://i.imgur.com/cOUy10f.png](https://i.imgur.com/cOUy10f.png)

I think my next main goal is to do some sort of Kickstarter and try to raise
$150k or so.

Either that or focus on raising grants or VC.

~~~
robenkleene
Some really quick unsolicited feedback (while I acknowledge upfront I know
nothing about your business except what I gleaned from 10 seconds on your
website): You say your model is "freemium" but I don't see a way to pay for
anything on your website? That's not freemium, that's donationware. I'm not
aware of any business like yours (consumer-focused desktop software) that's
been successful as donationware, are you? If not don't expect to be the first.

I wouldn't read into the survey results, while better than nothing, look at
what people do, not what they say they'll do. The survey results are great if
you want to dig into the subconscious rationalizations people have for not
donating, but it's not going to help actually get people to pay. Instead look
for real-life examples of products like yours that people are paying an amount
for that you'd be satisfied with (if you have examples like these I'd love to
see them, I'd love for the model you're trying to actually be viable, I've
just never seen it succeed).

Finally, the business model for this product seems obvious to me: Charge a
subscription for users that want to use sync more X than some threshold Y.

~~~
burtonator
> Some really quick unsolicited feedback

go for it... really appreciate it.

> You say your model is "freemium" but I don't see a way to pay for anything
> on your website? That's not freemium, that's donationware.

Most apps that are freemium allow the user to use the app for free first and
then convert later.

Right now the app will prompt you to upgrade once you hit a threshold.

Right now one of the challenges (with freemium) is that since we're a new app
many people haven't fully integrated it into their work flow so asking them to
pay for something which they are unsure about or uncommitted is a tough sell.

> nstead look for real-life examples of products like yours that people are
> paying an amount for that you'd be satisfied with (if you have examples like
> these I'd love to see them, I'd love for the model you're trying to actually
> be viable, I've just never seen it succeed).

Freemium has succeeded (github, evernote, etc) and OSS + freemium has too
(Wordpress.org vs Wordpress.com).

> Finally, the business model for this product seems obvious to me: Charge a
> subscription for users that want to use sync more X than some threshold Y.

Yes... right now most of the users are still early so aren't actively using
the sync feature.

I might step this up though and require more users to pay earlier than later.

Honestly the biggest challenge right now is distribution and user base.

We have a smaller user base (1500 active users, 4-5k monthly users) and I need
to get this 10x at least. This is my goal for now. Without the larger user
base all this other discussion is worthless honestly.

The challenges there have been around distribution. Improving our SEO, getting
into the app stores, etc.

It's not as easy as it would seem. Takes a lot of science and testing unless
you've had a ton of experience here before.

~~~
robenkleene
Got it all makes sense, regarding "Right now the app will prompt you to
upgrade once you hit a threshold." Is there somewhere you advertise what the
threshold is and how much you'll be charged? I didn't see it on the site.
That's the first thing I'd look for when evaluating a product like this,
answering what's it going to cost me if I like it? (Not to mention it's
comforting for me to know the owners have a plan for making a living
maintaining it...)

~~~
burtonator
Not yet but it's mostly because we're iterating and trying to figure out what
will work.

For example, I'm considering not charging at all, and instead charging just
for private teams - at least in the future. That's a feature we haven't
shipped yet.

Like I said, my main goal right now is to get us to 30-50% month over month
growth and then trying to get us to at least 30k users. Until then
monetization is irrational for the most part.

I might start a kickstarter with our user base as they might be more motivated
by that rather than asking to pay directly since they're buying the vision of
the project not the actual implementation.

~~~
robenkleene
Got it makes sense, thanks for explaining. Good luck!

------
pplonski86
The list of commercial open source software companies with revenue > 100M
[https://docs.google.com/spreadsheets/d/17nKMpi_Dh5slCqzLSFBo...](https://docs.google.com/spreadsheets/d/17nKMpi_Dh5slCqzLSFBoWMxNvWiwt2R-t4e_l7LPLhU/edit#gid=0)

~~~
calcifer
Most of these companies have paid, closed source products as well so it's not
a given their revenue is attributable to open source.

Is there a list of companies that are actually, completely, open source and
still have revenue > 100M? I think _that_ is the list OP would be interested
in.

------
tacostakohashi
I wonder what would happen if someone started an open source software "vendor"
run along the lines of public radio / podcasts. Open source licensed (using a
regular GPL or other license, nothing new or tricky), but a prominent
encouragement to donate it you find it useful.

Those donations could then be used to hire full-time developers, and work on
the kinds of software that is currently not well served by open-source
(TurboTax replacements, games, office software).

Just as with public radio or podcasts, the price signal of donations would
encourage certain kinds of products to be produced according to demand instead
of enjoyment or itch scratching, but the end product would still have the
benefits of open source, no license keys or DRM to worry about.

I expect 99% of people would freeload as they do with public radio, but that's
ok, even a small participation rate could result in new kinds of open source
software being produced, and a sustainable career path for creators.

~~~
est31
Godot engine has this model. They are getting donations from patreon [1],
enough to pay 2 people full time at the center of the project. Wikipedia is
another project which is doing this very successfully.

But in general, those methods bring you much less money than if you were
proprietary, because as you rightfully point out, most people are
"freeloaders".

[1]:
[https://www.patreon.com/godotengine](https://www.patreon.com/godotengine)

~~~
Insanity
to nitpick, but to me the term 'freeloaders' has a negative connotation and I
don't think it should in the case of FOSS. Being able to use it for free is
quite literally the point of FOSS.

Apart from that, you make good points :)

~~~
bolzano
Do you mean free as in beer, or free as in speech here? I'm still honing my
understanding of FOSS, and I'm not 100% sure that FOSS means free as in beer.

~~~
the_pwner224
> I'm not 100% sure that FOSS means free as in beer.

It doesn't. The only requirements for licenses like GPL, etc. is that anyone
who you distribute a binary to can ask you for the source code, and you must
provide it for a reasonable fee (for GPL it's "for a price no more than your
reasonable cost of physically performing this conveying of source", and you
must provide the source on request for as long as you offer support for the
binary blob, with a minimum of three years).

[https://www.gnu.org/philosophy/selling.en.html](https://www.gnu.org/philosophy/selling.en.html)

Can't find it now, but I recall finding a link here (by the developer(s) of
curl iirc) about how his BMW had a screen with the free software credits and
BMW sent him a CD with the source when he requested it.

Edit: couldn't find that BMW article, but here are a few interesting links
related to that:

[https://daniel.haxx.se/blog/2018/08/12/a-hundred-million-
car...](https://daniel.haxx.se/blog/2018/08/12/a-hundred-million-cars-run-
curl/)

(multiple BMW screenshots in this page)
[https://daniel.haxx.se/blog/2016/10/03/screenshotted-curl-
cr...](https://daniel.haxx.se/blog/2016/10/03/screenshotted-curl-credits/)

~~~
dfox
The ability to somehow acquire the source is one of the requirements, but from
the making money PoV it is not that significant.

What is significant for this discussion is that another GPL requirement is
that whoever you distribute software to is permitted to redistribute however
they see fit.

------
jordigh
I think it was designed to make money: sell the actual software. RMS used to
sell free copies of Emacs: for 100 bucks, you'd get Emacs, the source code,
the documentation, and the necessary scripts to compile it. This was always
part of the definition of free software, which open source inherited.

It's just that selling like this is more difficult now that there's a high-
speed internet for everyone, but I think more people should be trying to sell
this way. App stores are one example, if they didn't have those ridiculous
GPL-incompatible restrictions, but Red Hat does outright just sell the
software in a GPL-compatible way: you want access to their repos and nothing
else, no support (I believe they call this self-service), they sell that too.

It might not make you rich, it might not hockey stick, but I think if more
people just tried to sell free software, we'd see more people being able to
comfortably make a living.

~~~
pard68
Another thing, so much of the FOSS world is nonprofit. It is very hard for a
for-profit company to give money to a non-profit. I don't know the why, but I
have witnessed a few instances and basically non-profit donations have to come
from the donations budget and that budget is usually orders of magnitude
smaller than budgets designated for purchasing and also usually shared by the
entire company and thus quickly depleted.

If there were either a intermediate broker or if FOSS companies elected to a
for-profit status than they could easily accept donations.

In the US, creating an LLC only takes the conscious effort of will to decide
you want to make an LLC and is a for-profit model, so it isn't too hard to
make.

------
softwaredoug
Years ago open source was about companies collaborating on commoditizing an
obvious solution AWAY from the market. The economic case for open source isn’t
about value added product companies, but a kind of commercial pooling of
resources to create cost reduction and easier software maintenance on stuff
nobody wants to buy or maintain...

Of course orgs have lost site of this. The sad reality is 99.999% of orgs are
OSS freeloaders or way too conservative and hence want to in house everything.
Or happy with modestly priced cloud hosted everything that ends up taking away
some of OSSs maintenance savings upside.

~~~
skybrian
You say that like OSS "freeloading" is a bad thing when it's basically by
design. If the result of previous pooling of resources is that there is a lot
of open source software that you (or a vendor) can just pick up and use, isn't
that just things working out as intended? Isn't this what users and vendors
being free to do what they want really means?

It seems like many of us are conflicted about whether open source software
should come with obligations. It doesn't have any strings attached by design,
but then we want to add fuzzy moral obligations instead.

~~~
Crinus
That is what you get with two decades of brainwashing about how open source
software being morally good and proprietary software being morally bad - at
some point you have devalued everyone's work to nothingness and end up with
both developers and users demanding your work and time to be free to them.

------
andyferris
Something has to be both valuable (useful) and rare in order for people to pay
for it. Useful by itself is not sufficient. A piece of open-source software
can't be considered scarce if you are allowed to make a copy for microcents.

Only through legally enforced IP protections do people even pay for classic
proprietary software - it's a kind of artificial scarcity (there's no moral
judgement there, just an observation). But yes, hosted services and so-on are
also rare (it costs more than microcents for someone else to set up an
equivalent hosted service).

------
collinmanderson
> Maybe this is why you can’t make money with open source: it’s a distraction.
> The question isn’t open-source-vs-proprietary, but open-source-vs-business-
> focused.

> Another lens might be: who are you selling to? Classical scratch-your-own-
> itch open source software is built by programmers for programmers.

Yes, open source works well for software written for programmers as an
audience. If programmers aren't using the open source software, then there
usually needs to be a business that's supporting the development of it.

~~~
astazangasta
This will become less true as a greater fraction of humanity learns to
program.

~~~
irrational
You mean when it goes from .001% of the population to .002% of the population?
I don't think there will be any time that a large fraction of the world's
population knows how to program. I've even tried to get my own kids interested
in learning how to program to no avail. Some of my kids don't have the
aptitude for it, but those who do have the aptitude just aren't interested.

~~~
zjaffee
Think about how many people know how to use SQL or Excel functions. While the
number of people knowledgable about writing C++ or Java won't reach this high
of a level, there will be tools that are widely understood that enable people
to build pieces of technology as needed beyond what is available now.

~~~
krageon
I have literally heard this rhetoric for the 20 years I've been paying
attention to this and I still haven't seen anything even approximating these
grand promises. Software Development is a difficult field and expecting a big
crowd to suddenly adopt it and start producing valuable content is not
reasonable.

~~~
zjaffee
That's just not true, the thing to note is that no software engineers have
been displaced to date in any clear way as a result of new tools.

In the same exact way that software engineers are able to do far more complex
work through the use of third party APIs, business users use increasingly more
complex technology to augment their work. This ranges from sales and marketing
tools, to legal research tools, to medical analysis tools.

These tools generally speak in some amount of programatic language as well,
which is why my point remains accurate.

------
capkutay
The biggest hypocrisy is when a company that's actively and aggressively
trying to monetize the open source project, with ambitions to go public, shame
companies like Amazon and Microsoft for doing the exact same thing.

And they talk about how it harms the development community...exactly how does
it harm the average OSS developer if Amazon or Microsoft or Google are
adopting the project and making it easier to deploy in cloud scenarios?

Seems like a 'have your cake and eat it too' scenario. These companies
benefitted from massive adoption thanks to open source being developer
friendly and free, yet they want it to be just restrictive enough that only
their company can monetize it.

~~~
antt
You can write a drop in replacement for that company because it is open
source. Can you write a drop in replacement for Windows or even Word?

------
adamnemecek
It's very easy to get people to pay for hosting.

In Mozilla's case, I would love to see some sort of cloud hosting for Rust. I
also wish I could write front end in Rust but maybe I'll just have to wait for
webassembly. I can't imagine that some sort of rust to js compiler (kinda like
kotlin) would be too hard and this would be a killer application.

Matei Zaharia (of the Spark fame) and friends are working on weld,
[https://github.com/weld-project/weld](https://github.com/weld-project/weld).
There's going to be a lot of money there as well. A cloudera competitor of
sorts.

But yeah, go ham on Rust based paid solution.

~~~
sanxiyn
I am working on Rust to JS compiler based on Scala.js design. I plan to
release it using Street Performer Protocol.

~~~
max76
Why do you plan on using Street Performer Protocol?

~~~
sanxiyn
Because I think it is a good way to fund development of open source software.

------
sanxiyn
I always thought Street Performer Protocol is an obvious answer to fund open
source software:
[https://en.wikipedia.org/wiki/Street_performer_protocol](https://en.wikipedia.org/wiki/Street_performer_protocol)

Do not release the source until the fund is raised.

~~~
clarry
I'd like to see crowdfunding move in this direction, but it'd be too good,
right? Calculate that a project takes $100k, amass the backing, then release
the finished work for the benefit of the whole world. What happens instead of
release is that the makers just keep it all closed and try to make further
profit.

~~~
sanxiyn
mycli used this model, read about their experience here:
[https://www.mycli.net/kickstarter](https://www.mycli.net/kickstarter)

------
ekianjo
If you call it Open Source you miss the biggest point. It is Free Software and
it is made for Software Freedom, which is the primary goal. Other goals such
as making money, come second to that.

------
bad_user
The problem of open source is one of scarcity. People don't pay for value, if
that value can be obtained for free and without effort.

People pay for scarcity and our whole economic system is based on it. Open
source unfortunately is the exact opposite.

Note that there are open source projects making money. For example Wordpress
is GPL, which forces all plugins and themes to be GPL-compatible as well. And
there are plenty of commercial plugins and themes selling quite well, all of
them open source.

But that's not necessarily something Mozilla could emulate.

------
raspasov
“You can’t make a living making music. Or art.”

This statement is too general and obviously false. Many artists make money. Of
course many or most don’t but “can’t” is a very strong word.

------
jerkstate
Open source software is infrastructure, not a commodity. Anyone has access to
build on top of it. There is no question that open source enables enormous
amounts of commerce, probably more so than equivalent closed-source software
would. In that way, open source very much does make money in the same way that
highways and airports make money.

~~~
jchallis
Tollroads and airports both have gate fees. OSS does not have gate fees.

How are these the same?

~~~
jerkstate
You're torturing the metaphor. But OSS development on large important projects
is now almost completely subsidized by the big and small companies that use it
for their own ends and contribute much of their work back to the common good.
So the companies that make use of it in the biggest ways do pay for it, but
that effort and money contributes to a common that others can use (for only
the cost of time in hobbyist cases).

------
throwaway86576
I think you need to examine niches carefully. I was able to create an open
source piece of software that allowed me to sell over $50,000 worth of ebooks
(training manual) over the course of 5 years. Eventually I was able to sell
the entire software for a small five figure sum.

The money involved was not huge but it was great to have. Users did not care
that the software was OSS. They cared that is solved a problem and the ebook I
sold made it even easier. That is how OSS makes money - by solving problems.

OSS is not a business strategy, it is just a software license. You do not
"make money" by adopting a software license, whatever it's moral merits. You
need a business that solves a problem and OSS can be part of that.

------
carapace
Ever since I was a kid, I assumed that computers and robots would soon solve
all production scarcity problems (or that we would make Star Trek-style
"replicators" that worked by manifesting holographic images, whatever) and
there would be a world of plenty, no one would have to go hungry or homeless
or even work at bad jobs. I thought that all I had to do was write good
software and give it away and sooner or later everything would take care of
itself economically.

Instead we have smartphones, computers that function as pocket strip-malls
with addictive games and back-alley scams.

------
51lver
So open source is generic, and personalized interfaces are profitable. Well
then. I guess now is a really good time to be running an app store.

~~~
sanxiyn
Mozilla should let people buy, say, Tree Style Tab, and split revenue with the
author.

------
nicodjimenez
Open source doesn't make money for the same reason music doesn't make money.
It's very hard to charge for content directly nowadays. What people do pay for
is user experience. The money in open source flows to cloud hosted open source
services on AWS / Azure, the money in music content goes to Spotify, the money
in TV shows goes to Netflix, ...

Agree / disagree?

------
otikik
Maybe it will not make "Lamborghini collection" money, but I have been making
"buy a house and raise a family" money from it for the last 8 years. I know
I'm privileged in this regard.

In my last 3 gigs, one of them was fully opensource (the Madrid City Hall
decided to build a direct democracy platform) and the two others have been
"open core", where there was an open-source component accompanied by an
"enterprise offering" which was closed source, with extra features. Money was
made by selling this "enterprise version", plus support, to other companies.
This money pays for my salary, which involves mostly the open source side of
things. The Open Source version is a "foundation" and a very good "marketing
tool" amongst other developers. There's an ecosystem built on top of the open
source version and we have some pull requests from the community. The main
drive behind new features is still our internal dev team.

------
galaxyLogic
How about selling adds that are embedded into source-code?

The target-audience of the adds would of course be coders because who else
reads source-code. Maybe not a big audience but the adds could be permanent.

And what would the donors be advertising? Maybe development tools but also
themselves as a potential employer. It would be basically VERY targeted
marketing because only coders would see it.

~~~
krageon
Except who wants to let that particular parasite poison another good thing?
Certainly not the people most likely to actually work on OSS. I know I would
stay away from any project that did this, even if I considered donating my
time and energy to them.

------
ascotan
It's all about market segmentation. If you price your software at $0, you'll
end up with a large user-base (in theory). You can then start pay-services
like consulting/support. Eventually you can add new product lines based on OSS
with additional bells and whistles.

The reason this works is that once you have a large user-base you can get
people to buy your services because you have now developed a stickiness with
your customer-base.

Exhibit A: Hashicorp. People started using Vagrant, the user-based expanded.
When they moved onto other pay-services, people followed.

The reality is that developers want 'free' stuff they can build with but
IT/Ops wants 'pay' services where they get 24/7 support, consulting, etc etc.

No company will be fully OSS because no money = no company. However I can see
many orgs support OSS as a customer engagement tool to drive their brand and
get a user base that they can drive towards other products.

------
anon1m0us
It's designed to make money for everyone EXCEPT the person writing the code.

Especially business people who resell the code to their customers without ANY
investment into actually creating something or paying people with talent who
do things that make the world a better place.

Why would the world properly value our contribution if WE don't value our
contribution?

------
innnzzz6
(nobody cares much, and it's not developed by some community bazaar style,
Google calls all the shots, and the good stuff -google apps- are not Open
Source). >And now the OSS worlds is a convoluted mess. Not really. >It costs
way more to make Ruby on Rails work than just installing IIS and writing some
C#. Yeah, no. If anything RoR is famous for its ease of development. And it
costs nothing (besides programmers, which you need in any case), which is why
cash-strapped startups prefer RoR and other FOSS solutions over MS. >Now those
who said Microsoft was bullying them are the bullies. Non sequitur. >OSS has
become more expensive than the Microsoft equivalent. Non sequitur. OSS is as
free as ever (and better than ever). >No one wants to pay for code at all
anymore. Less want to pay for code, though billions still buy software and pay
for services.

------
anonytrary
> with an open source license it’s harder to force someone to pay for a
> product

Most OSS business models don't try to sell the actual OSS. Usually a separate,
commercial product is built on top of the actual OSS.

> You can’t make a living making music. Or art. You can’t even make a living
> taking care of children.

For everyone else smashing their keyboards, I think his point is: It's hard to
make good money as an _average_ artist, whereas it's easy to make good money
as an _average_ software engineer.

> This is where the Free Software mission has faltered despite so many
> successes: software that people actually touch isn’t free or open.

The point is that those commercial applications almost always depend on FOSS.
If you have a better idea, go and build a better commercial product. You'll
probably depend on similar FOSS.

------
jwildeboer
I’m finishing my 14th year at Red Hat as we speak. In that time Red Hat had
two digit growth every single year. We employ around 13000 people. And in all
those years I have read at least one article per week claiming that it isn’t
possible to make money with open source. Weird.

~~~
teddyh
Except you don’t work for Red Hat anymore. You work for IBM.

~~~
dragonwriter
IBM has not completed the acquisition (and when it does,Red Hat may still
exist as a subsidiary), so, no, people who work for Red Hat that haven't left
and gotten hired by IBM still work at Red Hat, not IBM.

~~~
teddyh
That’s a technicality, and very much a matter of subjective opinion. How many
people who worked for Sun Microsystems thought that they still worked for Sun
after Oracle bought Sun? From what I understand, it was few enough to have
people quitting in droves.

------
acolytic
One thing I'm not seeing here is people giving freely simply because you
created something they value. You will never become a billionaire through this
mechanism but I suspect you can probably earn a decent living.

The problem with this mechanism is that now each project is out on their own
to advertise their needs and get donations. I'm actually experimenting in this
space with SeedAndDew
([https://www.seedanddew.com](https://www.seedanddew.com)). My hypothesis is
that if you can give people the ability to set a specific amount to open
source that automatically goes to the right places, more people will
contribute. Just went full-time to see this through so early days but I'm
optimistic.

~~~
soulbadguy
Are the donations tax deductible ? How did you guys arrive at the 30% figure ?
Seems quite high to me

~~~
acolytic
Donations are not tax-deductible for now. We might do that later if people ask
for it.

30% includes all payment processing costs and other costs for both users and
projects, so there is a flat 70% remaining for projects that doesn't get
deducted further. We do this to keep things simple and make it clear how much
projects can get.

Payment processing alone costs $0.3 + 3% with Stripe, so at $10/month that's a
fixed $0.6 out of the $3 we take. The other $2.4 needs to accommodate the fees
to send money to each of the projects + infrastructure costs. Not sure how to
account for that but assuming at scale around $0.4/user/month, we're looking
at $2/user/month in profit. Assuming sustainability is reached at $200,000,
that is approximately 8300 people giving to open source through this. That is
high but seems approachable.

Does that seem reasonable? My objective with this is to build something that
increases the pool of people who contribute but also ensure the underlying
project can stay afloat indefinitely with the right incentives.

~~~
soulbadguy
First thanks for doing this.I was actually looking for a good and efficient
way to give back to OSS.

30 % seems more inline with apps store etc... which are closed, for profit
entities. Other crowd founding venue charge around 5 % which is the level i
would personally feel comfortable with.

The way the donation are distributed is interesting and seem to be geared
toward people wanted to give back to communities on which they are actually
contributing (time spent on the documentation pages). Personally i am looking
for a way to give to project i use the most, (firefox, vim , zsh etc...) and
also project that i use and particularly need funding.

Any plans for the entreprise market ?

~~~
acolytic
>Other crowd founding venue charge around 5 % which is the level i would
personally feel comfortable with.

5% is $0.5 which right off the bat assumes payment processing is separate.
That's fine if people prefer that but even then $0.5 is barely enough to cover
infrastructure. How do we pay for someone to maintain that infrastructure?
This is the same issue OSS is facing but on the other side. No one wins when
the tools we rely on don't have a sustainable business model. I don't think 5%
is sustainable as we've seen with Patreon's recent increase.

>Personally i am looking for a way to give to project i use the most,
(firefox, vim , zsh etc...) and also project that i use and particularly need
funding.

Yea this mostly geared towards libraries and frameworks not apps.

>Any plans for the entreprise market ?

Enterprise is an important market but I was hoping to get some early adopters
to prove the idea first and then use that proof to get businesses to join. Not
opposed to doing both in parallel though.

------
jopsen
If Firefox for Android cost 10 USD / year some people would buy it..

Even if there was 100 free forks readily available. People would pay for the
brand :)

Honestly, I prefer bitwarden over "password store" because I pay and, thus, I
know it's unlikely to go away or go unsupported.

~~~
sanxiyn
Even 10 USD / month would work. (This is roughly how much Reddit Premium
costs.)

------
abetlen
Very relevant is this old post by Joel Spolsky on tech companies using free
and open source software to commoditize their complements.
[https://www.joelonsoftware.com/2002/06/12/strategy-
letter-v/](https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/)

Basically, you can increase the demand for a product by decreasing the cost of
it's complements. You can increase the demand for managed Redis services by
investing in making Redis better. The caveat is that you can't control where
that demand goes and you might end up helping out your competitors more than
yourself.

------
StreamBright
> The question isn’t open-source-vs-proprietary, but open-source-vs-business-
> focused.

I disagree. Some of the very successful FOSS projects are backed by businesses
that benefitting using those. Linux, RocksDB, React, Tensorflow would be good
examples.

~~~
slantyyz
Yeah, it seems like he's forgotten the about enterprise segment altogether.

A lot of companies have OSS but make money charging for support and/or
additional features (granted, some of those additional features may not be
OSS).

Examples: Liquibase, Pentaho, Flyway, etc.

~~~
whoopdedo
In that situation writing software is like cleaning dishes. No one in the
restaurant business says, "We need to find a way to monetize our dishwashers."

------
z3t4
Everything can be sold if you can find the right buyer. When it comes to
browsers Google is the customer, and users are the product. When doing free
open source software, your product can not be the software itself. People
don't pay for software, they pay for solutions. What problems are your
software solving ? How can you package and sell that solution ? People less
smart then you are packaging _water_ and selling it in bottles. A lot have to
do with branding.

When going from free to paid, consider the probability that the only reason
people use your service is because it's much _cheaper_ then the alternatives.

------
ffn
What if the problem with open-source not making money isn't the open-source
part, but the money part?

Our current economic system focuses on money as a medium of "equivalent
exchange", as in there's no free lunch and a dollar you spend on buying a
piece of butter necessarily means you can't spend that same dollar on a gun
(same thing for the butter merchant). This exchange is based on a contractual
agreement that binds for a finite time, and stuff that happens outside that
window is necessarily considered an "externality". In other words, money
facilitates a social interaction that prioritizes focus on the costs/benefits
of individual(s) involved while de-prioritizing the costs/benefits of the
collective at large.

But contributing to open-source is not that sort of social interaction,
instead, it's one that prioritizes contributing to the collective over
individual gain - i.e. a social interaction that focuses on externalities
instead of on contractual time-based exchange. Money, with its focus on being
loosely "conserved" (e.g. you can't double-spend the same dollar), is simply
not a good medium for encouraging cooperation and discouraging free-riding to
open-source (and other public-goods)

In traditional villages, public-goods contributions were facilitated with some
combination of reputation and gossip. Later, cities and states managed to come
up with taxation, courts, and prison when reputation and gossip failed to
scale. But the super-connected capitalist "globopolis" of today demands a new
form of organizing cooperation and eliminating free-riding when it comes to
public goods.

To properly solve the problem of the economics of open-source, we need to
solve this more general organization problem.

~~~
gunta
Perhaps form a global NPO where participant countries give x% of all their
taxes to donate to OSS projects

------
philipswood
Maybe software should be payed for per second usage?

Implemented as a charge added to cloud usage costs.

Terms of use and terms of agreement machine readable and included in public
available source code.

Code publically available, publically built and cryptographically tagged by
usage and licensing Metadata. Like a smart contract.

Anyone who used the code would automatically be billed by the cloud provider
on the license holder behalf.

This would align incentives better and enforce the openness of the source as a
byproduct.

(the licensing should ideally be built into the platform, which should be
vendor neutral, e.g. K8s and maybe the license could waive cost collection for
self hosted use on own hardware)

------
hyperpallium
Can you design a license that increases the proportion paid to Labor (as
opposed to Capital)?

NB: I don't mean more hours are required; I mean workers get paid more per
hour.

Labor prices only seem to change with supply and demand. If you're making lots
of money, and labor is cheap, why pay more? That's where a minimum wage helps
shift the allocation.

You could shrink the Labor supply, perhaps artificially; or you could increase
demand for Labor.

You could directly legislate by license: the license available only to
businesses that e.g. pay at least a minimum wage.

Of course, businesses won't like that, so your software had better be
something very useful.

------
miguelmota
One trend I see is the following timeline pattern of an early startup wishing
to become a scalable SaaS platform with an open source core:

Services > Support > Packaging > Subscriptions > Open Core > Managed > Cloud >
SaaS

Basically they open source a core component that doesn't compromise the
business model. For example, only open sourcing an engine but not plugins,
modules, or dashboards around it. They also open source the core once they've
already gained traction which puts them way ahead of anyone trying to do the
same thing they are.

------
vortico
Plugin-hosting open-source software is great for money. If you build a
platform and sell software that extends its functionality, you can may be able
to sufficiently fund the platform. You have a huge advantage over third
parties (which you shouldn't try to restrict) because customers prefer plugins
developed by the original vendor of the platform.

I did this with [https://vcvrack.com/](https://vcvrack.com/) and it has been
successful IMO.

------
mamon
The pattern that I see emerging now is that companies treat Open Source as a
way of offseting software maintenance cost. They will create something for
their internal use, and once product is feature complete and relatively
stable, they will open source it, so that they can receive free bugfixes,
which I guess they merge upstream.

Some examples include Google with Kubernetes, Netflix with their cloud tooling
(Eureka, Ribbon, etc.), LinkedIn with Kafka, Yahoo! with Hadoop, and many
others.

------
blablabla123
So many people make money with open source. Like with Basecamp, macOS is in
part Open Source, Chrome is basically an Open Source Project.

Of course there are bizillion of projects but they are just not as popular or
not used for anything that generates a lot of money.

I'm sure when you are a core contributor of some popular Open Source projects,
you'll have no problem doing well-paied consulting work or get a good job that
allows for Open Source work within working hours.

------
peterwwillis
The whining about cloud vendors making money off OSS is sour grapes, plain and
simple.

OSS exists in the spectrum of a gift economy. Once you give it away, you don't
get to expect something in return, or expect them to use it in a particular
way. You gifted it away. In fact, the original OSS definition explicitly
stated you could not discriminate against fields of endeavor. But I guess envy
is stronger than idealism.

------
bachmeier
IMO one of the problems with monetization is that the price ends up being too
high. I'd love to have Pocket Premium. Just not enough to spend $45 a year for
a bookmarking service.

I see way too much focus on the value of whatever they're selling and no focus
at all on what else I could do with that money. I'd gladly pay $8 or $10 a
year for a good bookmarking service, but not $45.

------
RIMR
I think the most important take-away here isn't whether or not you can make a
profit with Open Source solutions or not - the take-away is that whether or
not a Open Source project is profitable or not is completely irrelevant when
discussing the usefulness of said project.

It's like complaining that insulin isn't fun enough. Nobody taking insulin was
trying to have fun.

------
tzakrajs
What I am hearing is “Hey corporations, we have this great open source project
and everyone should adopt it (including you!) just don’t try to contribute
your changes upstream because they are toxic and serve your dirty, corporate
needs. This project should serve the needs of the indie developer first, non-
commercial developers second and commercial developers last.”

------
bigbadgoose
I love that this has to actually be articulated. To be clear, open source
_can_ make money, but it is not _designed_ to make money.

------
quadrangle
…and designing it to make money _necessarily_ undermines the free/libre/open
public-goods values. There's NO WAY OUT of this dilemma.

The best we can do is to work within the dilemma. That's what
[https://snowdrift.coop](https://snowdrift.coop) is aiming to promote and
support.

------
buboard
All software is designed to not make money. Duplication of software is free by
definition, so the value of software is essentially free unless it is paired
with something that is not duplicatable and thus more valuable. A legal
license, a physical product, consulting, support, a website, those are all
non-duplicatable.

~~~
svn120
Assigning a value to things that can be duplicated with zero cost (i.e.
copyright and IP) is a great cultural achievement.

Human creations (physical or non-physical) should rank higher than land (which
no one created but still irrationally claims).

------
x404
The purpose of open source may not making money. And maybe most of the open
source developers are not good at making money. But if there is a
infrastructure to help the developers to get money through their open source
software, and still keep the open source free for personal learn and use, that
will be fan.

------
robbrown451
The real problem is that our scarcity based economy wasn't designed to deal
with intellectual property.

~~~
anticensor
Neither does post-scarcity economy. Even post-scarcity economy requires finite
supply of goods.

~~~
robbrown451
Doesn't it depend on how it is set up? I could think of lots of ways to set up
a post-scarcity economy that could work well, at least if population isn't
growing wildly.

------
rb808
It also destroys good paying software jobs. Previously corporations paid big
bucks to IBM, Oracle, Sun, Borland, etc for operating systems, databases etc,
and those companies paid a lot of good technical people to write software. Now
they get all that for free. Nice work guys!

------
skorbenko
Is there a way to make this work via cryptocurrencies? Just looking to start a
discussion.

------
everdev
> Open Source Doesn't Make Money Because It Isn't Designed to Make Money

What?

RedHat - $34B

MuleSoft - $6.5B

Elastic - $5B

Cloudera + Hortonworks - $5B

Pivotal Software - $4.7B

MongoDB - $3.5B

~~~
gnat
Those are businesses. Businesses are designed to make money. Open Source is a
category of licenses designed to facilitate distribution of software.

I feel like much of the problems mentioned in this thread come down to people
wanting to be paid to write software but not building a business that lets
them do that. They spent all their time working on the software and not the
business.

The book "The E Myth" about entrepreneurship tackles this. "You're a baker who
loves to bake. You start a bakery. Now you're a business person first, not a
baker." They say "you work ON the business, not IN the business."

In business, you trade money for value. If it's high value they can't get
elsewhere, you might get a lot of money in the trade. You work on your
business by figuring out what value you'll sell, and to whom ... and design
your business by choosing those parameters so you make a living.

It's no different with musicians and photographers. You can love their craft,
and be good at it, but not find something to sell that makes you a living.
Wedding photographers generally don't like their job, but it pays great. It's
generally not the art form they prefer, but it's the one that's easiest to
make a living at.

Business is this constant negotiation between supply (you, the programmer) and
demand (the people you're hoping will give you money). Not every product sits
at a profitable place on this curve.

Open Source privileges the Creator, not the Buyer. I can make whatever I like
and give it away for free. I might have one user or a hundred million. Because
it's not a business model (an exchange of value for money), it isn't at all
concerned with the financial viability of the programmer's lifestyle. That's
why surveys repeatedly find that "most" "programmers" work for a company and
are paid to produce open source (for some values of "most" and "programmers").
The companies handle the messy business stuff that isn't as much fun as
coding, and programmers just get on with coding.

~~~
everdev
OK, following that logic then there isn't much money in anything besides
business.

~~~
mamon
That's exactly how it works: profits from business go to shareholders and
executives, who are business people first and may have no idea about their
company's business domain (how many GMC executives would be able to repair
your car?)

------
amelius
I wish it were possible to scale the price of a piece of software with the
amount of money that people make with it.

Then you could make money from big companies, and let individuals and small
startups use your software for free.

------
microcolonel
Open source makes heaps of money... but the gains are distributed. It should
be obvious why your single open source project didn't turn into even a small
business: how would the money even get there?

------
jszymborski
I'm tempted just to say dual AGPL-Commercial dual-licensing, and granting MIT-
style licenses for non-profit/academic use on request... although I know
that's not workable for all cases

~~~
gunta
Ive been thinking that this is really the current best solution to the
problem.

I want to try this, is there any project who has implemented this MIT/Apache
licenses on request?

Ideally we need first a system to do the request approval a la [https://cla-
assistant.io](https://cla-assistant.io)

------
peter_retief
I want to emphasise this "Anything paired with a physical device. People will
judge the value based on the hardware and software experience together." This
is THE future growth market IMHO

------
gesman
Open or closed, free or not - the solution is as good as its capability to
solve problems.

Commercial software that is lousy and buggy is not.

Free, open source software the requires an army of consultants to make use of
it - is not.

------
schappim
The author should make the distinction between OS Software Vs OS Hardware.

OS Hardware can very much make money (hear Adafruit, SparkFun, Pololu, Seeed
Studio, of course Arduino and to an extent Raspberry Pi).

------
kodz4
Wikipedia has managed to survive despite all kinds of threats, using donations
and it's MediaWiki revenue stream.

------
alexnewman
Sure it does, we just don't have much experience on how. I expect the next
Microsoft will be OSS

------
daveheq
It makes money if you charge for support, consulting, or for any work building
something with it.

------
innnzzz6
"love OSS" and how their initiatives like "Open Distro for Elasticsearch"

------
rbreve
Made tons of money installing and giving support for open source software

------
amelius
Governments could fund Open Source, just like they fund academic research.

~~~
godelski
They do. At least in the US they do. I work with DOE labs in my academic
research and everything I work on/with is open source.

------
m3kw9
Add IP and services on top of it, look at Mongodb, Elasticsearch, Redhat

------
godelski
And.... the website is marked as insecure...

------
_bxg1
> That’s what we think the world should be like, but we all know it isn’t. You
> can’t make a living making music. Or art. You can’t even make a living
> taking care of children. I think this underlies many of this moment’s
> critiques of capitalism: there’s too many things that are important, even
> needed, or that fulfill us more than any profitable item, and yet are
> economically unsustainable.

Great quote; tucking it away for later. This is why democratic socialism is
essential. Money is a lossy codec for true value.

------
badsavage
One word: tokenization

~~~
badsavage
Most of the crypto world is open source

------
anth_anm
The answer is more aggressively copyleft licensing (AGPL, and others).

 _If_ APIs are copyrightable that's a very unfortunate thing, but it would
also make it possible to protect FOSS IP much more aggressively. Mongo
wouldn't be getting destroyed by Amazon, for example.

~~~
quadrangle
That doesn't solve public goods funding dilemmas, that only works if you do
the non-free/libre/open license option and you're making some upstream thing
for use in proprietary products.

Copyleft is only a business model if you tie it to non-FLO products, which
defeats the point.

------
anth_anm
Open source makes other people billions.

------
abhaycircle
This is something that I am observing too.

------
Kuraj
I've had this idea in my head for some time but I wonder when browsers will
start suppressing address bar content changes while the input is active and
it's in the "dirty" state.

It's really annoying to make a typo, realize it, try to correct it, and ending
up hitting return on a malformed url AGAIN because the site finished loading
in the meantime.

~~~
Kuraj
Oh crap, wrong thread. Sorry about the off-topic.

------
craigsmansion
Maybe Mozilla could do with a bit less money.

They've been playing serious business for some time now, but it's pretty much
been borrowed feathers.

Firefox got big because of early enthusiasts who believed in a better web.
That got them enough clout to get google interested, and google basically gave
them large piles of money.

Somehow that gave them the idea they were a "real business" now, and they
started spending and reorganising themselves accordingly.

Now it turns out they probably weren't a real business after all. Those piles
of google money in the bank could have sustained pure Firefox development
perpetually, probably even allowed for fun and useful side-projects like Rust,
but no, Mozilla wanted to play serious business, except, of course, now they
have to compete against actual serious businesses, which in this case would be
Google and Microsoft, and so far their efforts haven't been a unanimously
successful.

> This is where the Free Software mission has faltered

No, this is 1. where Mozilla has faltered, and 2. Focusing on money,
marketability, and business friendliness is pretty much an open source
objective. That's fine, but don't drag Free Software into this.

~~~
hinkley
From what I understand, a bunch of the long lived charities put their
donations in the bank and live off of the interest. You get more donations by
pretending like the money is for your new program, but it's only indirectly so
(more assets equals more operating capital).

If Mozilla didn't do that, their biggest opportunities for setting up and
endowment are in the past and it won't go well for them in the future.

~~~
hinkley
Well, fuck. In 2017 they operated at almost 120% of income:

> Overall, Mozilla invested $24M in this work in 2017. Total revenue and
> income support to the Mozilla Foundation in CY 2017 was $20.6M.

