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Ask HN: How Effective Is Copyleft with Commercial Licensing at Making Money?

9 points by ghoward ↗ HN
I'm currently building software that I would like to see turned into a business. However, there is plenty of evidence that companies will not pay for what software they use until they realize that there is a problem, such as log4j, OpenSSL, and probably plenty others.

Then there are the cases where companies are outright violating licenses such as the violations of the GPL with regards to OBS Studio by TikTok, among others.

And then, of course, Copilot might be used to launder code.

That leaves me with the impression that companies will not pay if they can get away with it, and getting away with it might even include breaking the law since the little guy does not have resources to sue.

However, there seems to be a glimmer of hope: copyleft licenses with the option for companies to purchase a commercial license. (This is an option for me because I'm writing the code from scratch.) Based on some previous comments (like [1]), it seems that even this may not work, which would be sad. But I thought I would ask before I throw in the towel.

To address things like Qt, obviously, dual licensing makes money for companies because if they dual license their stuff, other companies will pay because they are afraid of being sued be someone with enough resources to win. But as I alluded to above, that's not really the case for an individual.

So I would like to hear your thoughts and experiences about using copyleft with commercial licenses.

Does dual licensing work? Do companies pay?

By the way, by "effective," I don't mean that every company follows the license. All I want is for just enough of them to purchase a license and/or support to pay 2 times the typical developer salary. (I need 2 times the salary for tax purposes.)

Edit: I guess I have a meta-question: when companies violate licenses, how often are they just bluffing? Is serving them with a lawsuit enough? Or will they fight what they know is a losing battle?

[1]: https://news.ycombinator.com/item?id=29524103

13 comments

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vegetablepotpie
You're talking about dual licensing. There are examples of it being used, such as with Qt and MongoDB. Companies will pay for support licenses and to mitigate legal risk. I've observed that large companies are bureaucratic to the extent that it's cheaper for them to buy a license than to spend the money to convince stakeholders in the company that it's not needed.

The issue with copyleft licenses is that you cannot integrate community contributions to your product that were made under the copyleft license.

ghoward
Yeah, I know it's called dual licensing, but I thought that I would be specific because there are other cases of dual licensing, and I didn't want to confuse anyone.

Also, I need to update the post to clarify that I'm referring to making money as an individual, not a company because if a company dual licenses their stuff, other companies will pay out of fear of being sued.

vegetablepotpie
I would consider setting up an LLC. You can do it as an individual, it offers legal protections if you are sued and doesn't double tax you like a C-corp will.
ghoward
Yeah, that is something I will be doing, for sure.
sharemywin
If your worried about it why open source it?
ghoward
Because non-open source does not get adopted and used.
jimmyvalmer
You ask "How effective?" The answer is "not very."

Do this right. Close the source and maintain some semblance of leverage.

ghoward
Closing the source would give me leverage, and I've considered it.

However, how do you get a software project adopted by users if those users (other developers) are so used to only using FOSS?

jimmyvalmer
Only developers insist on FOSS, and we are the worst kind of customers as we find paying for anything a personal affront.

You either need to partner up or become a sales guy who understands "normies" at Fortune 500 type companies. Easier said than done, of course.

ghoward
> Only developers insist on FOSS, and we are the worst kind of customers as we find paying for anything a personal affront.

I think you very well articulated my problem because the software I am writing is for developers.

I like writing tools for developers the most because I'm autistic enough that I struggle to understand the needs and psychology of "normies" enough that I can't effectively write software for them.

However, you are right that developers are the worst kind of customer, and for the reasons you stated.

Maybe this is actually the reason I should not even bother.

> You either need to partner up or become a sales guy who understands "normies" at Fortune 500 type companies. Easier said than done, of course.

My wife is a business type who understands "normies" well enough. She was actually the one who made it clear that a lot of my ideas would never sell. She doesn't think this one would either.

Actually, I asked this question to verify that she is right. So far, I think she is.

Thank you.

hodgesrm
Here are answers to your questions based on my own experience, followed by some questions for you. I have run two open source-based companies.

1. Does dual licensing work? YES. I used it in my previous company and it was very effective. We had GPL V2 licensed software that users could access and use. We had an enhanced version that was enterprise-licensed. We also confirmed that you can defend your rights legally.

2. Do companies pay? YES. The ones that have real money do. Those are the only kind you care about in business, because you aren't going to get money from the others anyway regardless of the license. It's far easier for them to pay a reasonable licensing fee and avoid future problems than to try to scam you.

3. Meta-question: when companies violate licenses, how often are they just bluffing? NOT RELEVANT. Your real problem is somebody trying to steal your business, not somebody using software in violation of the license. Think about models that make that hard to do. BTW you can go after them for copyleft license violations. Make sure you have the right license to prevent misbehavior. GPV V2 does not prevent someone from running a SaaS on your software.

Can you offer your software as a SaaS service with value added features? This is the best way to make money in B2B software and gives you protection against copycats. The usual model is to let people try out the open source version and then run a SaaS version that removes all the pain of operations.

ghoward
Thank you for the direct answers from your experience. That's really what I was looking for when I posted this.

> Can you offer your software as a SaaS service with value added features? This is the best way to make money in B2B software and gives you protection against copycats. The usual model is to let people try out the open source version and then run a SaaS version that removes all the pain of operations.

Well, it's a build system along the same lines as Nix and Bazel. I've thought about offering something like Nix-as-a-Service or Bazel-as-a-Service. But I don't know how attractive that would actually be for companies.

hodgesrm
Perhaps it's more useful then to consider what the value adds would be on top of your product. One obvious addition to build systems is security-related features like source code scanning. People are rightly a bit paranoid about that right now.

Based on the use patterns you can decide whether it's better to run as a SaaS or as installed software.

BTW if you are looking for VC funding for an open source product, the first question they will have is what is your adoption? The pattern VCs are looking for is to find something widely used and monetize the audience. If you can get a lot of people using it and telling their friends you are golden. The other common option is to figure out a service model and bootstrap the business.

Feel free to contact me directly if you want to talk. My email is in my profile. Either way, good luck!