An open source project is not a business. Or at least not on its own.
If there’s one thing I had to learn the hard way when I started my first open source business, it was this lesson. Since letting go that business a few months ago, I’ve seen the same story played out time and again in the open source and collaborative industry.
The story typically goes something like this: a person discovers open source for the first time while sitting in their cubicle at their day job, learning about WordPress or browsing through TED talks. They get lost in this new world they’ve discovered, reading everything they can find on the subject.
They get their nerve up, set up their github account, and start their own open source project. They’ll worry about the money part later — the goal from the outset, is simply to build their own solution… And then they wake up a year later with the burden to maintain their projects and wondering when the money part was supposed to happen. Did they miss a step?
Well, yes, they did. They forgot to make a product or service.
At some point, every professional developer or designer has to turn the corner from developer-scratching-his-itch to entrepreneur-trying-to-build-a-profitable-business. The key change along the way? Start making money by building a product or service and selling it to your audience at a price that makes sense.
Maybe you’re on that journey right now. Perhaps you’ve just cracked the code on making your first dollar. Or maybe your business has just finished its most profitable year ever. Regardless, understanding the many faces of open source business is the key to turning any open source project into a business and growing that business over time.
An open source project is not a business. But it can be one of the best ways to build an audience that will buy the products and services you have for sale. Step one: make your first, or next, product or service.
Today we’re going to see how different open source projects have bridged this problem: In other words, we cover the fundamentals of turning an open source project into a business. There might not be a more important topic when it comes to helping you make a living as a professional open source entrepreneur.
Here are some ways businesses have leveraged their open source nature:
Using Open Source to promote your business
If you like nice free pictures, you probably have heard of Unsplash. It’s a website of open source stock photographs that I’m completely in love with. The project started as a page to attract visitors to Crew’s developer marketplace.
They did a photo shoot to get nice photographs for their own site. They only used one photo, so they had a lot of extras. They also knew many people would also be needing beautiful free pictures, so they posted their extra photos online and gave them away for free.
“A $19 Tumblr theme and 3 hours later, we had a site called Unsplash, with 10 of our best extra photos and a link back to our homepage.”, recalls Mikael Cho.
The day they posted it on Hackers News they got to over 50,000 visitors. In December 2016 it hit 1 billion views per month. But ultimately the objective of this open source project was meant to support their developer and designer marketplace.
And promote it did. Unsplash referred over 5 million visitors to Crew, helping push their business beyond their wildest expectations.
So by giving access to free quality stock photographs, they’ve been able to promote the services of their developer marketplace services.
Fairpixels is another great practitioner of this strategy. They are a pay-what-you-can-afford design firm that had lots of unused logo design proposals piling up on their hard drives. So they decided to just give them away, and free up every week their latest rejected logos on their Logodust website.
It’s a pretty neat idea for startups who want a nice logo and have no money. And for those who want a custom design, Fairpixels offers on the to design custom logos for whomever needs them.
By giving startupsaccess to free quality logo designs they redirect those startups who want to get a custom logo to their services.
One last example of a company using open source to promote itself is Brewdog, a scottish craft beer brand that was founded in 2007. They’ve been opening bars and exporting their beers all over the world since.
They’ve also opened their ownership to over 35,000 fans through its equity crowdfunding campaigns, called Equity For Punks, where it offers them several benefits such as discounts in their bars and online purchase of their beers, or the opportunity to attend their Annual Shareholders meeting.
Owned by more than 35,000 beer fans through its game-changing crowdfunding scheme, Equity For Punks, as well as reinvesting its innovations back into the craft community to invigorate a new generation of independent home brewers.
In 2016 they “open sourced” over 200 of their craft beer recipes to promote inclusivity and to help strengthen their home brewing community and their beer evangelism.
This has been argued to be a publicity stunt to help their equity crowdfunding campaign. It certainly doesn’t hurt, but the point is that they have published their recipes in a way that can benefit the community as a whole. If it can reinforce their home brewing mission, all the better. To me that looks like a win-win situation for Brewdog and for the craft beer fans who want to experiment and learn from their experience.
By creating opportunities for fans and professionals to learn how to make professional craft beer and to remix BrewDog’s recipes, they’ve driven more people to buy their beer at their bars and to invest into their crowd-equity campaign.
Open Source solutions greasing the slide for users to become clients
You know when is the right moment to offer a paying service? Once you’ve helped others make money for themselves.
WordPress has allowed loads of people to make money with their blogs and websites. It has enabled nearly 77 million people to get their website up and running. WordPress has empowered them to spread their ideas, run businesses, set e-commerce websites, sell course, themes, plugins or to get hired as freelancers.
If the Internet was California during the gold rush, WordPress would be the shovel most people are rushing to get their gold. First, because it’s free, and second, because it’s really helping them build new businesses.
And when entrepreneurs experience so much value out of a an open source solution, it makes it much easier for them to re-invest some of the money they make in paid services like wordpress hosting or plugin services. But this wouldn’t work if WordPress hadn’t prepared paid services that provides value to their users and helps them support their open source development.
MySQL’s database also powers many of the open source websites, such as WordPress, Drupal or Joomla, as well as big proprietary websites like Facebook, Twitter, Youtube or Flickr. It has also empowered many freelancers and consultants to build businesses on top of their technology.
To get its money pump flowing, MySQL makes their software available under a GPL open source license at no charge. but it also sells it under other more traditional licenses to clients who find the open source license too restrictive for their purposes, such as not being able to include MySQL software in a closed source product.
They also sell more like support, consulting or training. Facebook was a long time non-paying user. Until the day they were growing so fast and having so much stuff to get done that they prefered to outsource their database maintenance to MySQL. So if MySQL had not been open source, Facebook would have never used it to build their own platform, and hence would have never paid MySQL for their services.
Open Source content to build a grateful community that will buy your funky merchandising
FreeCodeCamp is an open source community that helps anyone learn to code through self-paced learning challenges. Their objective is to help others find developer jobs, as well as help non-profit organizations develop software that will help them develop their social mission.
It’s really well made and it has gotten remarkable results by helping thousands of people to develop coding skills, to find engineering jobs. $1,400,000 have also been donated in pro-bono code to non-profits.
The beauty of it is that it’s completely free, but they also understood that they needed to sell something, Stickers, hoodies and referrals to products they endorse, if they were to survive and keep going with their own education mission. So they sell stickers and hoodies which has made them self-sustainable.
Another project that has benefitted from freeing the copyright of her content was Sita sings the blues. When Nina Paley birthed her movie, she decided to release all copyrights so everyone could download, distribute, copy, archive, show and share the movie without restrictions with their networks.
This move made it possible for her to get picked up by some acclaimed critics that promoted her work, and has since been viewed for free by millions of people. In return fans have supported her work by buying DVDs, stickers and other goodies she offers on her website.
Open Source to support communities of makers happy to buy your products
Are you familiar with Sparkfun, Adafruit, Arduino? Their companies have thrived by developing open source hardware users can study, modify, distribute, make, and sell the design or hardware based on their initial designs.
Sparkfun started selling electronics with the added value of publishing the designs in open source. This enabled their users to understand and improve their designs.
Adafruit was founded in 2005 by MIT hacker & engineer, Limor “Ladyada” Fried. The company’s goal was to create the best place online for learning electronics and to make products for makers of all ages and skill levels.
Arduino is another hardware and software company that designs and manufactures open source microcontroller kits to build digital devices and interactive objects that can sense and control objects in the physical world, like 3D printers, Prosthetics, drones, robots, lawnmowers or automated greenhouses, and many more. Many people have been able to build business using their products or by designing new products on top of their products.
They all give away free access to learning resources like written tutorials or introductory videos for beginners. Their goal is to make it possible for people to get involved in technology, science and engineering.
And they can support their open source work by selling through their online sites electronics kits, components, tools, and accessories, as well as consulting services.
How can you do this on your own?
If you have an open source project that’s useful to others, you’ve already done most of the work. You are just a few steps from turning it into a business and getting the funds you need to make your open source project sustainable.
Here are some actions steps you can follow:
- Decide what service or product you want to offer
- Publish and open source any unused work you may have made on the side and that could be useful to others
- Promote it to your friends, through social media, forums, Reddit, Product Hunt, Hackers News or whatever you can think of
- Redirect visitors to your crowdfunding campaign, like Equity for Punks, add a call to action offering your services (Ex: “Request a custom logo”), or to your commercial site (i.e. “Made with love by Crew / Arduino / Whatever your business is called”)
- Invite others to add their own works in open source
Remember, if you aspire to make an open source project and want to live from it, whatever you do, never forget to think of products and services that you can offer to maintain yourself and your business.
If you don’t have any idea of what you can offer, head over here to find legitimate ideas to make an open source business and here to find ideas that will resist robot automation, I’ll guarantee you’ll get dozens of ideas to turn your open source project into a business. And if you don’t know how to sell your ideas, head over here to find how to get your first dollars to get your open source business up and running.
Latest posts by Jaime Arredondo (see all)
- Want to create a thriving social business? Stop promoting it’s social benefits - March 14, 2018
- How Adafruit grew over 700% for 3 years in a row making open source hardware - March 1, 2018
- The Success Habit That Doesn’t Give Up On Ethics - October 22, 2017