Gumroad, the popular e-commerce platform for creators, has released its source code to the public, but the move has ignited a heated debate within the developer community about what truly constitutes open source software. While Gumroad's founder Sahil Lavingia announced the release on social media as open source, many developers have pointed out that the license terms don't meet industry-standard definitions.
Restrictive License Terms
The license accompanying Gumroad's source code contains significant limitations that prevent it from qualifying as truly open source according to the Open Source Definition (OSD). Most notably, the license restricts usage to companies with less than USD 1 million in annual revenue and less than USD 10 million in Gross Merchandise Value (GMV), or to non-profit organizations and government entities. These restrictions directly conflict with the fifth criterion of the OSD, which requires that open source licenses not discriminate against persons or groups.
It's risky if you have any chance of ever crossing $1M in company revenue because the license will terminate as soon as you reach that and you'll have to rewrite everything.
This limitation creates a significant risk for businesses that might build upon the Gumroad codebase, as they would need to completely rebuild their platform if they became too successful. The license also adjusts the revenue threshold for inflation according to the United States Bureau of Labor Statistics' consumer price index.
Gumroad License Restrictions:
- Limited to companies with less than $1 million USD annual revenue
- Limited to companies with less than $10 million USD GMV
- Available to non-profit organizations and government entities
- Revenue thresholds adjust for inflation per US Bureau of Labor Statistics
Open Source Definition Conflicts:
- Violates OSD criterion 5 (no discrimination against persons or groups)
- Not compatible with Free Software Foundation definition
- Classified as "source available" rather than true open source
Gumroad Technology Stack:
- Ruby on Rails application
- Requires Docker & Docker Compose for development
- Uses MySQL 8.0.x, Elasticsearch, ImageMagick, libvips, FFmpeg, and PDFtk
Source Available vs. Open Source
What Gumroad has released is more accurately described as source available rather than truly open source. The distinction is important in the software community, where open source has a specific meaning defined by organizations like the Open Source Initiative (OSI) and the Free Software Foundation (FSF). Both organizations maintain definitions that require software to be freely usable by anyone without discrimination.
Many commenters have expressed frustration at what they see as an attempt to co-opt the term open source for marketing purposes while imposing restrictions that contradict its fundamental principles. Some have suggested that Gumroad should have been more transparent by explicitly describing their code as source available rather than open source.
Potential Benefits Despite Limitations
Despite the licensing controversy, the release still offers value to certain segments of the developer community. As a Rails application, Gumroad represents one of the larger codebases available for study, which could be beneficial for learning purposes and AI training. The company is also offering bounties for addressing issues in the codebase, creating opportunities for developers to contribute and earn rewards.
For small businesses and individual developers who don't anticipate exceeding the revenue thresholds, the code could provide a foundation for building their own e-commerce platforms. Non-profits and government entities can also make full use of the codebase without concerns about the revenue limitations.
Gumroad's Business Strategy
Some commenters have speculated about Gumroad's motivations for releasing the source code with these specific restrictions. The company has undergone significant changes since its founding 14 years ago, including a pivot away from venture capital funding when Kleiner Perkins sold back their stake to Gumroad for USD 1.
Sahil Lavingia has mentioned on social media that he believes AI will significantly commoditize software in the future, which may explain the decision to make the code available for AI training while still maintaining restrictions that prevent direct competition from larger businesses.
The release comes at a time when Gumroad has already increased its fees to 10% plus processing fees, up from a previous flat USD 1 plus processing fees, suggesting a shift in business strategy that may include leveraging community contributions to their codebase.
In the end, while Gumroad's source code release provides a valuable resource for certain developers and organizations, the debate around its licensing terms highlights the importance of precise terminology in the open source community and the ongoing tension between commercial interests and open source principles.
Reference: gumroad