What's your monetization strategy?

When you first start an open source company, monetization is often not the most pressing concern — at least if you have venture funding. Many venture-backed open source startups take their sweet time before worrying about revenue, focusing instead on building community and adoption of the open source project.

At some point, though, you have to figure out a monetization strategy. Do you:

  • Sell support

  • Sell services (not support)

  • Sell an enterprise distribution with a fancy UI and ‘team’ features

  • Sell a managed service

  • Sell a SaaS / cloud-hosted version

  • Sell bundled versions of open source software that you commit to keeping updated and free of security bugs

  • Sell a product that is not competitive to, but complementary to your free open source software (this is a flavor of open core, but not quite the same as going ‘enterprise edition’)

  • Do some license mumbo-jumbo with ‘copyleft’ licenses, so that all commercial entities will have to pay you from now on — whether or not this counts as a ‘real’ open source company is up for debate, and I’m not entirely sure where I stand on it, to be honest.

Am I missing any of the monetization options? I suppose I’m missing “ask for donations,” but I don’t think that’s a real strategy for a commercial entity, or even for a single person trying to make a full-time living from an open source project.

So which one do you choose? There are pros and cons to each of these models, but the point I want to make is this: You have to choose at least one, and it should be after evaluating which one is best given the strengths, weaknesses and values of your project.

Emily Omier