Monday, March 18th, 2019

Open Source Doesn’t Make Money Because It Isn’t Designed To Make Money

Or: The Best Way To Do Something Is To At Least Try

We all know the story: you can’t make money on open source. Is it really true?

I’m thinking about this now because Mozilla would like to diversify its revenue in the next few years, and one constraint we have is that everything we do is open source.

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.

I myself am trying to pitch a commercial endeavor in Mozilla right now (if writing up plans and sending them into the ether can qualify as “pitching”), and this question often comes up in feedback: can we sell something that is open source?

I have no evidence that we can (or can’t), but I will make this assertion: it’s hard to sell something that wasn’t designed to be sold.

We treat open source like it’s a poison pill for a commercial product. And yes, with an open source license it’s harder to force someone to pay for a product, though many successful businesses exist without forcing anyone.

I see an implicit assumption that makes it harder to think about this: the idea that if something is useful, it should be profitable. It’s an unspoken and morally-infused expectation, a kind of Just World hypothesis: if something has utility, if it helps people, if it’s something the world needs, if it empowers other people, then there should be a revenue opportunity. It should be possible for the thing to be your day job, to make money, to see some remuneration for your successful effort in creating or doing this thing.

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.

I won’t try to fix that in this blog post, only note: not all good things make money.

But we know there is money in software. Lots of money! Is the money in secrets? If OpenSSL was secret, could it make money? If it had a licensing paywall, could it make money? Seems unlikely. The license isn’t holding it back. It’s just not shaped like something that makes money. Solving important problems isn’t enough.

So what can you get paid to do?

  1. People will pay a little for apps; not a lot, but a bit. Scaling up requires marketing and capital, which open source projects almost never have (and I doubt many open source projects would know what to do with capital if they had it).
  2. There’s always money in ads. Sadly. This could potentially offend someone enough to actually repackage your open source software with ads removed. As a form of price discrimination (e.g., paid ad removal) I think you could avoid defection.
  3. Fully-hosted services: Automattic’s wordpress.com is a good example here. Is Ghost doing OK? These are complete solutions: you don’t just get software, you get a website.
  4. People will pay if you ensure they get a personalized solution. I.e., consulting. Applied to software you get consultingware. While often maligned, many real businesses are built on this. I think Drupal is in this category.
  5. People will pay you for your dedicated and ongoing attention. In other words: a day job as an employee. It feels unfair to put this option on the list, but it’s such a natural progression from consultingware, and such a dominant pattern in open source that I think it deserves acknowledgement.
  6. Anything paired with a physical device. People will judge the value based on the hardware and software experience together.
  7. I’m not sure if Firefox makes money (indirectly) from ads, or as compensation for maintaining monopoly positions.

I’m sure I’m missing some interesting ideas from that list.

But if you have a business concept, and you think it might work, what does open source even have to do with it? Don’t we learn: focus on your business! On your customer! Software licensing seems like a distraction, even software is a questionable thing to focus on, separate from the business. 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. And it is wildly successful, but it’s selling to people who aren’t willing to pay. They want to take the software and turn it around into greater personal productivity (which turns out to be a smart move, given the rise in programmer wages). Can we sell open source to other people? Can anyone else do anything with source code?

And so I remain pessimistic that open source can find commercial success. But also frustrated: so much software is open source except any commercial product. This is where the Free Software mission has faltered despite so many successes: software that people actually touch isn’t free or open. That’s a shame.

You may also wish to read Hacker News Comments on this post, or the Reddit r/programming comments

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This is the personal site of Ian Bicking. The opinions expressed here are my own.