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How to make $100k in Open Source by working hard
- WestCoastJustin 13y agoFor anyone that is interested, Sidekiq was featured in a RailsCasts episode #366 [1]. [1] http://railscasts.com/episodes/366-sidekiq http://railscasts.com/episodes/366-sidekiq
- t0 13y agoLoading very slow. Mirror: http://i.imgur.com/5eq7rZk.png http://i.imgur.com/5eq7rZk.png
- zem 13y agoReally impressed by how customer-friendly the licensing is: > How many licenses do I need to buy? > Every organization that runs Sidekiq Pro for their own benefit must purchase a license. > GitHub runs *.github.com. They need one license for their entire site. > GitHub sells GitHub Enterprise to various customers. They need one license per customer because the product is installed and run locally by the customer. > Pivotal Labs builds websites on behalf of customers. They need one license per customer because the customer is the one getting the benefit of Sidekiq.
- bdcravens 13y agoI'm a big fan of Sidekiq, and the model he's chosen. Some of the features implemented in the free version (retries with logarithmic logic as to timing, scheduled tasks) could possibly in a paid version, and the price point for the Pro version ($500) is a bit bold.
- encoderer 13y agoRetries with an increasing backoff is literally 1 LOC. It's always fascinating to see cases where cost/benefit is just minuscule like that.
- karamazov 13y ago$500 for an entire corporation is very low - that's one day's worth of developer time. How much developer time would you need to replicated Sidekiq?
- patio11 13y agoI think there are likely a variety of contractual options other than "24/7 phone support" which businesses would be happy to pay for, on an ongoing basis. For example, you could charge $500 plus $100 per year for "maintenance", and not be any more specific than "the software will be maintained in an ongoing fashion", and now you won't be starting from $0 next January 1st. As someone who has started from $0 every January 1st for the last 7 -- don't do it! It sucks! Congrats, though -- Sidekiq is one of the few commercial OSS offerings that I know of doing well in the Ruby/Rails ecosystem. Most of the others just act as friendcatchers for consulting, too.
- WestCoastJustin 13y ago> charge $500 plus $100 per year for "maintenance", and not be any more specific than "the software will be maintained in an ongoing fashion" I work at a mega corp, and I cannot echo this enough, we have tons of "maintenance" agreements for hardware and software of all sorts, $100 is not even in the noise level for some of these agreements! Software needs to be maintained, get this done upfront, it is a total pain in the but to have something fail, and then try and push through a purchase for "maintenance" after the fact. This means that I have to get a quote, get my boss to sign off, get purchasing in the loop, etc, etc. Just have this as an annual agreement and it will get processed like everything else. 10 years later, someone will ask, who uses this, and no one will know, and it will get renewed, just because they don't want something to fail ;)
- eru 13y agoAnd since the bureaucratic overhead is so high, you better ask for enough money to make it worthwhile.
- GFischer 13y agoRemember the often quoted advice from Joel Spolsky: http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... Enterprise sales cycle is EXPENSIVE, so, while the actual cost of your service may be much less, you have to pay for the ten airplane flights and meetings and hotel rooms before you close your sale (and add a few one afterwards for good measure). also http://cdixon.org/2010/02/06/selling-to-enterprises/ http://cdixon.org/2010/02/06/selling-to-enterprises/ "Enterprise-focused VC’s sometimes refer to products priced between (roughly) $5k and $100K as falling in the “valley of death.” Above $100K, you might be able to make a profit given the cost of sales. Below $5k you might be able to market your product, hence have a very low cost of sales" I'm not sure if all of that advice applies to a Ruby gem... big freaking enterprises don't use Ruby that much. That said, it's a great success story :)
- javert 13y agoIs there a good data source of open source-based jobs and how to get them? Clearly there is a massive open source economy. I would like to understand that better.
- lgomezma 13y agoI'm also interested on this!
- javert 13y agoI really wish someone would do a PhD dissertation on it, or write a book on it, or something. I guess it's likely that there's something somewhat like what I'm looking for out there already.
- gregmolnar 13y agoI don't know such a source but you may be able to find some after some research. Like Spree is an open source product but the company behind it employs developers to work on the product.
- shmageggy 13y agoHaving a large picture of someone's face staring at me next to the text distracts me, creeps me out, and makes it very difficult for me to read. Lots of tech blogs have this anti-feature but this one is particularly egregious.
- hcopr 13y agoIt's encouraging to hear this can work. Of course that guy was extremely fortunate to be making something everyone was interested in, so it's still a risk (but then again: what isn't?).
- concerto 13y agoYou say fortunate, I say foresighted. In any event. I imagine that he started building it to meet his own needs and the growth of revenue now is a happy side-effect.
- hcopr 13y agoIt's probably always a bit of both, but I'd say that level of success doesn't come without the necessary context (several things have to conspire for it to happen). Anyway, it's an inspiring story!
- mperham 13y agoThere was no fortune to it, it was years of OSS work on lots of Ruby projects followed by a realization that existing solutions were terrible and I had the knowledge to make something better. Nothing like years of experience to put you in the right place at the right time.
- spidaboy7 13y agois it me or the link is broken?
- msmithstubbs 13y agoIt's loading very slowly. Try: http://www.mikeperham.com.nyud.net/2013/10/01/how-to-make-100k-in-oss-by-working-hard/ http://www.mikeperham.com.nyud.net/2013/10/01/how-to-make-10...
- patrickmay 13y agoI wouldn't know how to remotely determine if you're broken.
- egil 13y ago"How to make $100k in Open core" would be a better title imho. After all, he makes his earnings from the pro additions, not the open part.
- wellboy 13y agoSo how do I make $100k in Open Source now?
- geff82 13y ago"Making Money in Open Source" can have several meanings. Selling software is just what most people think of when reading the title. I myself can say I made about $150k in Open Source this year. But it wasn't by selling software, it was by doing freelance jobs and consulting that involved free software only. Money wasn't coming in on autopilot, I had to get up every day and go to work at several places. But for me, free software is the reason I live a very comfortable life, doing things I love to do. It just isn't selling software, but everything else around it. I always tell my friends that I am the perfect example that Open Source brings in more than enough money.
- chc 13y agoI can't figure out how the license on the software is relevant to this story. It seems like you could just as easily tell this story to relate how well a lucky money-making charm works. The charm did not make you money; the hours you put in consulting did. I mean, this doesn't give me any reason to open-source any software I write outside of a specific contract to do so.
- mmahemoff 13y agoCharging a flat rate ($500) per company is leaving a lot of cash on the table. Have you considered a tiered model based on number of servers in use? As well as increasing fees from Megacorps, the flipside is you could also offer discounts to non-profits, early startups, and so on, and in exchange for links on their homepage.
- deleted 13y ago[deleted]
- VLM 13y agoThe authors article is good although it misses a tiny little detail when calculating hourly costs. Its not just his $100K/700 hours = pretty good, its also his customers thinking, hmm, it took a specialist 700 hours, so it going to take our busy guys 1000 hours part time, and our guys are already busy, and he's only asking $500, thats a bargain at 50 cents per hour to replicate... Now if you start demanding $5/hr from each customer then the outsources in India are going to start eating into your sales when they take the work inside or just figure out a work around that doesn't take 1000 or 700 hours. Another interesting issue is signing budgets. I have no use for this particular example but my boss can sign off on $500 at pretty much any mega corp I've worked at, but if you demand annual auto-renewal ongoing charges or get into the mid 4 figures suddenly you have to convince a heck of a lot more people than me and my boss. If you're charging more than a conference or a training class, or you're demanding annual payment, its going to be a harder sell for megacorps. Sure the code monkey and his boss might love it, but now you need to convince additional bean counters who think ruby is a precious stone and its all downhill from there. You could try to corporate speak market it to get past the bean counters with lots of babble about proactively leveraging the synergy of the enterprise cloud platform but that risks repelling the code monkey and his boss, a fine line to walk.
- davidw 13y agoHe made that money with proprietary software based on the open source software. No scarcity, no money, it seems: http://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity http://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity
- jakobe 13y agoBig thanks to the author for posting this, and for including some actual numbers! This is also exciting because it shows that you can make money directly with an open source product, instead of making money with services surrounding a product.
- mperham 13y agoAuthor here, thanks for the kind words. Always nice to wake up to a DDoS of my site at 2AM. :-) Recurring revenue is a pricing change I'm seriously considering, I just don't have a payment system in place that can manage my customer list and handle the annual CC charge.
- karamazov 13y agoTry Stripe. They're easy to integrate and handle that with no problem.
- purephase 13y agoJust have to say, Sidekiq and Dalli are two gems that I view as essential in the Rails toolkit. Thanks for your work in those areas.
- justinlilly 13y agoYou might check out recurly.com. Very solid reporting on the backend.
- mariusz79 13y agoFirst, the title is simply wrong. The OP did not make 100k with Open Source, he made 100k selling something that's an addon to his LGPL based offering. Another part of the package is a commercial license bundled with his software. Of course there is nothing wrong with that, but saying that he made money in os is just plain wrong, IMVHO. >>In nine months of selling commercial licenses, I sold 33 for $1,650. If you figure I spent 300 hours building Sidekiq, that’s less than minimum wage. Result: failure. Second, If the money was only reason why the OP build the software then I have to agree that this is a failure. If on the other hand sidekiq was used in some of this own projects, he should also calculate how much time/money he saved by creating it.
- Confusion 13y agoWhy do you object to calling this 'making money with Open Source'? I agree that "making money by developing and selling closed source extensions to open source products" is 'making money with Open Source'. Especially considering he also developed and maintains the OS product.
- 6cxs2hd6 13y agoBecause it seems similar to claiming prostitutes make money by greeting people and chatting. Although they do greet and chat for free, what they actually do for money is different. Note: I believe prostitution is a morally acceptable profession for consenting adults. Therefore I'm not choosing that analogy to be pejorative to the OP; I'm choosing it to be blunt. IMHO the OP is doing nothing wrong, and more power to him. I just agree with GP that the characterization of it as making money "from" open source is confusing.
- DennisP 13y agoWell for legal reasons, many of them do claim to charge money for the greeting and chatting, and whatever two consenting adults happen to do after that is their own business. It's true that they probably couldn't charge for the greet and chat if it weren't for what they do for "free." It's also true that Mike Perham probably couldn't charge for his commercial work, if not for what he did for free. Admittedly this is a rather loose analogy.
- justin_vanw 13y agoThe title of this article is the opposite of what the article says. He made almost no money with open source. He made tons of money by withholding features from the open source library and instead only offering them under a commercial license as an add-on. Since this is itself a violation of the LGPL, anyone using the Pro version isn't even using open source at all, as both the original and Pro enhancements are at that point licensed with a commercial license. An accurate title would be: "How to make $100K by writing an open source library, waiting for a lot of people to build a product using it, then holding back essential features until they pay you money, which they will do because they are suffering lock-in and it's way cheaper to pay you than pay a developer for dozens of hours of work to adopt an open source solution."
- ceejayoz 13y agoIf they were "essential features", why were people using the library before they existed?
- jes 13y agoIf a lot of people were able to build products based on his open source library, it seems wrong to claim that anything he held back was truly essential.
- 3pt14159 13y agoSomething can be pay for use and open source. What he did here was totally fine. Sidkiq is amazing, and what it replaces is kludgy. If Sidkiq or Riak want to make a version that is specially geared for people that need software to scale then everybody wins. The people at scale win because they buy the software for peanuts and they were able to do so only after hitting product-market fit. The people starting startups win, since they get well designed software from someone that has self-interest to keep it going. I see no problem with this whatsoever. It isn't like the at-scale version of Sidekiq would ever have been built if it hadn't been for the cash. The only thing I would add would be that maybe he puts a sunset clause in there that auto-frees the source in a year or two. That way people won't waste time rebuilding the at-scale components.
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- quaffapint 13y agoSo who provides support for the base product? My concern with the free and 'enterprise' version of products, is support for the free. You could say just community support, but then if things aren't getting fixed either you end up fixing them or your product gets a bad name. If you provide email support, you're tying a lot of your time to the free product. Just curious how others handle this.
- chc 13y agoI'm sure that he'd be willing to offer support if you wanted to pay for the support.
- shutupalready 13y agoIf your story is true, then stop talking about it already! First, Since you're in the U.S.A., you'll be getting into the 40-50% marginal tax bracket with federal, state, and Self-Employment Taxes. If you incorporated in an off-shore jurisdiction, you'll keep all your money. In your situation, it's completely invisible to your corporate customers where you are located. If they're willing to pay random guy in Portland, Oregon, they'll pay random company in Singapore (for example). You could even disclose the existence of the foreign company to the tax authorities. In that case, don't draw a salary or a dividend from the foreign company, and you'll still pay no U.S. tax. Let the company pay for your "business travel", "business expenses", etc. And otherwise just let the cash pile up in the foreign account. Second, I highly doubt you'll gain additional customers through your blog. It sounds like you get customers because they are already using the open source component, and discover they could benefit from the paid component. Your article about the $100k gets you hacker cred, but also draws competition. Blog about the open source component, and keep mum about the dough. Good luck.
- GFischer 13y agoI upvoted you because it's an interesting dissenting opinion, and I've always wondered about whether the upside of being open beats the downside of additional competition. We also don't know whether he paid taxes on the income (I also guess not), and, most importantly, whether his blog post will bring him additional revenue. Do you have many examples where blogging about success brought about competition? Are there big barriers of entry to building what he built? It looks like you'd need at least 700 of developer hours, I wouldn't do it lightly. OTOH if I had found an easy way to beat the lottery I wouldn't blog about it :P
- runako 13y ago>> We also don't know whether he paid taxes on the income (I also guess not) Mike is an upstanding citizen and member of the open source community. There's absolutely no reason to make unfounded claims like this against his integrity.
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- rustybones 13y agoCan someone help me understand whether he's the only one allowed to build a paid service over the open source code, or could anyone technically take away all his open source code and build the same service he provides in the pro. Because if he doesn't have that control, then this is really not making money with open source but rather relying on existing open source to make money
- informatimago 13y agoAs a non owner of the copyright, but beneficiary of a GPL license, you would be allowed to make a derived work (your own "pro" version), and to distribute it (to sell it), but it would have to be under the GPL. In this case, since it is a library under the LGPL, you could make a client product using this library, instead of a derived work, and you could distribute this product under your own terms, but if you provide the library along, you must of course keep this library under the LGPL (and provide the sources of the library). So with the LGPL, you are free to make competiting proprietary products.
- avty 13y agoOr you can join Google and make close to 250k a year as a new grad...
- jacalata 13y agoCite?