The Business of Open Source

This week on The Business of Open Source, I spoke with Adam Jacob, co-founder and CEO of the Swamp Club. The first thing we talked about was When To Quit. System Initiative, Adam’s second company (after Chef), was one he ultimately shut down after deciding that he just didn’t have product-market fit. The idea of when to quit is an important one — I personally like Annie Duke’s book on the subject. We all have limited time and energy, and knowing when to abandon one project (or pivot from an experiment that isn’t working, etc) is an important one. In Adam’s case, he decided to take something he’d been working on at System Initiative and pursue it as a stand-alone company instead of chugging along with something that seemed to not be working. Knowing the difference between the common challenges around building a company and the signs that it’s just not going to work is absolutely not easy. Adam also argues that in an era when software has become easier than ever to rebuild, it’s also more important than ever for software to be open source, because now more than ever, your code and your feature set is not your moat. Community is your moat. What’s really exciting about Swamp Club is, for example, the people in the Discord sharing what they are building, both with Swamp’s software as well as with other tools. Adam had a lot of other things to say, like how the final code is actually an expression of how well you understand the problem space. But of course we talked directly about how AI has changed the collaboration mode in Swamp’s open source community, and what that means for how the open source project itself gets built. We also talked about establishing a clear value proposition for the community itself, one that is different from the value proposition of using the software. If community is your moat, this is something to pay attention to; the overlap between people who use the software and people who are active in the community is not perfect, and you can have people who don’t even use the software who hang out in the community regardless. If you’re still struggling on questions around understanding your customers’ problem space, figuring out the core value proposition for your software and/or your community, and in general establishing a moat that is not just your code, you should reach out… this is what I help companies with. 

In this episode of The Business of Open Source, I spoke with Dima Grossman, founder and CTO at Novu. For Novu, being open source is part of the go to market strategy. Dima says a big part of the motivation behind going open source to get the widest possible adoption for Novu. It was also a way for Novu to be different in a relatively crowded market, one that serves many developers but that didn’t have a real open source player. Aside from being a go to market strategy, Dima mentioned that while the team at Novu is only 15 people, there are over 450 contributors from around the world, contributing not just tangible things like code, but also ideas and feedback about the problem space. This tight connection with the user community ends up giving Novu a competitive advantage over other players. Is your open source project part of your go to market strategy? Do you want to make it part of the GTM strategy? Reach out and we'll talk about how to leverage open source to build a thriving commercial business. 

In this episode of The Business of Open Source, I spoke with Kris Zyp, SVP of engineering at HarperDB, in the third and final episode in the series about how Harper went from a closed-source company to an open source company. We talked about what Kris saw as the risks and benefits of going open source before they went open source, how they ended up deciding what went into the open source project versus in the enterprise edition, and where the gray areas where. The CEO of Harper, Stephen Goldberg, said that 80% of moving from a closed-source company to an open source company was about communication. I was curious what Kris said about where the heavy lifting was in the transition; but I was also curious about his insights into product strategy, because when I asked his colleagues about product strategy in the transition to open source they both punted to him. We talked about developing a framework for deciding what features go into which edition, and how that framework is communicated internally and externally. We talked about who makes the ultimate product strategy decisions, and what they take into account when making these product strategy decisions. We also talked about using trial and error, the unexpected benefits of being open source, and how Kris thinks that many people overestimate the risks and underestimate the benefits of being an open source company. PS a huge thunderstorm started while I was recording this episode! You might be able to hear it in the background. Are you a closed-source software company thinking about open sourcing a key part of your codebase? Are you wondering how you’ll balance the relationship between the project and product? Reach out, because those are the kind of questions I help companies resolve — and they see dramatic growth as a result. 

In today’s episode of The Business of Open Source, I spoke with Matt Watson, CEO of Fullscale, about a number of topics related to product development and how AI is changing that. Let’s start with a question: What is the difference between a software engineer and a software developer? Matt thinks there is a key difference: software engineers write code, and software developers figure out how to solve customer problems with software. What do you think is more valuable in a world where AI agents can write the code for you? We talked about the importance of creating a well-lit path for users to use your product for their specific use case — and removing everything that is confusing or unnecessary for their use case. Somebody has to have the vision for what the project is trying to do. This was always the case for open source projects, but it continues to be the case now, with AI agents able to demolish a product feature backlog in an afternoon. Who is deciding whether or not it is a good idea to build something just because a customer or a sales rep suggested it? How to do you make sure you stay on track? We talked about how your biggest competitor is customers not just not buying something from you, but either building something internally using an AI agent, or just doing nothing. This is something you need to consider when you are selling and marketing your product — your biggest competitor. We also talked about the challenge selling to developers, how AI accelerates the winner-take-all dynamics in many markets, and you need AI to recommend your tools or you’ll get lost. Last piece of advice: The goal isn't to be the best, it's to be the best known for what you do. Think about that next to you're wondering whether or not you should invest in marketing. ##Matt says we need more product people. If you need help figuring out what the master vision of your company is and how to translate that master vision into a product roadmap and message overhaul that will get your ecosystem fired up, you should reach out… because that is what I do. My clients see increased pipeline growth, better conversions throughout their funnel and team alignment. 

This week on The Business of Open Source, I talk with Julien Verlaguet, the CEO of Skiplabs. Julien is a programming language guy, and we talked about what it means to maintain an open source programming language. We talked about what it means to monetize a a programming language… or, as Julien says, you do not. So why does maintaining SKIP pay off for the team at Skiplabs? And how exactly do they make money? Skiplabs builds products using SKIP, and they focus on building products that can and do take full advantage of the programming language. But ultimately, do customers care that the products are built by the language maintainers? Probably not. “If your open source project can’t be directly monetized with a SaaS,” Julien said. “You have to get a bit more creative.” Indeed, how do you get creative? I have to agree with Julien, that it really depends on what you’re working on. When you think about how to monetize, it’s important to think about what exactly your customers want. He talked about the importance of doing interviews with your target market. In fact, he recommends doing two or three interviews with people in your target market, and in the first interview you don’t even talk about your product ideas, but rather listen to them talk about their problems and how they solve them or would like to solve them. ###By the way, did you know that one of the services I offer is interviewing your customers? Julien talks about how people can overstate how good your product is during interviews… this is true, and having an outside person do the interviews is one of the ways around this. If you’d like someone to interview people in your target market, including users and customers, and to help you use that information to get to product-market fit faster, reach out. 

In this episode of The Business of Open Source, I talked with Joshua Drake, president and CTO of Command Prompt, about business management, bootstrapping versus taking investment, and AI, open source and open source businesses. This episode is a real no-bullshit take on how human psychology influences how leaders behave, how people identify with open source ecosystems and specific technology, and how people in open source should focus more on the outcomes that they want to achieve for clients or for their company rather than making their identity about being an open source developer or a postgres developer.He says everyone — not just entrepreneurs, but technologists in open source communities in general — need to focus on outcomes and build their identities around those outcomes, rather than around a specific technology. This goes for people whose identities are completely connected to open source. What’s important, that the license is OSI-approved, or that you are a person who builds software collaboratively? What’s important, is it the lines of code or is it the people in the community? This episode has a lot of gems; it will be useful for seasoned entrepreneurs as well as aspiring ones. ###If you’re listening to this and you want to go deeper on the human side of building open source companies, check out Open Source Founders Summit, a conference dedicated to building open source companies. As a consultant, I’m also focused on outcomes for clients rather than hours in a chair. What are the outcomes I get? A streamlined product roadmap that’s focused on what matters to your ideal customers, higher conversion rates from your sales conversations and shorter sales cycles. Find out more about working with me here. 

This week on The Business of Open Source, I chatted with Stephen Goldberg, co-founder of Harper, about the process of taking Harper from a closed-source software company to a open source company. I already talked to Ethan Arrowood about the transition to open source, but Stephen was able to give a founders perspective about why Harper wanted to move to open source, why it wasn’t launched as an open source company from the very beginning and why they choose the moment in question to go open source. He says that 80 to 90% of the effort around taking a big piece of Harper open source was around communication, both external and internal. It’s not that difficult to change an license or to push something onto GitHub, but a successful open source launch is about so much more than that. Here’s what we talked about: The board pushed back a lot, mostly because they felt like going open source was going to complicate things for the company and they were worried that the risks outweighed the benefitsStephen was convinced that even as a closed-source company, their customers weren’t paying for their code, but rather for their services. Harper also sells to large enterprises, and he was convinced this type of customer doesn’t want to cowboy their tech stack. There has been a massive positive impact on the company’s sales cycles. The sales cycles are shorter and require less effort from Harper’s team; it’s also psychologically easier when someone asks him to prove that the product does what he promises — he just has to ask tell them to verify for themselves. They haven’t gotten many outside contributions and that was never the goal, but they do get bug reports. This has significantly reduced their costs of support, because the bug reports are often very detailed and identify where in the code there is a problem. Not only that: customers are able to figure out when the “bug” is actually a problem on their side, and that reduces support volume considerably. AI coding agents have dramatically increased the value of an open source project, because when the agent is able to see the software’s code directly, it’s able to build on top of it and integrate it into the system but more effectively than if it were working with docs. This was a huge win that they didn’t expect. The bottom line: If you understand your business model, going open source has a lot of upsides and the risks are not as scary as you think. However, getting advice along the way is critical, and you should work with people who understand open source companies if you’re going open source. If you're considering going from closed to open source and you'd like help on the product strategy and the communication part... that's what I do. You might consider working with me. 

Today on The Business of Open Source I spoke with Sam Alba, co-founder of Mendral, formerly of Dagger, and the first hire at Docker. We talked a lot about about how AI is changing the developer tools marketplace. If AI is changing the way software is developed, what does that mean for the companies that previously had made tools for developers? We talked a lot about hype; what is hype and what is not hype? How many people are actually using AI and getting value from it. It’s hard to differentiate between the hype and real value, Alba says, but also that while it does seem like AI is a bubble, that doesn’t mean there’s nothing real there. It’s just hard to see where the difference is now, but after the bubble bursts there will still be plenty of changes that stick around. When it comes to building an open source company — which Mendral is not, by the way, Alba talks about how you have to get product-market fit twice. But for AI is absolutely changing things, and there have been companies that are abandoning open source because the game is changing so much and it is harder to make it work. Listen to the entire podcast! And if you want someone to work with on establishing your message and then sharing that message in as many places as possible, get in touch. 

One of the myths that swirl around the open source company ecosystem is that all open source companies started as an open source project that then suddenly got traction, and followed by the founders frantically throwing spaghetti at the wall trying to figure out a business model. In fact, this is not the story of how all open source companies came to exist. It is not at all uncommon for a company to start the open source project with the explicit goal of building a company around it, and it also isn’t uncommon for a company that started as a closed source company to open source a portion of their codebase, for a variety of reasons. This episode is about that second scenario. It’s the first in a series about how Harper went from a closed-source company to an open source company, including both the why and the how of the transition. Today I talked with Ethan Arrowood, head of open source engineering at Harper. We’ll get his perspective on the transition from closed to open source today, and another perspective next time. We talked about things like why Harper wasn’t open source from the very beginning, how Harper doesn’t fit the stereotype of an open source company in that they started with enterprise adoption, not individual developers using the platform, and the decision to go open source went hand in hand with the desire to focus on community building. We also had a conversation about the difference between being open source in name and really following the spirit of open source, and why there are business benefits to doing open source ‘right.’ 

In this episode of The Business of Open Source, I talked with Yann Lechelle, Executive President of :Probabl.Perhaps the most interesting part of the conversation was about whether or not there is a risk from generative AI being trained on open source code, then generating new open source code and then re-training itself on that code. Yann says that there is already enough code in the world to give AI enough source material to work with, at least when it comes to ‘traditional’ code. So while perhaps there are issues with types of code that really require creativity, in most contexts we don’t need any more human-written code. Does this mean the value of code is dropping to zero? That’s what Yann things… but for open source companies with permissive licenses, the value of code was already zero. This means that what really matters is community and brand. What do you think? Do you think generative AI makes the value of code close to zero, and puts all software companies in the same boat as open source projects with permissive licenses? If you have an interesting take, let me know. And if you want someone to help you focus your positioning and streamline your product and marketing strategy, reach out.