Donating Your Software: A Whole Lot of WIN!
I was shown the value of volunteering from my friend and former boss Robert Tatsumi back at Macromedia: he and his wife Sharon often organized volunteering outings: sorting items at the San Francisco food bank, packing sandwiches for the homeless at the Glide Memorial Church, etc.
I had never done anything like that before, and I remember being amazed at how much a group of motivated people could achieve in just a few hours, and how easy it was to make a difference in someone else's life.
I decided then that volunteering and donating were going to be part of my life going forward and that I wanted to make it part of my nascent family's values and traditions.
In preparation for staring Balsamiq, I read Guy Kawasaki's The Art of the Start (required reading for any tech startup), which he starts off with the "Make Meaning" chapter. Here's a short video in which he talks about it:
This really resonated with me. Problem was: how much meaning was Mockups going to make? Was "write software to help rid the World of bad software" a powerful enough goal? Could it really make a tangible difference? I wasn't entirely sold. I felt the need to do more.
I remember asking one of my advisers about what else I could do: should I pick a charity to donate a percentage of profits to? Should I make one-time donations to a different charity every quarter? And if so, which? His answer was "worry about getting any revenue first, you'll figure out how to give back as you go along". He was right, it didn't take long...
When working on the Mockups for Confluence pricing, I had copied and pasted Atlassian's pricing page for Confluence and used it as a starting point for my own. At the end of it was a section about Community Licenses.
I remember reading it thinking: that's a very nice way to do it and I'll certainly match their policy, but is this it? Who will want my software? :)
The answer came to me a few days later, in the form of an email:
Just found your software.
My wife and her friend have started a small nonprofit to alert local groups about climate change impact.
I'm a software person but do Java server software, not UI. As any nonprofit, they're starting on the cheap. My wife put that site together using Google Sites.
They want to get a friend to do a 'real' site for them and are having trouble deciding on a design.
I've tried to give them help but they're visual, I'm verbal and I can't draw.
I remember thinking: whoa, interesting! Here's someone who's clearly doing some good for the World, and all I have to do to help them is generate a license key - a 45-seconds operation: copy+switch+paste+click+switch+paste+send.
Something that took me less than a minute to do could have a material impact on someone's efforts in helping others and making the World a better place. The reward/effort ratio was extremely high.
I liked that feeling, a lot.
That's when I decided to institute our do-gooder policy for the Desktop version as well:
If you are a do-gooder of any sort (non-profit, charity, open-source contributor, you get the idea), email us with a short blurb and we'll send you a license, FREE of charge.
That was 14 months ago.
As Mockups gained popularity, the number of do-gooder requests I received each day rose proportionally. After about five months it got to a point where I couldn't keep up with it by myself, so I asked my wife Mariah to help me with it.
She did a wonderful job for a few months, but it become too much for her to do with a little help from me as well. That was one of the reasons we decided to hire Valerie, and she's been doing a wonderful job at it since.
Right now I'd say we dedicate about 20-man-hour a week to sending licenses. I estimate it's about 15% of our collective working time. Given that salaries are by far our biggest cost, this is not a small investment.
In preparation for this post I ran some GMail queries to calculate how much we've donated so far. Here's what I found out:
|Product||# of keys donated||Equivalent Unit Price||Total Value|
|Mockups for Confluence||97||$4,000||$388,000|
|Mockups for Desktop (site-wide)||152||$709*||$107,768|
|Mockups for Desktop (single license)||1,561||$79||$123,319|
|Mockups for JIRA||53||$799||$42,347|
|Mockups for XWiki||3||$6,000||$18,000|
*A site-wide license of Mockups for Desktop would cost a lot more than $709 (in fact, we don't even sell those), but I calculated that the average non-profit in the US has 10 employees (12.5 million US non-profit workers in roughly 1.2 million organizations - it's 2001 data but it's the best I could find, LMK if you have better info), so I used the same price of our 10-User pack.
I admit I was really surprised at the number: $680K is a lot of licenses! :)
I love it, I'm very proud of us right now.
Too Much? I disagree
If you think we're donating too much, I'd like to try to convince you of the opposite. In fact, if you're a software business owner, I'd like to persuade you to do more than what you're currently doing.
Here's the way I see it.
It's a moral duty
The fact of the matter is that we (people in tech, knowledge workers) live extremely privileged lives. Just think about how much time you've spent on Twitter or Facebook lately, and compare it to how much time you spent worrying about providing for your family.
As software entrepreneurs, we enjoy insanely high profit margins (ours are in the 80% range for instance). In my view, that's so high it's kind-of unfair, and there's definitely enough to share for a better cause.
Most of all, I believe non-profits should spend their limited money on doing good, not on software needed to help them achieve their goals.
It's extremely rewarding
Because of our do-gooder program, we get THE BEST emails!
Each of them reminds us every day that humans are generally good, generous people.
The wide breath of causes we hear about is inspiring. It really spans the gamut, from large groups like Amnesty International to a single guy working on a new website for an orphanage in Honduras. From tech-y organizations like Mozilla.org to the Heart & Stroke Foundation of Canada, we hear from literally hundreds of people every week (here's a very partial list).
Here's a sample story from a do-gooder license recipient:
[...] thanks to your fast response, I was able to use Balsamiq mockups 8 minutes later, in a 3pm UI meeting yesterday with our donor database software vendor. We jumped into using the tool "cold", using it full-force in the meeting.
Using the tool really helped keep folks focused and on-task, identifying additional requirements and solving detailed UI design issues right then and there. Everyone was very very impressed with power and ease of use. My coworker and I continued tweaking the mockups on the train ride home, and sent PNG copies back to the developer. Now he is off and running with these!
Bottom line, it went extremely well, and your tool was critical in that success. What a huge improvement over whiteboarding and/or paper mockups (especially since I have awful handwriting). Thanks again!
Shawn Cox, ACLU
One of the most difficult parts for any project is the startup phase. Bridging the gap beween what is envisaged and what is in the mind of IT professionals is a big initial step. The use of Balsamiq Mockups drastically shortens this step and makes working on the project fun from the very start. Clients and IT professionals can use the intuitive interface of Balsamiq Mockups to shape their ideas and quickly reach an agreement on how things should look and what the basic functionality should be. Apart from being a good way to start collaboration within the project, it simply saves a lot of time lateron in the project by being clear on what needs to be done from the word go.
Ed Vanvelzen, Amnesty International Netherland
I have used Balsamiq Mockups occasionally after installation. Mockups has provided efficient collaboration with the church's administration. I change the Home page of our website every liturgical season or for a major holy day, and the turnaround time sometimes is very fast. Mockups helped me communicate page layouts to decision makers very easily.
Thanks again for a great product and your generosity,
Best regards, Rene R.
and here's one more:
My name is Fitzgerald Steele, I've recently joined ACT, Inc as a User Experience Designer. ACT is a not-for-profit US corporation. Our mission is "helping people achieve education and workplace success."
Mockups has been an invaluable tool for our UX team. We use it to visualize and communicate design options to stakeholders. We use Mockups to rapidly prototype application information architecture and perform quick UX evaluations. For me, Mockups is great because it allows us to quickly build visual, interactive prototypes, put them in front of project stakeholders and users, and generate conversation and consesus about project features and priorities. Since we've started using it, others within our organization have asked about it and have started using it as well.
Thanks for a great product!
There are lots and lots more - we'd love it if you shared your own story in the comments! :)
It's really heart warming. Who wouldn't want to receive emails like these every day?
It's good for business
Like Tim O'Reilly, I'm a strong believer in the social value of business done right. It's all about "creating more value than you capture".
In other words, this is really a case of the more you give, the more you get.
I am going to try and put it in terms that even Scrooge would appreciate, so apologies if the bullets below sound cynical.
By donating your software:
- you get FREE testing and feedback: license recipients find bugs for you, give you great ideas on how to improve the software and do it in the nicest of ways, both because they're usually nice people and because "they owe you a favor".
- you get the best kind of word-of-mouth publicity. Non-profits regularely meet with corporations and other people who won't qualify for a free license. If your software is good, they'll likely recommend it to them.
- you improve the Triple-Bottom-Line: I heard this term for the first time in this Startup Success podcast episode. Basically as products and services become commoditized, customers start caring more about how what they buy impacts the World, both from an environmental and social aspect. Showing your commitment to making the World a better place sets your company apart from your competitors who are just in it for the money.
- you get great street cred with the open-source community: if I wasn't trying to make a living as a software vendor, I'd very likely release Mockups as open-source. I also benefit from open-source software every day, so IMHO donating to OSS projects is the least I can do to give back. People on the OSS community respect that, and that's a very powerful endorsement.
- you have a convincing arguments against hackers. Every few months we notice someone cracking our software and posting license keys or even key generators to the dark corners of the Web. It's ok, it's normal and it's a sign of success. So far, we have always convinced these smart, usually young people to take those keys down with this simple argument: look, we're good people, why are you trying to hurt us?
- you might be able to treat part of your donations as a tax deduction (ask your accountant).
In general, I think everyone will agree that having a good reputation results in more sales.
Now, the beauty of this is that even if you don't believe any of the moral-duty, feel-good arguments I wrote about above and decide to start donating your software purely as a marketing move, the end-result is a big WIN for the recipients of your software anyways, so go right ahead! What do you know, even Scrooges can do good in the World! ;)
For full disclosure and for reference, we also donate licenses for marketing reasons, both to bloggers willing to give us feedback and publicity with a review and to people who want to demo Mockups in front of a crowd. These kinds of donations are not included in the $680,000 figure above, and their value amounts to just about 13% of all the licenses we gave away thus far.
I have been wanting to write this post for a while but decided to save it for a special day. Today is that day, and to celebrate it we decided to donate some more, but this time in cash donations.
I asked everyone at Balsamiq to come up with a recipient for roughly $4,000 in donations, and this is what we came up with:
- Mariah, after 35 years, has found the Vietnamese orphanage she came from. We are still trying to figure out if it's still around, but our plan is to deliver them our donation in person early next year.
- I am sponsoring my uncle Luigi's trip to Africa in January 2010. He is a surgeon and joined a group called "doctors without vacations", for which he and his colleagues use up vacation time to go to places in need of doctors and practice there.
- Marco is planning on sponsoring one or more projects similar to what you could find at Kiva.org (also a do-gooder license recipient) but organized by an organization based in Bologna. It will basically sponsoring part of a long-term project somewhere in Africa (he'll share more details here or on Twitter as we figure out the details).
- Valerie donated to a campership fund that helps kids get to a magical (but expensive) sleep-away camp in Northern California. She says: "Charities have seen a dramatic dip in donations, so we remind our customers to keep giving to your favorite recipients, just give less. Keep flexing your donor muscle, even if you are able to spare less now than during boom years. It's important to keep the generosity habit alive."
We can think of no better way to celebrate our little company's success, and are committed and looking forward to donating lots more in the future.
Speaking of which, I still have to run this through our accountants to see if it's logistically feasible, but for the upcoming web version of Mockups we plan on giving you an option during sign up to specify a charity of your choice (or pick from a list), and we'll donate 5% of the money you send us for your subscription to them.
That's cash donations, not licenses. This idea was inspired by Working Assets (now called Credo), a long-distance telephone carrier I used for years back in San Francisco: their idea is that they round up your phone bill and use the extra change for progressive causes. We won't round up your bill, but instead use part of it to do good in your name if you so wish. We'll keep you posted on this program as we figure out the details.
We hope this post will inspire you do start donating your software as well, it's really a whole lot of WIN.
Peldi for The Balsamiq team