I just realized I never posted about the “life changing event” that occurred April 1st on this blog. To quickly recap: as of April 2014 I became CEO, Sole Proprietor and Sanitary Manager of Caelum, a software product company that produces Zed. The business model that I cooked up is experimental: everything is open source, but I ask users to pay without getting anything back other than the fact that they contribute to the cause of Zed development. It’s been 2.5 months, time for a small update.
So, how is it going? Over the past 2.5 months I’ve received around $1,000 in total through Gittip and one-time donations. $1,000 seems like quite some money for an open source project, and it is — but not if it’s supposed to be your main income. Sure, I live in Poland and the cost of living here is low. But not that low.
Now there are many possible reasons why I’m not a millionaire yet. From the top of my head:
- People don’t want to pay for something they can just as easily (actually, more easily) get for free (that is: Zed).
- Not enough people use Zed to make it profitable (it will always be a low percentage of users that actually pay).
- People don’t like Zed enough to pay for it.
- Dude, you started this 2.5 months ago, don’t expect miracles.
Reason 1 and 4 are my biggest worries, the others are easier (but not easy) to fix.
I suspect most people expect something tangible in return when they pay money for something. More specifically: they expect to get something more than when they’re not paying anything. Even more specific, many people probably expect that if they pay something that they get something more than everybody else who’s not paying — they’re the one that should profit from their purchase, not others — this isn’t charity… is it?
During a family vacation in the Swiss mountains we found a small cabin with a table full of food: sausage, bread, cheeses. There was a note with the price list and a box to put the money in. There was nobody around to check if you paid for what you used. If you wanted you could take all the food for free. But of course, we didn’t — we paid the full amount, perhaps a little more because we wanted to support such trusting people.
Zed’s business model is similar to this. Will I hunt you down if you don’t pay? I won’t — unless I pivot my business to the software license hit man realm. However, value of software is perceived differently than bread. For bread you need ingredients that need to be grown, processed, baked etc. For every bread you produce, you have to repeat this process, whereas the same is not true for software. You just have to write software once and virtually unlimited people can use it at practically no extra cost. If you eat a bread and don’t pay for it, nobody else will pay for that bread. If you use Zed and don’t pay for it, well, nothing lost — it didn’t cost anything to produce that once copy anyway. Right?
Which brings me to reason 4: it’s only been 2.5 months. That’s not a long time. Maybe. However, I don’t have infinite money nor a multi-million VC investment that can keep me going for years. I promised my wife I’d be trying this for 6 months and if it wouldn’t work, I’d go back to a “regular job.” That means we’re almost mid way. At this rate, things aren’t looking great. I never specified exactly what I expect my income to be, but about 10x what the project is bringing in today would be desirable — and even that’s not half of what I made before.
So yeah. It’s tough. It’s not just tough to try out a new business model, it’s also tough to do it by yourself, without a co-founder or employees. I have to make all my own decisions. Nobody calls me on silly idea. I once read that the start-up incubator Y Combinator does not or rarely accepts single-founder companies and I now understand why: making the right choices without another person just as involved as you is tough — dare I say close to impossible — for a person without a track record in this area.
For instance, here’s an elemental question: what should I do today? Some options:
- Build headliner features. Features that make great headlines on TechCruch, the Next Web and so on, potentially attracting a slew of new users (and with that paying users).
- Fix bugs.
- Write user documentation.
- Write code documentation.
- Make small iterative tweaks.
- Refactor ugly code.
- Write blog posts with Zed-related topics.
- Build alternative for-pay versions/features trying to increase revenue.
In a team of people you’d assign people to one or two of these tasks. You can emulate the same with a single person, but very quickly you start to get spread really thin and the user-visible progress is super small. And the overhead of constantly switching context between these is huge.
So yeah. This isn’t a walk in the park. But life isn’t supposed to be.
Or so I hear.