Hello!
This is yet another step more into transparency we want to have with you all ;)
How it started
Open Classifieds LTD is a company that develops Free Open Source Software, everything started like a personal hobby. But rapidly due to high demand and more than 16K sites running, it became impossible to run everything while having a normal job. For more than 3 years I was developing our software giving support and having a full time job at other companies. I still give consultancy to other companies and I am a shareholder at TuManitas that uses many components developed by us and vice versa, without them none of this would be possible. Thanks.
Between all this mess of working and keeping Open Classifieds operational, I always felt that I had an obligation to do more for the thousands of OC users…but struggling to make a consistent stream of revenue. Donations didn’t work at all.. So around 2010 I decided to start our professional support services, some people hated it, but it was a “necessary evil”. I was offering professional support and some “premium themes” all in one package. it wasn’t a major success since I barely made enough to cover my bills and monthly expenses…
Taking the leap!
Summer 2012, there’s this moment in my life where I decide to go solo and start my own company in Spain, I had a few good clients and I was able to make some good money doing technical consultancy for them, and I did! From that moment on, I released 1.8.x version to improve many maaaany things in the software. The result and the feedback was great. Clients were increasing rapidly, but still not much revenue (same as earlier) but with bigger workload… I wanted to improve and add more features to OC but it was impossible with current technology…so in late December 2012, I opened the company OpenClassifieds LTD and I hired Slobodan to help me out and used some money I had saved from the sales of this years to pay salaries, designers etc… In April 2013 I stopped doing consultancy for other companies except my other company (TuManitas) to focus fully in OpenClassifieds LTD.
After a few months of intense work and hiring Ewa to help us with content, we launched 2.0 version. From there on and after improving many things, such as the website, support and hundreds of other things, we found that we’ve built a profitable company! I want to be honest here, we have really low salaries and I am making lot less money than when I work for others…but I love it ;)
If you read all of this thanks! now going on to the point of the post :P
What’s Open Source for Profit?
To make it short and clear, are companies that release Free Software hoping for an economical benefit out of it. If you want to read about it check this wikipedia entry.
At Open Classifieds we use dual licensing, so we have GPL v3 license for our core and our themes have a private license without any kind of encryption so you have full access to the code.
Here are examples of some companies that are Open Source for Profit; Android, WordPress, Zend Cart, Magento, Prestashop, Ubuntu, Red Hat, MySQL ..
How we make money? $$$
We have been trying many things…and none of them worked really good except for providing awesome web hosting through an affiliate … And by combining the various methods the revenue is not so bad.
Premium themes
We invest money paying designers to do cool designs for us, or we buy paid themes with extended license (that allows us to redistribute) to create our themes. Currently 25% of our revenues come from this source.
Consultancy services
for a long time this has been a really good way of making money for us, customization of your theme, design, logos, or even business consultancy… 35% or revenue comes from this method, and this is where we get most of our extra salaries from, since we do it after working hours.
Hosting affiliate
I’ve discovered this alternative long ago but till last year I never saw the true potential of it. The idea behind it is pretty simple: We refer customers to the hosting company and they pay us a fee.
From here it seems simple, but there are many hosting companies out there that have affiliates programs…. Good thing for me was that I have literally tried hundreds of hostings for clients, so that narrowed the list to few hosting companies to talk to…. Funny part most of them didn’t even answer to my demands…who were we anyway? only a couple answered to me and we started testing…we had a rough time with some of our affiliates in the past…for real do not waste your time, go for real thing and do this with serious people. We had payments problems, commissions disappearing and many more awful things I am sure you don’t want to suffer..
Also sales were not helping much…so I started to wonder…what if we offer a little bit more…So we built the following package to claim after the purchase of any hosting with us:
- Free Premium Theme (even the most expensive one $130)
- Free 1 Click Installation
- Free Support for 1 year
- 1 Domain license
We did this and….sales started to grow like crazy! yeah! nailed it! 40% of revenue is hosting affiliate and our most important stream of revenue.
Since then we’ve been improving the integration with our services and we have really good relation with Inmotion managers, helping us with anything we ask them and providing great support to our customers.
Because this is not about getting only freebies (which is awesome and they will give you even more), it’s about having a reliable hosting that will help you start your next classifieds empire without loads of crazy expenses ;)
Advertisements
I wanted to do something like mobile phone apps do, add some advertisements in their free products and earn form it, but seems everyone “out smarted” us by removing them as our footer link….I think 1 month we got $20 from Adsense!! Then I tried and developed a platform of my own thinking of covering this gap…but it is still not working as I expected..
Donations
This really didn’t work for us…we have donation buttons everywhere..last donation one month ago was $1. What are we doing wrong?
Why not SaaS?
I had many times that question in my mind…why not? but why yes? it goes a bit against my principles…I want the data to be yours, not ours.…and that’s quite difficult…so we are no in there yet and our 1 click hosting solution is going pretty well…you own your data, you get awesome hosting and I can sleep deep at night not worrying about servers or anything else…
How much did we earn in 2013?
In 2013 Open classifieds was doing very well, after paying the expenses, VAT and salaries we still had a positive amount at our bank account! (waiting for accountant confirmation).
Best month in revenues was September 2013 and worst was April 2013 , we didn’t cover costs that month…
Luckily we only had few monthly expenses including:
- Server
- Email Marketing
- Accountant
And then we have the biggest part that is salaries, all of us work as freelancers and salary is variable depending on few factors, but for you to have an idea my salary is just enough for me to have a normal live.
How people and you can help us?
This has never been possible without any of you…clients, readers, donators, translators, and the greatest FOSS developers…
We got many things from people that helped us:
- Free offices to meet whenever we want at TuManitas
- Free hosting from InMotion for our smaller sites
- Developers that helped us and those that developed many of the other FOSS pieces that makes Open Classifieds a reality
- Collaborators, translations, code review, testers….
- And the best of all to move OC further…code sponsors
What are Code Sponsors?
Imagine you need a cool feature for OC…you contact us and we give to you a budget. Let’s say $1000 to create the custom fields (real case), so If I tell you that for $500 we will do the job with the only condition that we can release that code in our core as GPL…you said yes?? that’s a big win for us. We get some cash (not much but covers expenses) and we get to release the work for others to enjoy.
We have done this successfully with many parts and pieces, like the Mobile Theme, Custom Fields, Social Login, Subscriptions, and Open eShop entirely developed from our pockets from the benefits we got!
To all of you THANKS and BIG APPLAUSE! Love you really!
Last thoughts…
It is absolutely possible to build FOSS and make a living from it. Maybe, it would be more difficult for us to become millionaires, but that is not our objective, we really want to help people and if that also can make money for us …a dream comes true!
Thanks for reading and leave a comment below if you have any questions or ideas!
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