How is Hoodie funded?

posted by Jan

Funding Open Source projects is a topic of much discussion. After talking about why we are building Hoodie, we thought we’d share the story of our experiments with ensuring Hoodie’s progress.

Hoodie is of course an Open Source project, so plenty of peoples’ spare time goes into it. Nevertheless, we believe that making funds available for an Open Source project makes for faster development and happier developers, who can work on Open Source and get paid for it.

As such, there are multiple different ways that Hoodie makes money. They are all based around the fact that the development team does not have to make money from Hoodie at a large fixed rate, but can substitute their income with other, freelance work. The only downside then is that Hoodie development slows down, so we are trying to pay everyone regularly.

Personal Time

As an Open Source project, Hoodie still sees plenty of volunteer time going towards its development. This includes the core team members as well as a healthy, and growing group of Open Source developers. In addition, the core team can, at any time, opt into freelancing opportunities to make ends meet.

Donations

Hoodie was very fortunate and received donations from both NLnet and Mozilla to advance Hoodie development. We continue to look for opportunities like this, as they give us the most free time to work on Hoodie for the least amount of distractions.

Sponsors

Last summer, we started our sponsoring programme, where we would sell sponsoring of the Hoodie project on a weekly basis in return for helping the sponsor out with getting their word out, be it for a project or recruiting. It takes some effort to recruit sponsors and a reasonable weekly sponsoring rate isn’t a whole lot for a team of six, but it helps to establish a reliable baseline revenue.

Customers

The Hoodie Firm, consists of the original Hoodie developers and it offers building Offline-First web app prototypes at an extremely fast pace. Hoodie allows us to keep this promise, especially when intermittent connectivity is an issue, few other solutions are as easy to work with out of the box. Customer projects usually help maturing core Hoodie along the way and the profit goes 100% towards Hoodie’s continued development.

Gittip

We are just starting with this, but Gittip seems a popular choice for supporting Open Source people and we thought we’d give it a shot. We’ll be sharing our experiences on this as soon as we’ve gathered some. As a rule of thumb, we plan to re-gittip about 1/4 of our revenue here to other gittippers.

What are we building

You might ask why we don’t pursue any investment. Getting outside capital usually means giving up a chunk of control and we are absolutely not willing to do this. Outside investments are also often a purely profit-driven business decision which tend to follow a rather unhealthy growth path and are generally centered around a return of investment for someone who doesn’t care about Hoodie or the people working on it.

Making rich people richer is not a future we want to be working towards. Instead, we are working on building a sustainable, diverse, bootstrapped business whose goal it is to advance the Open Source project we all love. We can focus on employee happiness by actively recruiting a diverse group of people, allow flexible working hours and locations, a 20-30 hour week as well as family-first scheduling and -planning.

Crowdfunding is another option, and others are going down that route successfully, so we are not trying to discredit the approach here, but for us, it shares a downside with regular investment. You get a large chunk of money that will eventually run out. Unless you are very disciplined, that money will distract you from creating revenue for the time after the initial chunk is gone. To make sure we don’t fall into that trap, we’d rather force ourselves to create a healthy revenue stream first. We might opt into crowdfunding at a later stage, should we require a larger chunk of money, but we want to have a solid base to work from before we do that.

All this, we believe, will allow us to support a healthy Open Source project that is loved and supported not only by people within the Hoodie Firm, but by other Open Source contributors as well. And we believe that this can support a project for a very long time.

We are still a long way away from the ideal we are imagining, but we are taking one step at a time towards it and so far it all seems to be working out. And we are constantly learning from our experiments.

It is great to know that we are not alone, Ghost is built with a similar model, albeit with a crowdfunding approach, that seems to be a great success.

Expect to hear more about our experiments in the future. If you have any questions, please get in touch.

And if you would like to support Hoodie in any way, either with development, documentation, QA-time, financially or by hiring The Hoodie Firm, please contact us. <3