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Companies and trust
Your open source project is starting to gain momentum and it's time to start seeking sponsorships. Here's how to get started.
Part 1 of 3, shared with permission based on Making your open source project sponsor-ready, Part 1: Companies and trust by Nicholas C. Zakas. Published under CC BY-NC-SA 4.0.
Early on, it was a battle to get sponsorship for open source projects. What used to require phone calls and drawn-out discussions has now been streamlined. Companies and individuals can now know if a project accepts donations just by looking at the project page on GitHub, and if you’re lucky, they’ll sign up without you needing to do anything. But is that really all you need to do? Just set up an Open Collective or GitHub Sponsors page and just watch the money roll in? Not quite. There’s a lot you can do to make your project attractive to potential sponsors.
While it’s possible to bring in a decent amount of money through individual sponsorships, the real path to open source sustainability is to get larger donations from the companies that depend on your project. Getting $5 to $10 each month from a bunch of individuals is nice, but not as nice as getting $1,000 each month from a bunch of companies. For that reason, this post focuses on making your project attractive to companies, and to do that, you first need to understand why a company might want to sponsor your project.

Why companies sponsor open source projects (or don’t)

There’s a fairly common mantra online about why companies should sponsor open source projects: because it’s the right thing to do. Many companies, especially startups, are able to get started because they are building on top of free and open source software. It would be difficult or impossible for companies to compete without the availability of zero-cost foundational software. Once they are profitable, it makes sense for companies to contribute back to the software that helped them become successful. Right?
The harsh reality is that companies don’t operate as charities. Their goal is to bring in as much money as possible, and that doesn’t include giving away money “because it’s the right thing to do.” For some, this is frustrating, but if you can move past the perceived unfairness of it all, you can come up with a strategy that works. Just because companies won’t sponsor your project out of gratitude for your work doesn’t mean they won’t sponsor your project. You just need to stop and think about the things that companies do spend money on regularly and then align your offering with those things.
And there are two things that companies readily spend money on: helping the business and publicity.

Companies invest in things that help the business

Companies generally spend money on things that accomplish one of three goals:
  1. 1.
    Saving time
  2. 2.
    Saving money
  3. 3.
    Generating more money
Open source projects must fulfill at least one of these goals to be attractive to a sponsor. Your project might save the company time by providing code that they would otherwise have to build and maintain themselves; your project might save them money because otherwise they’d need to buy a commercial product; your project might generate them money if it is user-facing. So the first thing to understand is what value your project is providing to companies.
In the business world, this is referred to as your value proposition. It’s often a one-liner that tells everyone exactly why your product is valuable. As an example, if you visit ESLint’s website, you’ll see this phrase featured prominently: “Find and fix problems in your JavaScript code.” That’s it. Simple, easy-to-understand. If you write JavaScript code, then ESLint is helpful for you. It helps by catching problems you might miss, and problems cost your company time and money; therefore, ESLint saves your company time and money.
Action items: Define the value proposition for your project and feature it prominently: on your README, on your website, on your social media accounts, etc. Make it a simple one-line sentence that can help explain how it saves companies time or money, or helps to generate more money.

Companies pay for good publicity

Companies are willing to pay for achieving their goals, but there is another consideration: will the sponsorship reflect well on the company? All companies care about their image in the marketplace and will not spend their money on anything that reflects badly on them. Think of the commercials you see while watching TV. Companies are buying advertising spots during specific shows because they want their brand associated with the show. Why? To generate more money by reaching the fans of that show. The opposite is also true: companies pull their ads when it becomes a risk to their reputation.
Make sure to have a website in addition to your README, as open source projects frequently promote their sponsors through logo placement on both. Companies need to be okay with having their logo in these spots, which means they need to be okay with the association between their company and your project. As a simple example, if you name your open source project “hotGirlXxXparse,” it’s doubtful that a company will want their brand associated with your project.
The ideal case is that the company gets good publicity for supporting your project. Companies care about publicity like this because it helps to attract new hires and retain their existing developers (similar to sponsoring tech conferences). There is a lot of enthusiasm for open source projects in the tech community, and publicly thanking a company for sponsoring your project helps to build their brand among the community. While companies may not expect much of an impact on their brand from sponsoring a project, it can result in more name recognition and even an increase in candidates for open jobs.
Overall, your job is to make your project into something that companies would be proud to have their brand associated with.
Action items: Ensure you’ve named your project appropriately and have a professional-looking website with spaces for company logos. Make sure the website is some place a company would be excited to be displayed.

The importance of building trust with companies

So you have defined your value proposition, picked a good name, and have a nice website up and running. The next step is just as important: how to signal to companies that you are trustworthy. A sponsorship is a business agreement, and you are a partner to that agreement. In order to do business with you, someone at the company must trust you. Companies do not do business with people or other companies they don’t trust.
Startups are intimately familiar with this problem. How do you get customers when you have no track record and no other customers? How do they know you’ll still be around in a year? How do they know you won’t just take their money and run? With open source projects the problem is even more complicated because there often isn’t a company backing it up (if there is, they might not need sponsorship, after all).
Your job from this point forward is to do everything you can to appear as trustworthy as you can. Remember, you are trying to convince a for-profit business to give you, some person who wrote some software on the weekend, a significant amount of money. This is no small task. You need to think of yourself more like a business than an individual and spend time building your reputation.