January 9, 2022 by Drew DeVault

How does SourceHut's FOSS business model work?

SourceHut makes a profit, but we are not motivated by profit. I founded SourceHut with the explicit goal of making my free software work sustainable full-time. As SourceHut grows, we aim to expand and generalize this approach. We want to make free software better, and the business is a tool we use to facilitate this.

We have two lines of business which provide us with revenue: the SourceHut software-as-a-service (SaaS) platform, and free software consulting. You can run the SourceHut platform yourself (instructions are available here), but it’s expensive and time consuming to maintain the platform, so most people pay us to do it for them via monthly or annual subscription fees. This model sets up incentives which favor users over investors,1 which gives us an honest focus on user-motivated design (as opposed to profit-motivated design) and ensures that we are dis-incentivized to use unethical means to make our margin, such as selling your personal information. Your payments also provide for the development and maintenance of the service, which we try to honor by ensuring reliable uptime & performance, comprehensive backups, and so on, via a robust operational strategy which is not economically practical for small-scale deployments.

Our second line of business is free software consulting. Free software has eaten the world: it is ubiquitous in all software products. This has created a market for free software experts who have a broad understanding of the free software ecosystem and experience working upstream. We provide consulting services to this market, in which we are paid to write or contribute to free software. Upstream projects we’ve worked on under this model includes software like Linux, Mesa, X.org, Monado, and many others, for clients like Valve Software, Status.im, and Migadu. We have also developed greenfield software for these clients, such as alps, wxrc, and gamescope, as well as improvements to software which our team maintains independently, such as wlroots or Wayland.

We use the revenue from these lines of business to fund free software projects through the work of our full-time employees, of which there are two: myself and Simon Ser. We work at our discretion on free software projects, some of which are not obviously monetizable, for the purpose of making the free software ecosystem stronger as a whole. Sometimes this work ultimately provides revenue — for example, Simon’s soju and gamja projects were developed independently and eventually were incorporated into the paid chat.sr.ht product. We also developed wlroots together (starting before SourceHut was founded), which eventually was the basis of much of our consulting revenue. However, it’s more common that these projects don’t produce a return.

Many of our projects have no profit motive and are probably unmonetizable. Our mission is to make free software better, profitable or not. Projects like visurf or gemini, our upcoming systems programming language, upstream work in Alpine Linux or freedesktop, or sponsorship of projects like OpenStreetMap — none of these have obvious returns for us. We work on them because we believe that they are important. If we were pressed to justify this in business terms, we might say that we are growing the free software market as a whole through this work, or that they are good for marketing (both of which are true), but fundamentally it’s because we believe in free software.

We will be hiring a third full-time engineer in February, who we will introduce to you when the time comes. Following our tradition of transparency, you’re welcome to read the onboarding manual we have prepared for them, which goes into more detail on what it’s like to work for SourceHut. We also occasionally bring on temporary workers to work within specific goals. For example, thanks to an NLNet sponsorship, we will have Adnan Maolood on for the year to help with the GraphQL work. We have also hired contractors for things like consulting work, or for help with some of our independent FOSS projects or upstream needs.

This is how we do business. Does it work?

In short: yes. We will answer this question in great detail in our coming annual financial report,2 but I can summarize it for you now. The books for 2021 are not quite closed yet, but it looks like we’re going to end up in the vicinity of half a million dollars in gross revenue, which I think is pretty damn good for a bootstrapped company in its third year, especially one which gives away 100% of the software it builds free of charge.

There are many ways to finance free software. This is our way, and it works. We fund improvements to hundreds of free software and free culture projects, many which would be otherwise impossible to do profitably or even sustainably. All of our profit has been or will be invested strictly in free software and free culture projects, most of which are not even maintained by us. There’s no “open core” going on here: every line of code we write is genuine free-as-in-freedom software.

I’m very proud of what we’ve built.

We built it with your help. Many SourceHut community members have taken on serious roles in our projects, contributing heaps of code to every project, even maintaining some subsystems, or occasionally entire sourcehut services like hg.sr.ht, in their spare time. We have had community contributions to thank for many improvements in functionality, reliability, documentation, and more. Even the simple choice to host your projects with us is an investment in our community, and one which can be difficult to make against the temptations of more popular nonfree or semi-nonfree platforms in the market like GitHub or GitLab. I am grateful to everyone who has had a hand in this success. Thank you.

Making free software better means making it better for everyone, not just us. We want to make free software profitable for you, too. One of our upcoming products is “hire.sr.ht”, which will provide an index of independent free software contractors to solicit clients.

Mock-up of a profile on this service

(click to enlarge)

I hope to see this platform used for a variety of free software work. It could be weekend hackers who maintain some projects in their spare time and get paid by users to implement the features they want, or weekend hackers who get paid by users to send patches to other projects. Or, you could be working on a FOSS project of your own and hire someone with a relevant skillset to help you get it started. Maybe we’ll see full-time free software consultants listed here, taking on larger long-term engagements to work on free software for businesses, or even free software consultancy co-ops or businesses like SourceHut itself.

We plan on offering this service as part of your normal sourcehut subscription fee,3 without taking any commissions or trying to control the line of communication between you and your clients. You will write your own contracts, negotiate with clients directly, handle billing and payments without our involvement, and retain complete and independent ownership over your work and client relationships. We will support you in figuring these things out, and I hope to see an organic community of mutual support form between contractors (and clients) to provide these things for each other, without tying your livelihood up under SourceHut’s control.

Like the rest of SourceHut, this is an open source project, and we’re developing it with you as much as we are developing it for you. We could use your help in building this. If you’re interested in working on this project, please reach out. There’s also a grassroots community project to build out domain registration and DNS hosting services on SourceHut which could use your help. If you have any other ideas, I want to hear them. If you have time, passion, and ideas, we’ve got servers and a community. Let’s talk.

  1. Which we don’t have. Investors, that is. ↩︎

  2. If you’re wondering where these went, this is the answer. They’re too much work to do quarterly, especially as our business situation was complicated by the recent introduction of a Dutch business entity and our growing consulting revenue. Sorry that these stopped for a while! I will write up the next one soon. ↩︎

  3. Including for users who need financial aid and rely on our subsidized or free subscriptions. ↩︎