Why Sponsorware is not the answer to monetize open source

Business May 09, 2020

Sponsorware is a new concept to make money by working on free, open-source software. By doing Sponsorware, you only release a new library or framework for free when you reach a certain amount of GitHub sponsors, but your sponsors get early access beforehand. Caleb Porzio introduced this concept, and he is using it quite successfully for his open-source work. You can read more about the concept here.

Sponsorware became possible in an accessible way as GitHub introduced donations and sponsors via their platform. Everyone with a GitHub account can become a sponsor or can decide to accept these donations. Before GitHub introduced sponsors, other developers successfully used Patreon as a platform to accept money for their work. Patreon has the same model and acts as a platform to find creators whom you can support.

A while ago, many people started a Patreon account to find people who support their work–but they rarely found some. Why does it happen that companies like Spatie, who develop and maintain hundreds of high-quality open-source packages which have millions of downloads, don't find sponsors? Their Patreon page only makes $181 a month. Why can we see the same behavior on GitHub Sponsorships now? Why do some people still make a sustainable amount of money on Patreon or GitHub? Laravel and Vue.js make $10.000 and more monthly.

The factor that comes into place is long-term value. Sponsorware gives you early access to something that you can also get for free if you wait a bit. So even if you decide to become a sponsor and get early access, you don't get any value out of your monthly recurring payments when the thing is published for free. Sure, you might continue sponsoring until you reach your value threshold for the thing you got your hands on early, but you question your sponsorship quickly.

Making money on GitHub or Patreon works for people who provide continuous value to their sponsors. If you sponsor Laravel or Vue.js, you are not only giving them money for their open source work but get something else that provides value over time. Both frameworks are selling something with high value. They sell a placement of your logo on their website in front of millions of visitors. So people who sponsor them don't do that for something that they can have for free, they advertise in front of millions of developers. To recap this: They are not getting paid for their open source work, they sell something that people want to have.

Sponsorware works because people pay for early access–and this is what Caleb and others sell. I don't believe this is a sustainable model because once everything is publicly available for free, there is no value in the sponsorship anymore, and people eventually stop sponsoring.

It is also unlikely that you will develop and run an open-source project that is used by so many people that your traffic is worth so much that you can sell spots for logos on your documentation. There are only a handful of projects that are so successful, and it took them years to get into that position. So how do you make money with open source?

Sell something that complements your open source offerings.

Laravel has a whole ecosystem of services and products that people can buy. We at Beyond Code fund our open source packages by selling a successful course on package development for PHP and Laravel.

You don't need these things if you want to use our packages, but we are selling our expertise in package development with a video course so that more people can re-use the things they build.

This is a typical pattern that you can see in many places. We provide the Ignition error page for free, but also run Flare–the Laravel specific error tracker for your production environment. MaatWebsite provides Laravel Excel, the most used open-source Excel package for Laravel and offers a premium video course about the topic so that you can learn about it for free by using the documentation and fiddling around or use the premium option to have someone who does that for you and walks you through it. Even Caleb Porzio sells a premium video course on one of his open-source frameworks to his sponsors. These complementing premium offerings usually make enough money to fund sustainable development and maintenance on the open-source part.

So if you want to make money with open-source, don't rely on people's goodwill. Offer something that complements your open source products and that people can buy. It can be a book, video course, additional software, or even consulting–but offer something only available for paying users.

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Business, Money, Pricing

Sebastian Schlein

I’m Sebastian, Managing Partner, Developer and Consultant at Beyond Code. I write about entrepreneurial topics for freelancer, agency owners and people who want to become either of these.