Do donations "work"?

Subscribe to Do donations "work"? 3 post(s), 2 voice(s)

Avatar casper2095 2 post(s)

I’ve read that Morgan doesn’t do this for the money, and I appreciate that. As a developer I’d be interested to know, if perchance I did come up with a body of work which attained a similar level of success, how much, if any, money actually comes in via the voluntary donations?

Actual numbers would be great, ballpark numbers would be nice, a ratio of donations versus costs might do, or an indication whether donations even cover hosting etc. costs would at least tell us something in itself.

Should any such venture commence with the idea that it will never pay for itself, or is there some hope that it might one day lead to a nice house in a nice suburb near a good school?

Avatar Morgan Schweers Administrator 1,204 post(s)

(Warning: LONG…)

Well, the first thing to understand is that my user base has a bias towards people with Paypal accounts (simply by being an eBay-oriented application), which may make them more inclined to donate than the average user because the friction of donation is less.

On a monthly basis, not including my recent request for donations, I get enough to cover my lunches @ work usually. Maybe as much as $250/mo., but usually less. Releases always uptick donations, too. Hosting is mostly covered by the one Google ad I put at the top of the JBidwatcher pages. Basically, I have to kick in a month’s hosting about every 2 months. (So, 2 months covered by ads, 1 month covered by me.)

My hosting is expensive because I’m anal about my server. I first used Sourceforge, which was fine for a while, but I wanted my own log files and I wanted my own download process. I switched to a shared hosting service (the same one I’ve been using for about 12 years, hosting other domains), but process limits killed me when spammers were trying to deliver tens of thousands of emails every day, and they were being processed by procmail and charged against my at-a-time process limits. :( In the end I left them, sadly, because my service really hadn’t changed in those 12 years and the Internet had. I also couldn’t upgrade the tools on the server, or edit my Apache configuration. I wanted root access, which meant a dedicated server. I now host through a medium-low-end ServerBeach dedicated server, and they are awesome for me. Most people really don’t need that kind of service, though. I don’t come close to using the 2TB/mo. bandwidth, or the 160G of storage. It does, however, host:

Apache VirtualHost’s rule. :)

As for its popularity; about 7500 people are running JBidwatcher on any given day, based on unique IP hits to the ‘check for update’ page, which happens once a day or each time you start up, unless you disable it. 21,000 people have downloaded JBidwatcher 2.0 in the roughly 2 weeks since it’s been available, and 9000 have downloaded 2.0.1 in the 6 days it’s been out.

In the first 24 hours of the 2.0 release, when I made my request for help, 5.7% of the people who downloaded it, contributed. (The percentage has since slowed a lot, mostly because early upgraders are devoted users, and often find more value in it than folks who upgrade later.) The wonderful people who donated during that period of time gave an average of $14.27 each, netting me my next mortgage payment and a little more to pay bills. Contributions have slowed since, quite reasonably, but I think if I sell a few things on eBay I’ll be able to make the April mortage also, along with the basic bills and food and stuff.

At this point in time, I don’t believe I could make an independent living off of JBidwatcher, but the positive response to my request has helped, immensely during the current economic downturn. It’s a one-time event, though, not something that can be reasonably repeated, so it’s not really comparable for ‘income’ purposes.

That said, I have a nice home in a nice suburb near a good school because of JBidwatcher, in a way. I was hired into a start-up company back in 2001 to do eBay web scraping for them, based on my knowledge gained through JBidwatcher. I got a little stock. They went public. They got bought. My stock accelerated (i.e. +1 year of vesting). The stock did very well for a while. I left, eventually. I moved to another state, and cashed out a good bit of it, and used it as a down payment for my house (20% down, 30yr fixed @ 6%, and thank goodness I fought for that! :) ), and pretty much the rest to pay for my wedding to my wonderful wife. Now, with the downturn having cost me my latest job, JBidwatcher is again helping with said house, in that my current (and I believe next) mortgage payment will be coming from the amazing and humbling kindness of my users.

There are possibilities for other income on JBidwatcher; iPhone apps, an associated web service, etc., but at the most it’s a side-business, not a ‘give up the day job’ business. If eBay would let me on the affiliate program, I believe it’d be much, much closer to paying a nearly full-time salary, but their program guidelines currently explicitly disallow downloadable software that snipes from being on the affiliate program.

The trick is to do something you love and really care about, do it well enough that it’s something YOU would use regularly, and then see if it’s something other people are interested in, and then finally see if there are ways to make money off of it. eBooks, screencasts, freemium services, custom development, donations, various affiliate programs, selling the software, and much, much more, are all possibilities depending on what your passion is for.

I have a wife and a nearly-ten-month old son, though. I can’t really allow myself the luxury of going into business for myself long-term, because I need health insurance for my family. It’s obscenely expensive to buy individual health insurance, unfortunately, which would put any business I’d start underwater from the get-go, and substantially increase the ‘break-even’ income level. I’m looking at taking (and quite willing to take) a substantial pay cut from my previous salary, just in order to get my family back on health insurance.

Short term, though, I’m definitely looking at ways to provide services that folks will pay for, to make ends meet while I’m looking for full-time work, especially ones that will continue to help pay the bills when I return to work.

Still, that’s really not the way to approach it from the start, imo. The key is to find a problem you can solve, and you like solving. Next, put it out there and see if it’s a problem other people have, and if your solution helps them. Everything else flows from that, I believe.

Sorry for the length; feeling garrulous tonight I suppose… I also wanted to get some of the numbers out there. I hope it’s been an interesting brain-dump! :)

— Morgan Schweers, Cyber*FOX*!

Avatar casper2095 2 post(s)

Thanks very much Morgan. More than I’d hoped for. Sage words. Best wishes.
Got my first snipe last night. Thanks. Here’s some money in your jar ;-)