Penpot's upcoming business model for 2025

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The Open Source ecosystem allows for quite a number of sustainability plans. I’ve personally been involved in this journey for more than 25 years and that’s probably why I’m particularly excited to share with you our official plans for Penpot’s sustainability model.

Many of you already know that Penpot is a product made by an open source company called Kaleidos (think of Ubuntu & Canonical) and, even with the amazing contributions from the community, keeping a team this size is expensive. And rightly so, a platform like Penpot requires the best talent around for both product development and community efforts.

We were very fortunate to get some serious funding to kickstart the project three years ago. Thanks to that we have been able to keep a steady development pace. At the same time, we know we can build a very successful open-source friendly business model and generate our own revenue starting in 2025. Wonderful, isn’t it?

Now, at Penpot we all want to stay true to these two premises:

  • We want our most feature-complete offer to be fully open-source.
  • We don’t want our value capture strategy to be dependent on services.

This is a tough one. It feels counter-intuitive and incompatible with traditional Open Core business models found in Open Source. It feels that way because it’s true.

And yet, we believe we could bring some innovation to open-source friendly business models.

Simple chart comparing Open Core business model, where you pay for advanced features versus a new unknown model where you pay tro limit features
Simple chart comparing Open Core business model, where you pay for advanced features versus a new unknown model where you pay tro limit features1790×1006 68.3 KB

Would paying for a more limited product make sense?

I had the pleasure to publicly share, for the first time, this new business model at Open Source Experience in Paris on December 4th 2024. We call it the Open Nitrate Model and I explained the context and what it means in that 15-min talk after I discuss a particular implementation of it, which we internally codename “the Tax the Controller” model.

Simple chart where we evolve paying for a limited product into paying for a more controlled product, the difference is key
Simple chart where we evolve paying for a limited product into paying for a more controlled product, the difference is key1790×1006 66.1 KB

At Penpot we believe organisations should pay when they want to govern how the tool is used. This way we don’t discuss basic versus advances but freedom versus control

Within the Open Nitrate Model, we are focused on creating a separate closed-source product who’s only reason to exist is to control the open source product and limit the inherent freedom that new and power users have the right to enjoy by default.

Chart showing a Venn diagram where Open Core and Open Nitrate models intersect. Also, we insert Tax the Controller submodel within Open Nitrate model
Chart showing a Venn diagram where Open Core and Open Nitrate models intersect. Also, we insert Tax the Controller submodel within Open Nitrate model1790×1006 73.2 KB

It’s never black or white, of course

In other words, our “nitrates” will be the features that represent the “governing or controlling” counterpart of the laissez-faire Penpot ethos. These will be shipped separately and won’t be part of Penpot as an open source platform, which will remain free and unlimited for everyone.

PS: We plan to write a more detailed document about this uncharted territory very soon. In the meantime, we will refer to this OSX talk

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Essentially, personal users and individuals can access the tool at no cost. However, if you operate a business or leverage Penpot as a source of income, there will be a fee involved. Is that the core of the business model?

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Hi Albert! No, that wouldn’t be accurate.

If you operate a business or leverage Penpot as a source of income you should enjoy Penpot as open source for free, why not?

What our business model means is that if your organization needs to restrict the default Penpot experience, then you need to pay to use a separate governing backoffice that modifies the Penpot open source product to that organisation’s liking. You pay when you want to redefine and control the default freedom-focused Penpot capabilities.

I don’t think we would like to charge people based on their “business” outcome (what a mess!), but we can charge them based on their willingness/need to restrict usage freedom. We’ll be publishing the talk where I discuss this with some examples, so stay tuned!

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Oh! that’s great! In what way will a business need to restrict Penpot? Just curious

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Update: this is the 15-min talk on our business model. It starts with a 1-min intro in French and then we go straight to the matter.

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I respect the search for an unconventional model. I fully understand how difficult it is to find a sustainable business model for an open source project but I still can’t grasp how the proposed strategy can be enticing for the corporate clients. Probably because I don’t have enough insight into the business at the corporate level.

It just feels to me like you’re trying to skip a step here and sell the idea of Penpot to the corporate clients before it’s really popular with the designers and developers. Before it becomes a go to tool for the majority of professionals where they start to demand its use in corporate environment.

And for the designers and developers you could probably offer some services upgrades. Or get a percentage cut from addons marketplace.

I wish Penpot the best and hope it becomes self sustainable rather sooner than later, it’s just I’m having a hard time understanding the proposed business model.

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Hi @AlexeyAdamitsky !
We have tested this model with corporate prospects and it works for them. They like the idea of having a powerful design & prototyping platform that they can “control” their way. What’s more important, they are willing to pay to have this kind of value.
As for the designers and developers outside this type of environment (highly correlated with corporate world but not limited to it), we can think of ways for them to support the project and get something in exchange, but it’s important for us that whatever we give to the individual power user of small teams, it’s not a paywall behind which the super cool features await you.
Time will say if this unconventional model will work but we want it to develop it for real. Thanks for your insights and support!

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Love to hear that! It makes the world of difference since the corporate clients actually requesting it and finding value in it.

It’s just hard to see where this value can be at the freelancer/small studio level.

I get it. I follow your talks and appreciate the support for individuals and small teams. I have no issues paying for software when there is value in it. Or donate like I do for Blender to support a great tool which gives the power back to creatives and doesn’t hold them hostage to an app.

I’ve tested Penpot after each major release and I really like it and where it’s going. There are some rough edges still in UI/UX but the only thing that really stops me from adopting it fully and moving all my personal projects from Figma to Penpot is the lack of proper desktop app.

I know I’m spitballing here but still, maybe you’ll find it valuable. I think one definite source of revenue can be the percentage from addon sales in your ecosystem. I don’t see how anyone can be averse to it since it makes perfect sense. It’s very similar to Blender Foundation situation where they are now expanding their online infrastructure and offering extensions which can be download from their platform. They can easily evolve into a marketplace but some ethical things probably stopping them. There is already a big non-official BlenderMarket marketplace. So such move can kill this site and it was always supporting the Blender Foundation with donations as well. So there are some conflicts probably. Your product doesn’t have such history so it only makes sense to make the addons marketplace a source of revenue.

Anyway, happy to hear there are opportunities for revenue from corporate sector. And looking forward for next Penpot updates!

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Pablo,

Interesting business model! I hope it can provide enough steam to sustain Penpot’s product development.

I’m wondering: have you thought about adding some pay-what-you-want plan for Penpot to allow individuals pay a few bucks a month to help support the product? I’d mention elementary OS who’ve an App Store that allows users to pay whatever they want for their software (it can be $0 as well, and most people download them for free – but those interested in supporting the product can easily do so through their platform).

Just a thought. I wouldn’t expect a huge income, but I believe the project could educate the userbase on the culture of “putting your money where you mouth is” (or smt more like “put your money on what you benefit from” – I’m bad with catchy phrases, it would be a job for your marketing team :stuck_out_tongue:).

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Hi Pablo,

I couldn’t agree more with all the comments. I am thrilled with the scope of Penpot. The pace of development is amazing. Thank you for a great product.

I also understand that a sustainable model is needed to make the product viable and attractive. So it needs some kind of income.

I have watched your talk and find the ‘Open Nitrate Model’ approach interesting. My only wish is that all the features currently available remain free. For example, I use Penpot for a non-private organisation that doesn’t make any money. But because we are a larger organisation, we really need SSO. However, according to your presentation, the current SSO feature would later go ‘behind a paywall’. Did I understand that correctly?

This would be a great pity and could mean that we would not be able to use the free software of today in the future. There have also been other open software, such as Rocket.Chat, which initially offered all features for free, but later you had to buy a licence for the same feature. This disappointed many users (1, 2).

That’s why I hope that all features Penpot provides today will remain free - forever.

I hope for the best and wish you continued success.

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As an alternative model I like the donation model of Blender and the Godot engine very much:

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Blender also offers the code for their donation platform for free: infrastructure/devfund-website: Blender development fund website. - devfund-website - Blender Projects

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Thanks everyone for all the comments so far. I’m trying hard not to instantly reply to all of you so that the conversation can flow freely but it might be a good moment to comment some stuff.

  1. Everything that was born open source will remain open source forever. The SSO example (which is a tricky one for other reasons thet Benoît from Mastodon, in the room that day, pointed out) would be something built separately for this other proprietary piece of code and would be a bit more advanced. But the current instance-wide SSO possibility would remain there, no problem. Regardless, NGOs, Educational institutions and open source projects will be able to enjoy massive discounts or get the whole “PenTax” completely free.
  2. Some people have referred to the “donations system” that Blender or Godot have but we think it’s not enough for us if we want to move fast for such a complex product like Penpot. Also, we believe in a “reverse income transfer scheme” were it’s the people that have more money the ones contributing more money (to less privileged people through Penpot) and people not having so much money being spared that request. This is an extreme simplification, please don’t quote me here. But perhaps, what’s more important is that, if you ask them, neither Blender nor Godot are happy</polite mode> with how that system works for them. Ton Roosendaal’s latest Blender Conf keynote was quite specific about this (skip to min 20 if you want the short version).
  3. We do want to have a way for individuals or small teams to (monetary) contribute to the project too. Perhaps they are not interested in paying for our Tax the Controller (or the broader Open Nitrate features) but there might be “value” we can give to them in exchange of some money. We haven’t ruled out this, but it would be an “extra”. Think of it as a “donation” but with some nice perks attached. Penpot events discounts, Penpot exclussive merch, early access to beta features, things like this.
  4. We have also thought about addon/plugins revenue share. This is a different business model in the sense that its definition would roughly go as follows “we capture value by enabling a new market outreach for creators and asking for a transaction fee that fairly represents our role as intermediaries”. This is not incompatible with our current main approach, it’s simply not our priority right now. Having said that, at this rate we might have hundreds of plugins in just a couple of years…

Could I ask a question then? Speaking of (3), would something like that be interesting to some of you? Some sort of “Support tier” where it’s less about features themselves and more about perks, merch, discounts and early access to new stuff or guaranteed entry to beta periods.

Thanks everyone!

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Personally, I think quality is more important than quantity here. The reason where I think it makes more sense to have a limited number of plugins instead of possibly hundreds in a few years’ time is the following.

If you have a lot of plugins, chances are there are a lot of plugins that do the same or something similar to an existing plugin. If you currently look at the plugins available you can even observe this phenomenon already, take plugins for Icons you have Penpot Plugin | Icons, Penpot Plugin | MynaUI Icons and Penpot Plugin | Heroicons. These are 3 plugins for icons, using the Penpot Plugin | Iconify plugin gives you access to these 3 libraries and a lot more. In addition, you have plugin Penpot Plugin | Icon finder which uses the same principle as Iconify but on a much smaller scale.

By encouraging people to first see if a similar plugin already exists for Penpot, you can try to avoid this. Alternatively, I suggest that instead of creating a new plugin themselves, people look to see if they can help make an existing plugin better. This could be by submitting a feature request with or without the suggestion of writing code yourself or asking to actively help maintain and build on the plugin.

An additional advantage is that you need fewer different plugins to do what you want to achieve when creating a UI, for example.

Finally, this potentially offers the opportunity to eventually extend your business model to plugins. So that the basic functions within the plugin are accessible for free but the more specific cases are paying with or without a commission for Penpot.

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