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So, have you ever wondered how these
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free or open-source software actually
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make money? I mean, millions of people
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use this software, but still the
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companies are giving it away for free.
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So, the question is, do you really pay
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nothing in exchange, or are you trading
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something even more valuable? And the
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real question is, how are these
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companies making millions out of it? If
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you want an answer to these questions,
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then stick around. [music]
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One, in this video, I'm going to talk
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about the business model of these free
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software companies. And once you see how
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it really makes money, you'll never look
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at it the same way again. So, before we
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talk about money, we need to clear up
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one big misunderstanding. When we
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[snorts] say software is free, it
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doesn't always mean the same thing. In
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tech, there are actually two meanings of
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free. The first is free as in beer. That
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simply means you don't pay to use it.
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Just download and install, and you are
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good to go. No credit card required.
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Some examples are Zoom, Spotify, and VS
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Code. The second type is free as in
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speech. This is about freedom, not
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price. You're free to view the source
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code, modify it, and build on top of it.
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A great example is Linux. Linux is
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completely free as in speech. It is an
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open-source operating system for
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simplicity. In this video, I'll call the
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first type free software, and the second
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type of open-source software. [music]
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Now, let's talk about how these actually
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make money. So, there are five common
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ways this software can make money. Let's
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go through one by one. And I want to
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start with the most sketchy method of
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data monetization. So, this is uncommon
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for open-source software, but common for
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free software that is hosted by the
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companies themselves. So, some software
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tracks what you do. They collect
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anonymized data about your clicks,
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searches, [music] and habits when you
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are using the app. Social media, free AI
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chatbots, and even some productivity
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tools do this. They use that data to
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improve their product, or even sell data
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to advertisers in simple terms. If
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you're not paying with money, you're
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paying with your data. But of course,
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they're not doing this illegally. You
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give [music] them consent by accepting
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the terms and conditions before using
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the app. So they aren't technically the
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bad guys here. So the next way is open
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source plus paid support. [music]
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This idea is my favorite. So as I said
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already, open source software is the one
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that [music] you can see modify the code
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as you need completely for free. So
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there are companies built around these
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open source [music] projects. Take Linux
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for example. It is an open source
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project, [music] but companies like Red
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Hat customize the open source Linux and
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provide it to the customers. The
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software itself is free, but if you want
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expert support, manage hosting, or
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enterprise features, you need to pay. In
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simple words, the software is free, but
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getting help isn't. And that's how
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companies like Red Hat make money. So
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that brings us to our third method of
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freemium model. And I think you already
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know this software like Zoom, Spotify,
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or YouTube has a free version. And if
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you want some extra features, you just
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need to pay for them. That's one method.
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Another way is that some software also
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has credit-based models. Like when you
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sign up, you get some credits to use the
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software until they run out, and then
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you need to buy more credits to use like
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the cursor code editor or most of these
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AI SaaS tools. So that's the freemium
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model and the most popular method. In
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addition [music] to this, the next way
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is by showing ads. So you might have
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noticed when you're using any mobile app
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or browsing a website, you get these ads
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>> And these companies take money from
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other companies to show their ads on
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their website. Apart from that,
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companies also use [music] AdSense,
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allowing Google to show ads on their
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website and make money out of it. In
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short, if you aren't paying money,
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you're the product. So, [snorts] that
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brings me to the last method, [music]
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and only a few software can earn from
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Donations and crowdfunding. So, some
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softwares have loyal users and they
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donate [music] and fund the software
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they use. Projects like Wikipedia and
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Blender are funded by their community.
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People voluntarily donate because they
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believe in the project. It doesn't sound
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scalable, but when millions of users
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want to contribute, it works. So, these
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are the five main ways free and open
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source software makes money. And just
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because software is free doesn't mean it
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comes without a cost.
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>> Even if you don't pay from your bank
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account, you're still paying with your
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time, your attention, [music] and your
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data. And once [snorts] you rely heavily
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on a tool, switching later can be
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painful. So, these free software aren't
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always free. You're just paying in ways
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you might not notice. So, that wraps up
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this video. By the way, if you want to
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level up your development skills by
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building some real-world projects, check
4:56
If you understand [music] how systems
4:57
work, you understand one thing: control
5:00
matters. Most [music] platforms track
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you, limit you, decide how you earn.
5:05
That's the system, but not everything
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plays by those rules. There are
5:09
platforms built differently for people
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who prefer [music] freedom over control.
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That's where Rolodel comes in. It's not
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your typical marketplace, no unnecessary
5:18
restrictions, [music]
5:19
no forced identity, just a system where
5:21
your reputation speaks for you. You can
5:23
offer your skills, get hired, and even
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buy and sell services all on your own
5:28
terms. No noise, no limitations, just
5:31
control. If you get it, you get it.
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Check out rolodel.com right now to get
5:36
started. If you enjoyed this video, make
5:38
sure to like, share, and subscribe, and
5:41
I'll see you in the next one.
