31–40 of 96 posts
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.
>>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.
I 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 Janu…
For a while, we tried making money off support contracts for Phusion Passenger. The amount of money we made with that put us far below minimum wage. It turns out that with Phusion Passenger, nobody needs good support. Some people may have trouble setting it up (mostly people who are not familiar with Unix, and don't have money for a support contract anyway) but for the vast majority of users, Phusion Passenger just works and never stops working. By making our software stable and user friendly, we were essentially shooting ourselves in the foot revenue-wise.
We didn't want to cripple Phusion Passenger to make more money off support, so we ended up selling Phusion Passenger Enterprise which only differentiates on features, not stability. This latter model turns out to be far more successful and has skyrocketed open source development to new highs.
I 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 Janu…
> 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…
First, 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 fig…
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."
I 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 Janu…
Unfortunately, support models only work for a limited set of software. It happens to work for Red Hat. For a while, we tried making money off support contracts for Phusion Passenger. The amount of money we made with that put us far below minimum wage. It turns out that with Phusion Passenger, nobody needs good support. Some people may have trouble setting it up (mostly people who are not familiar with Unix, and don't…
I've learned a lot in those 20 years that made me realize that it's not that simple, but stories like yours make me keep coming back to it.
On the other hand, how hard have you tried to market support contracts?
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.
Earlier quoted context omitted.
> 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…
And since the bureaucratic overhead is so high, you better ask for enough money to make it worthwhile.
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/
"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 :)
The 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 th…