Is donation-supported free software a viable business model?

Question

I'm working on a software product, and to mitigate piracy problems I was thinking about offering the uncrippled software for free, but requesting donations and offering various things (like website access and program enhancement files) in return (a la PBS and NPR). If the program is popular enough (and I'm assuming that a free product would get more use than one that costs money, which might not be true), it would also drive traffic to the website, and I could sell ads and ancilary products.

I've sold shareware for years, and my operating assumption has always been that people who steal my cracked software wouldn't pay for it no matter what I did, so I've never put more than the minimal amount of copy protection into my products anyway. What I do use (PayPal, unlock code via email) is enough of a pain for both me and the clients that I suspect it chases off a high percentage of people who might otherwise use the product regularly and eventually get around to giving me a small donation.

Does giving the software away and then begging for money sound like a good plan?

Answer 1

This depends on your end game? If you want to guarantee profits, then NO it isn't a good plan.

If you want to offer the product as a marketing tool for other aspects of your business, to gain exposure to yourself, and maybe make a buck or two, thats great. But I wouldn't count on it being a HUGE money maker for you.

I personally find a lot of value in providing free items for the exposure/traffic that you mentioned, but I never count on those items making me money, as really I find that donations are few and far between. My $0.02 anyway.

Answer 2

It depends on your target audience. If you are producing something which is likely to be used by hobbyists, then your model may have some merit; I've always paid for software at home that is useful. But you won't make money.

If you're aiming at other businesses, it's wrong:

1. The software won't seem 'professional' to some because it's shareware.
2. There's no incentive to pay when it's being used already.

Especially in today's climate - people are not going to give money away if they don't have to.

Answer 3

Leon Bambrick aka secretGeek (TimeSnapper and World's Simplest Code Generator) calls it "busking", rather than "begging".

Answer 4

I think that the truth tends to be that

A) folks like to pay nothing rather than something; and

B) few people make donations for 'free' software; and

C) no matter what you do, donkeys will find some way to steal from you.

I don't think I'd use that marketing strategy if I were hoping to make any money off the product. It might drive folks to your site where you can make money in other ways but even then, I'm not so sure.

Is the key-unlock thing really that big of a pain? I buy plenty of software that requires a key and it has never been a deterrent to buying it. I rather like the 30-day trial model where I get to mess with the tool (say, Photoshop) and then buy it if I find it worthwhile.

Just my opinion.

Answer 5

Peoples mileage may vary but I'm going to say No.

If what you are looking for is to make a decent salary you are going to be hard pressed to achieve that with "donationware".

I had developed a utility for a certain MMO and made it available as donationware. I had thousands of users and I provided free support, updates, etc for around 5 months. I made maybe $900 in those 5 months from donations. I was fine with this because I wasn't looking for money.

However, after those 5 months I revamped the freeware product, added some new features and charged $19.95 for it (anyone who donated any amount got a free license). Within 2 months it had taken in $34,000 from sales and was making more money from the small hobby project than I did at my job. Sales have dropped off somewhat now but it is still far, far more of a supplement to my income then when I was simply donation only.

Don't get into freeware/donationware for the money. If you want to give away your software then give it away but don't expect a significant amount of donations for your work based off the number of users you have.

Answer 6

Begging doesn't sound any better than selling licenses. Therefore it doesn't sound a very good marketing strategy. Many people aren't greedy or selfish, but they neither recognize a random person in the web as a person.

I'd try sell services. For instance if the software is production stuff, you could try sell next kind of services:

• Installation of the software for the company.
• Improvements to the software.
• Online teaching to use and apply the software.
• Consulting services.

For the games, I don't know whether there's some other way to achieve revenue than begging or selling licenses.

Answer 7

Regardless of the arguments I've seen, I've still yet to be convinced "Business" and "Free" can be used in the same sentence viably when it comes to making money with software.

And no, I didn't mis-type. Let's just be honest that "Donation" and "Free" mean the same thing in the software world. If it's something you can't count on, then you can count on nothing and only allow yourself to be surprised by the occasional 1/24 tank of gas someone may "donate".

Even though I have a beautiful wife and 5 children, I fail to see how even single folks can satisfy the financial requirements necessary to keep the electricity on let alone live a decent life while focusing on that which renders no capital.

To me, "Donation" will always mean "Free". And "Free" will always mean "Free Time" that one has that can put into the project. Unfortunately, my bill rate and current client base doesn't allow me the freedom to have "Free Time".

And then again, with all that said, my feelings on the subject are probably more about my ignorance on the subject than what really is. Still, charging for something valuable seems the quicker way to approach one's goals than starting out for free.