This week on The Business of Open Source, I have the first episode I recorded on-site at KubeCon Salt Lake City (and the only full-length episode), with Solomon Hykes, CEO and co-founder of Dagger, and co-founder of Docker.One thing Solomon mentions briefly but that is very important is that there are limits to what can be learned from Docker’s story, simply because the situation was so unique. Docker experienced explosive growth, at least some of which was due to having the right technology at the right time. This kind of explosive growth is very rare, though, and it brought it’s own set of challenges. The point being that while most companies will struggle to get enough adoption, Docker struggled to monetize effectively but got so many chances to try again just because it had a massive community. The hypothesis — or actually, lack thereof — behind creating the original Docker open source project. How having a massive community does help — but also doesn’t guarantee you’ll be able to build a financially sustainable companyWhen you build a massively successful technology or standard, you’ll attract competition — and in the case of Docker, the competitors were savvy companies who’d won the previous cloud wars and ultimately were quicker to figure out how to monetize Docker containers than Docker itselfWhat Solomon is doing differently at Dagger compared to Docker, one of which is thinking about monetization much soonerThe open source movement was founded on such explicitly anti-commercial principles that companies building in the space would often not be intellectually honest about the fact that they were building both a software to give away for free as well as a business that needed revenue. Docker tried too hard to please everyone, including those who felt that open source should be pure and non-commercial — at Dagger, they’re much more transparent and upfront about the fact that it’s a company with commercial ambitions. Solomon also talked about the difference between components and product, and how designing products requires control, including the ability to just say no without explaining yourself. ###It was fascinating to hear Solomon talk about the lack of intellectual honesty around who pays for the development and maintenance of a lot of open source projects, because that precise topic was the focus of two panels I moderated at KubeCon, one during the main conference and one during CloudNative StartupFest. If you’re struggling to articulate how your product and project are different from each other (and others in the ecosystem) and why someone should pay you, you might want to work with me. Reach out! 

In this special episode of The Business of Open Source, I spoke with Nithya Ruff, director of Amazon’s Open Source Program Office (often referred to as an OSPO). We started out talking a little about what exactly an OSPO is and what they do in companies — something I’m guess not everyone understands. It boils down to managing the company’s open source strategy — something that is relevant to pretty much any company that writes software of any kind. There are a lot of components to an open source strategy, and there are different ‘models’ for an open source strategy, depending not just on the company’s size, but also whether or not open source is core to what the company sells. Nithya previously led the OSPO at Comcast, and talked a bit about the difference between running an OSPO for the a company like Comcast and a place like AWS, because their products are different. And why do open source strategies matter for startups? Even if you’re not an open source company, if you can’t prove you’re in compliance with open source licenses for projects you depend on, or if there are security concerns related to your open source use, it can sabotage acquisitions. By the way, helping startups figure out their open source strategy is what I do as a consultant. If you’re figuring out how to balance your open source project and your product strategy, and how to manage the risks and opportunities associated with open source projects, you might want to work with me.  

In this special episode recorded at All Things Open, I talk with Peter Farkas, CEO and co-founder of FerretDB. We talked about about MongoDB and the license change fiasco and why Peter wanted to build an open source company and never considered building a non-open source company. The biggest 🤯 in this episode was about enforcing what it means to be open source; in particular, FerretDB positions itself as a truly open source alternative to MongoDB, and has received threatening letters from MongoDB as a result. How do you enforce it when a company claims to be open source but does not use an OSI-approved license? How well do the average users actually understand the license implications, and if a big company says they have an open source license even though it’s source-available, not open source, how much will people understand the difference? If you want another perspective on the enforcement of advertising around open source licenses, listen to the episode I recorded with Stefano Maffulli, also at All Things Open. 

This week’s full-length episode is with Bhaskar, founder of YottaDB. This episode was recorded on-site at All Things Open last week, and we covered a wide range of topics. Including:How the open source ecosystem, and the open source business ecosystem, has changed over the past 30+ years.Who can responsibly self-support an open source database, and who really needs to have someone to call if things go wrong. The spectrum of professionalism among open source developers How YottaDB started out as a project developed inside a larger company that was in financial services; and Bhaskar decided to spin it out as it’s own company.The challenge articulating the value of support contracts, especially for software that is reliable. Bhaskar says he is selling peace of mind more than anything else; and he works with customers to avoid incidents — because ultimately avoiding an incident is a better outcome for everyone than a quick recovery from an incident. How to convince people that they are actually not as good at managing open source databases as they think they are. We also talked about conference strategies: according to Bhaskar, the way he’s decided which conferences to exhibit at is a series of trial and error — and by the way, this is something I’ve heard from many people. Yes, you have to think about where your customers are, not where your friends are, but sometimes you don’t know ahead of time which conferences are going to have the best ROI. I’m working with YottaDB right now on how to differentiate themselves in the crowded database market — and we talk about that process a bit right now. If you’re having trouble standing out in a crowded market, you might want to work with me. 

This special episode of The Business of Open Source with Tatiana Krupenya, CEO of DBeaver, was recorded on site at All Things Open 2024. It’s a short conversation, so we addressed one main question: What is the difference between running an open source company versus as proprietary software company? Tatiana says the difference is big — and it’s complicated. The bottom line: Your OSS can be your main competitor, and your customers have to really see the value in your commercial offering if you want to make sales. ## If you aren't sure how to talk to your potential customers are about why they should use your commercial offering, you might want to work with me. 

This week on The Business of Open Source, I spoke with Stefano Maffulli, Executive Director of the Open Source Initiative, about the definition of open source and… the definition of open source AI. We recorded this episode on-site at All Things Open, so there’s a little bit of background noise. We talked about why OSI felt like it needed to develop a definition of open source AI, how “open source” is enforced, and the thought process behind the definition that the OSI ultimately published. We talked about open data quite a bit — different kinds of data, what kind of information and data is important to researchers and professionals in the AI space, and if there’s a way to include AI models that are trained on proprietary data in the definition of open source AI. If you are interested in open source AI, definitely check out this behind-the-scenes discussion of how, and why, this definition was published — and what the future likely holds for defining open source AI. 

This week on The Business of Open Source, I spoke with Anais Concepcion and Paul Fitzpatrick , the co-CEO of Grist Labs and CTO of Grist Labs. We talked about managing growth of users versus growth of revenue, moving to an open source approach for technical, not technical, reasons, and open-source related product management questions for open source companies. Some really interesting themes we talked about:Moving from a SaaS first approach to also focusing on enterprise sales. Why they did that, what other sales channels that opened and what questions it also forced the company to addressUser personas versus buyer personasThe situations in which Grist is the best option — which incidentally I could not understand from the website or the project documentationThe relationship between the open source project and both enterprise sales and SaaS sign-ups. How open source has been critical for a strategic relationship Grist has with the French government, which has been important for increasing product development velocityGiving up ‘darlings’ or features that they really want to develop but that they don’t think would drive revenueThe difference Anais sees between running Grist and running non-open-source companies — one of the most interesting differences is that users often have a sense of ownership over the project that you just wouldn’t see in a fully proprietary How open source true believers often work in large companies and control budgets, and should not be underestimated. Why trying to sell based on features — including telling yourself that if you just had one more feature, you’d unlock all the sales — was a big mistake. Are you struggling with price anchors fixed around zero dollars, or can’t figure out how to manage the push and pull of developing open source and building a business? You might want to work with me. 

This week on The Business of Open Source, I spoke with Eric Holscher, co-founder of Read the Docs. We had a really far-ranging conversation that included talking about why documentation is often so bad, why documentation should be a priority, but also Eric’s experience building Read the Docs and Write the Docs. This episode was interesting because it’s both about building an open source company and also about the importance documentation for software projects in general and open source projects. Some things we covered included: What is documentation? Is it a marketing effort, is it a part of the project itself? Eric talks about how good documentation for an open source project is a clear signal of a level of seriousness for the project. How Read the Docs was really started to support open source projects, and that is part of why there’s no enterprise installs — either you use the open source code on your own, or you use the hosted product.How Eric sees building in the open as a way to help other people become better software engineers, but that ‘helping companies use Read the Docs for free’ is not the reason he wanted to build an open source company, and he’s still not sure how to feel about the fact that this happens. You don’t get bonus points for being open source or bonus points for being bootstrapped — it won’t prevent a potential customer from using a competitive product because it has a feature that Read the Docs doesn’t have. How open source in general — and even documentation in general — can help build brand value, but it is super hard to quantify and put in a slide in a board meeting to justify an investment in open source. The decision to build Read the Docs as a business stemmed from the pressure that Eric got from having a successful open source project. How they tried very hard to avoid accepting advertisements, but they should have started doing so much sooner because it turned out advertisements is well-aligned with the things they want to be working on. The difference in risk between being open source for a database company versus an app-level open source project like Read the Docs; for Read the Docs one of the risks is the brand damage associated with people running the OSS on-prem and doing a bad job. Are you the founder of an open source company and struggling with figuring out how to manage the relationship between the project and product? You might want to work with me. Enjoy the show? Help it reach more people by leaving a review and sharing with your friends. 

Today on The Business of Open Source, I spoke with Chris Holmes, co-founder and CEO of Greymatter. Greymatter is deeply involved in the open source ecosystem and maintains the Go Envoy Control Plane, but Chris is adamant that it is not an open source company. We had a great discussion about why that is, what it means for the company and the conversations he ends up having around open source with his customers and partner companies. Some particularly interesting points that came up:Customers worry that buying Greymatter could force them to buy enterprise versions of open source software — and Chris thinks that this could be a symptom of the fact that many users expect that they’ll end up being forced to pay for something they don’t want to pay forHow open source companies, and open source projects in general, can be viewed as risky if they are only backed by one companyWho is gonna pay for open source? How if you are going to get away from open source projects being aggressively monetized, big companies have to put their money where their mouth is and pay for open source development directlyWhy and how to get started selling to governments. Yes, the sales cycles are longer but the deals tend to be very sticky once you get in — and why Chris actually finds it easier to sell to the military than to large enterprises. What benefits Greymatter gets from being a maintainer of the Go Envoy Control Plane. Struggling with how to get your product strategy right, and find the right balance between your open source project and your commercial offering? Not sure how your user audience and customer market relate to each other? You might want to work with me. 

This week on the Business of Open Source, I spoke with David Höck, co-founder of Vendure. We talked about switching licenses from MIT to GPL, the ways that Vendure is different from it’s competitors and how architectural decisions can be a powerful differentiator for an open source company. Favorite quote: “You need to build your product together with your clients.” Some specifics we talked about that you should pay attention to: Why they switched to GPL in order to encourage more people to reach out to them and get more visibility into who was using their open source projectOn the other hand, they wanted to make sure that big companies building commercial platforms on top of Vendure’s platform are forced to pay for a commercial license. They also wanted to choose a less-permissive license, but something that was still well-known and wouldn’t cause a lot of confusion among users or potential customersThe difference between being happy with people using your software for free, and being happy with competitors using your software to build a competitive product, without offering any support to the underlying software. Do your customers care about whether you are VC-backed or bootstrapped? We had an interesting conversation about this, because Vendure is bootstrapped. I think we settled on a real important nugget — if your technology is really critical to the company, they will care about your long-term sustainability. Being bootstrapped can help convince potential customers that you are independent and will be sustainable for the long term. The top advantage of open source, David says, is the ability to get fast product feedback from a community. —> I just was talking with someone yesterday about this advantage of an open source strategy, I think it is under-discussed but extremely important. If you’re the founder of an open source company struggling with your product strategy — uncertain how to differentiate between project or product or how to differentiate the entire company in the ecosystem; don’t know what your project is supposed to do for your business; aren’t clear on the target market for your project or product — you might want to work with me. Find out more here. 

This week on The Business of Open Source, I talked with Allard Buijze, the CTO and founder at AxonIQ. We talked a lot about the importance of open source for getting feedback on your product and validating your idea — or not. One of the things we talked about was how the beginning of AxonIQ was tied to the same consultancy that developed Spring Source; Rod Johnson, the founder and CEO of Spring Source was on the podcast a couple months ago and you can listen to that episode here. We talked about: Spinning the company out of the an established company, and in particular how Allard ended up becoming co-founders with his former boss, and got buy-in from their previous employer to found the company after the open source project took open. How they underestimated some elements of human psychology around sunk costs and how it would impact people’s willingness to move from the open source project to the paid productWhy they originally had two products, and then decided to merge them into one single productHow the key turning point for the company was when a new salesperson joined the company and convinced them to quadruple the prices; the result was both an increase in revenue per customer but also an increase in the number of customers. How they evaluated the success of the decision to consolidate the two products into one. How product market fit is a journey, not a destination. How each individual hire can impact the way your product and project is perceived in the world; and it’s important to get alignment on what people are saying. The importance the avoiding confusion among potential customers***Are you leading an open source company and struggling with product strategy? I will help you improve the quality of your conversations, so people understand your product sooner, remain more engaged in the conversation and understand the relationship between your product and project. Learn more here. 

This week on The Business of Open Source, I spoke with Robert Hodges, CEO of Altinity. This is a great example of an open source company that is built on top of an open source project, ClickHouse, that they did not create and still do not have direct control over. Altinity has created and maintains other open source projects in the ClickHouse ecosystem as well, but So many things to unpack with this episode, but a couple I want to call attention to in particular. The origin story of how Altinity’s founder discovered Clickhouse (he did not create it!). I love how Robert specifies that Alexander Zaitsev, one of the Altinity co-founders, discovered ClickHouse because he wasn’t happy with how the database he was using scaled — and by the way, it had nothing to do with how much the database cost. Great example of an open source project winning because it provided superior value, not because it was/is free. Making product strategy decisions based on who the ideal user and the ideal customer is. Robert talked about how Altinity didn’t contribute a particular high-security feature back to open source ClickHouse because while it’s something that very security-conscious organizations would want, for an open source users who doesn’t have major security and compliance requirements it would be confusing and create a worse user experience. Working in friendly competition with the 10 or so other companies that are building around ClickHouse, and how this is one of the unique things about working around open sourceHow Altinity’s customers tend to value the four freedoms of open sourceAre you a leader of an open source company and you’re struggling to prioritize your product roadmap in a way that reinforces your differentiated value… reach out. I help companies figure out the differentiated value of their product and product, where to put the line between the two, and how to use that information to prioritize your roadmap, build a sales narrative and communicate with your market. 

This week on The Business of Open Source, I spoke with Jesse Williams and Brad Micklea, co-founders of Jozu and each with a long history of experience in various open source companies behind them. Even though Jozu is young, there was a lot to learn from these two and their experience in both open source and non-open source businesses. We talked about open source and not open source from CodeEnvy, Red Hat, AWS and Docker. “It’s very hard to get a sustainable open source project if you don’t have a company behind it paying those developers to work on it.” Some things we talked about: Why it’s important to focus on ‘what people get” instead of ‘what you give people.’ This is a fundamental component of effective product strategy and understanding your value prop: You can’t just talk about about the features you’re delivering; you have to connect that and focus on the value that people get from using the product. Jesse talked about the wizard behind the curtain that makes open source projects drive commercial adoption and revenue. You must be able to communicate the additional value of the commercial product; otherwise you will run the company into the group.Many open source companies get taken hostage by the open source community and end up having trouble monetizing because they make give away value in a way that is not sustainable.Users — and especially customers — are often unwilling to commit to a project if they are not convinced that the business behind it is healthy and has a sustainable business model. Open source, open standards and open governance — the relationship between the three and why we should all talk more about open standards and open governance in the open source ecosystem. The importance of really thinking through why you are open sourcing something, something that many companies don’t think through. We wrapped up the conversation talking about how difficult it is to figure out which features to prioritize — and that this is a really hard decision for any startup. This is a big part of my shift to focusing on product strategy in my consulting. If you’re an open source startup struggling with product prioritization and strategy, check out my product strategy offering. 

This week on The Business of Open Source, I spoke with Jimmy Zelinskie, co-founder and CPO of Authzed, which is behind SpiceDB. We kicked off the discussion with a really interesting discussion about whether or not SpiceDB is a database and whether or not Authzed is a database company. At first they didn’t see it that way, but as soon as they started leaning in on describing the product as a database, the more successful they were at getting people in their community to quickly understand what they did and how to use it. But it wasn’t just important for adoption: Once the team realized they were a database company, the business model they should follow seemed obvious, and they could make product decisions without stepping on anyone’s toes. Some topics we covered: How positioning SpiceDB as a database, and Authzed as a database company, helped everything else fall into place, from growth to product strategyWhy people often do want to avoid self-managing critical infrastructureThe difference in ideal user profile and ideal customer profilesHow transparency is the biggest benefit that Authzed gets from having an open source project. How the decision to release an open source project was a direct consequence of positioning the technology as a database.Why it is extremely important to have a decision-making framework for deciding what features will go into the open source or the proprietary features, that is communicated throughout the companyWhy open source companies need to consider the open source users and communities as one of their stakeholders that needs to be represented in strategic discussionsIf you’re the founder of an open source company — or you know anyone who is — and you don’t have a good framework for making product decisions or struggle to communicate internally and externally what the difference between project and product is, I can help you figure that out. Here’s more information. 

This week on the Business of Open Source I had Galeal Zino, CEO and founder of NetFoundry, which creates OpenZiti. One of the most interesting things about the this conversation was the conversation about how to balance whether you’re promoting the product or the project. I talk to a lot of founders who assume that because you have both, you have to promote both. The same goes for SaaS and onprem options — some people think that just because you offer both, you have to build a go to market function for both. This topic came up in the conversation with Joe Duffy as well — in their case, it was the opposite, though. Pulumi started with both open source and commercial product, but put all the emphasis on the open source project for the first two years. Some of the interesting takeaways from this episode: Even though there was no “GTM” focus on the open source project at the beginning, it still had business benefits to NetFoundry, because it made prospects more comfortable that they wouldn’t disappear overnightHow building an open source company is more difficult, because you end up supporting multiple products. But it also can build a flywheel of innovation that you just can’t get any other way. Do you have to get product market fit twice? We had a long conversation about whether or not you have to get product market fit twice in open source companies. We also talked about testing ideas and business models in the actual market, and how lessons learned in other businesses can influence how you approach you take even with open source companies. Thank you for listening! PS: I’m changing my consulting offerings slightly, to focus on product strategy instead of positioning. And I’m looking for beta clients while I figure out exactly what the offering looks like. So if you’re an open source company and you’re looking for a clear product vision, a better understanding of how your product + project are differentiated and how to build that into your roadmap, reach out. 

Pretix founder and CEO Raphael Michel has a completely different philosophy about what he is building compared to the big players in the event / ticketing platform space. We had a great conversation this week about Pretix, how Pretix is positioned compared to big players, and who care about the fact that Pretix is an open source company. Some takeaways: Pretix is a small company, but Raphael feels like it is able to have a much broader feature set than the big players like EventbriteI think of Pretix and Eventbrite as competitors, but Raphael was able to very easily tell me the difference between Pretix and Eventbrite, how that stems from a different philosophical stance about what they are buildingIt took five years for Pretix to hire one person, about 10 years after starting Pretix there’s about 20 people on the teamAbout 20% of people care about the fact that Pretix is open source, and 80% don’t care. But those who do care, care a lot. Figuring out who cares about open source and who doesn’t depends on the target market and can be trickier than you would expect. Even though SaaS is the main business model for Pretix, they have an on-prem offer — and they have on-prem customer.How growth is a huge challenge, both for the company growing and for the customers and partners, because it becomes more challenging to get support.Notice how clear Raphael was about Pretix’s positioning, and how it was different from the big players in the event space. Are you that clear on how your software is different from competitors? Do you have a clear point of view, like Raphael, that sets you apart from the rest of the eocsystem? If not, you might want to work with me. 

This week on the The Business of Open Source, I spoke with Ashraf Samhouri, the CEO and co-founder of Activepieces. Activepieces didn’t start as an open source company — and we started out the conversation by talking about why it was important to take an open source route because Activepieces is building an ecosystem. Some other highlights from the episode: Making software that is both for technical users (engineers love Activepieces!) and non-technical users (who also love Activepieces, because the UI is good)Understanding the different user types, and marketing to them separately and specifically. I challenged Ashraf to tell my why Activepieces is better than Zapier even without the open source piece — it was a challenge, but he made a good argument about having a simpler interface as well as that Activepieces allows you to run on-premWe talked about product led growth and how there is an obvious starting point for promoting an open source projectWhy lead qualification is so importantIf you’re the founder of an open source company and you’re struggling with your open source strategy, with your positioning of your product or project in the ecosystem or with communicating that value of your product and project, reach out — that’s what I help companies with. 

This week on The Business of Open Source, I spoke with Per Ploug Krogslund, who is currently  senior director of developer programs at Docker, and who previously had a number of experiences at the intersection of open source and business. He founded and ran an open source company, Umbraco, for many years, and also led the Open Source Program Office at Spotify. We had a wide-ranging conversation about open source businesses. Some of the topics we covered:What is the right size for an open source business? How do we make space in the conversation about open source businesses for the companies that will never become billion dollar unicorns? The tension, both internal and external, around building open source software and building a company. We talked about this in the context of Umbraco and in the context of Docker — most fascinating to me was that Per felt like as soon as Umbraco had figured this out, it wasn’t as interesting for him to keep working on the company. Why hasn’t there been an “enterprise Backstage” company to spin out of Spotify? We also revisited the question of Microsoft and open source, because Umbraco is an open source company built on a Microsoft stack at a time when Microsoft was publicly hostile to open source. What should you take away from this conversation? There are plenty of opportunities to build small-to-medium size companies around open sourceYou might have to try a lot of different ways to monetize. Per said he felt like Umbraco tested 17 different income streamsThere will be a tension, both internally and externally, about how much to open source. This is part of the game; you have to figure out how to manage this tension but might never feel like you get it perfect. If you’re listening and want help on your open source strategy, finding the right balance between open source and income streams and figuring out what those income streams should be, reach out to see if it might be a good fit for us to work together. 

This week on The Business of Open Source, I talked with Tom Wilkie, CTO at Grafana Labs. We talked about how he had a 10-month run building a startup before ultimately joining Grafana in an acquisition — why he thought that was the right move at the time and how it’s developed since then. But Tom has also had a long career in open source businesses, and we had plenty to talk about. My favorite quote: “I’ve always seen open source as a privilege of successful businesses, so I want to be a successful business.” At Kausal, Tom’s first startup, the focus was on financial sustainability from the beginning, and they had $100k in revenue in 10 months before the acquisition by Grafana. At Grafana Labs, everything is done with an eye on revenue — yes, there are tons of open source projects and tons of investment in those projects, but it has to be tied to revenue. Some other things we talked about: Starting an open source company with the explicit goal of being a successful business, which is not what Tom sees all open source companies doingWhy you should probably start with open source code at the beginning if you intend to open source at all, because otherwise your code will get messy and you’ll be too embarrassed to open itHow integrations are the secret sauce that Grafana Labs monetizes — why that it, and how it allows so much code to stay open source without threatening Grafana’s financial successChoosing a SaaS strategy versus choosing an enterprise on-prem strategy — and how you need to be aware of what your competitors are doing when choosing which is right for you. Thanks for listening! I’m Emily Omier, a consultant who works with company on open source strategy related to positioning and product management. If you’re struggling with your strategy around open source — whether you’re unsure how to differentiate in the ecosystem or not sure what to open source — I can help. Learn more here. 

This week on The Business of Open Source I spoke with Mike Milinkovich, executive director at the Eclipse Foundation. We had a wide-ranging conversation about the role of open source foundations in the open source ecosystem, especially as related to open source businesses. The existence of open source foundations, and how companies decide to engage (or not) with them, is one of the aspects of open source businesses that is truly unique. Perhaps one of the key things to keep in mind from this conversation is that a foundation’s priority is project sustainability — and that is not always aligned with the goal of increasing profits for a company. On the other hand, there are a lot of advantages to contributing a project to a foundation. But founders should be aware of both the advantages and the constraints that working with a foundation entails. Here are some of the things that stood out from our conversation: Investors want a successful business more than they want a successful project; foundations’ priorities are opposite. You have to take into account commercial/financial interests if you’re thinking about sustainability of a project, because you have to put food on the table; projects take time to maintain.The only community you get around an open source project is the one you build — contributing a project to a foundation is not a magic community pill, and building a community takes work. Running a foundation is not free, so if you’re going to contribute a project to a foundation seriously consider supporting that foundation financially.Your customers should also become sponsors or members of the foundation(s) that your project(s) are hosted under, and you should actively encourage them to do so. Listen to the entire episode for even more insights! 

This week on The Business of Open Source, I spoke with Vinoth Chandar, the founder and CEO of Onehouse and the creator of Apache Hudi. We took a pretty deep dive into the relationship between Onehouse and Hudi, a topic that for me is at the heart of building a company on top of an open source project. In fact, whether or not Onehouse is an ‘open source company’ could be debatable; Hudi is an Apache project — it’s not owned by Onehouse in anyway — and Onehouse is not a ‘managed Hudi’ or ‘enterprise Hudi.’ Onehouse solves a problem that is fundamentally not the same problem that Hudi solves. Here’s some other take aways from my conversation with Vinoth: There were both technical and business reasons for the relationship between Onehouse and Hudi; Hudi is a library, and you can’t offer a library as a service. Also, Onehouse does way, way more than Hudi.Out of Hudi’s 16 project management committee members, 5 are from Onehouse. Which means both that Onehouse has a significant presence, but also that it can’t completely control the project. The disadvantage of being in a ‘hot’ market, which means there are lots of big players trying to define the narrative around data lakehouses.Starting Onehouse two and a half too late… or was it actually too early? We had a discussion about timing of starting the company, and Vinoth had arguments for why they started the company too late, but also why it might have been too early. Are you giving away too much? The Onehouse board sometimes thinks so; but what Vinoth thinks was a mistake was not spending enough time educating both Hudi users and the larger community about just how much Hudi can do, instead of letting external players define the narrative about what Hudi does. Check out the full episode for more wisdom from Vinoth! 

This week on The Business of Open Source, I spoke with Joe Duffy, co-founder and CEO of Pulumi.We kicked off the conversation by talking about why Pulumi is open source in the first place — a mix of Joe’s long-standing interest in open source and a feeling like a developer tool like Pulumi just has to be open source in order to be taken seriously. But there was another reason, too: Pulumi’s founders weren’t just in it to build a company, they wanted to transform their industry and build a lasting community, and felt like open source was the best way to do that. Lots of good take aways in this episode, like: Learning from open source legends... uh, actually, learning from Microsoft. Microsoft is an open source giant, right? It’s interesting to hear Joe talk about learning about open source business strategy from Microsoft, precisely because Microsoft does not make money directly from VSCode, and also does not invest millions of dollars into R&D just to be nice. “If you’re going to try to build a business with open source, you need to be very thoughtful and very strategic about it.” The founding team at Pulumi sort of iterated on figuring out the business model, but to a large extent they just thought about it until they had an Aha! moment. On the other hand, they didn’t go public until they thought they had a winning strategy for building an open source business. In the case of Pulumi, there’s a client side and a server side, so it made sense to build in a natural division between the two. This also made it so users were less likely to feel like Pulumi was holding back essential features in order to drive sales. “The way I always view it is the thing you’re selling has to stand on its own” Pulumi started a company, an open source project and a commercial product at the same time. Joe’s not sure he would recommend that approach, but it worked for them. “Figuring out the relationship was importnat, but actually the most important thing was to have a successful open source technology.” One thing I wanted to pull out: Even though Pulumi launched the open source project and commercial product at the same time, they focused all their efforts in the first two to three years on getting the open source project off the ground. Many founders I talk to think that once the commercial product is out there, you are forced to build a GTM team… but you don’t have to. In fact, I think the strategy of having the possibility to buy the commercial product while focusing the company’s energy on the open source software in the beginning is brilliant. Result: “We were able to create this immense funnel of inbound commercial interest, even when that wasn’t really the top level focus.” Even if you’re primarily a SaaS company, you can still offer an enterprise on-prem version for customers with hard requirements to host themselves, like air-gapped environments. Just because that option exists doesn’t mean you must build GTM motion for it, though. The business value Pulumi gets from the open source project is: generating leads, building the company’s brand, and also recruiting top-level talent. The fact that developers building the tool are so close to developers in the community is also a huge advantage. Listen to the full episode, it has a huge amount of great insights!

This week on The Business of Open Source, I spoke with Tyler Jewell — for the second time, now. Last time I spoke with Tyler, he was an investor at Dell Technologies Capital, he’s since taken over as CEO of Lightbend. We talked about a lot, but there was a definite theme to our conversation: License changes. Lightbend had been running an open core model, with the open core using a permissive Apache license. The company’s open source project, Akka, is massively popular. Lightben had about $13 million in ARR. But it was spending over $20 million per year, mostly of on R&D and then GTM. And they had a churn problem; and the churn problem was that customers would stop buying Lightbend’s product, but they would stay with Akka, because it was good enough. Why did this happen? The added proprietary features weren’t valuable enough for companies to pay for, especially in the face of budget cuts. And because the community was quite mature, it often started to duplicate these capabilities. And then the company faced a near-death experience in 2021. At the same time, usage of Akka was only growing, while the company was facing potential bankruptcy. Investors saw the potential and didn’t want to give up on the company, but it was clear to the board of directors that something needed to change — and that the thing that wasn’t working was the business model. So they changed it. There’s a couple things I hope people can take away from this. If the difference in value between your commercial product and your open source project isn’t big enough, you’ll have a rough time building a profitable company. Sometimes the alternative to changing a license is bankruptcy; bankruptcy ultimately is not in anyone’s best interest, not the company, not the community’s, not the customer’s. Offering a cloud option can work, but it’s an entirely different business, and trying to build it up while the company is in a crisis and expecting it to save the company is only realistic if there’s a good overlap between the market for the cloud offering and the open source project; in this case, there wasn’t good overlap. The license options open to you depend on what the actual software does. And if you’re going to enforce the license at all, you need to have some visibility into where it’s installed, which, again, can be challenging depending on what kind of software you’re dealing with. Changing an open source project’s license is not a trivial undertaking. You have to hold copyright to the code, and you better hope that you’re structured your contributor license agreements correctly. You also have to do the change on a new release — and it’s more likely to work if the new version is different enough from the previous one that people really want to update. If you’re going to make a license change, you might get backlash, but if being transparent and honest can go a long way towards minimizing the PR disaster. So what happened? Churn went down, revenue is nearly doubled and Tyler projects that this year will be cashflow positive. This summary doesn’t do it full justice, though, so check out the full episode!! 

This week on The Business of Open Source I have an episode I recorded on site at AI-Dev in Paris with Justin Cormack, CTO of Docker. We finally get around to talking about AI at the very end of the episode, but otherwise we talked business and open source and how Docker manages both. Here’s some of the take aways from the episode:There are upsides and downsides to being an open source company, and you should absolutely make sure you are leveraging the upsides. Because they don’t necessarily translate into business value automatically, you have to be intentional to make that happen. It’s often a good idea for open source businesses to create a commercial product that is complementary to their project, so that if usage of one goes up usage / adoption of the other goes up, too. This is in contrast to an open core model, where the open source project can easily end up being crippled so that people are incentivized to buy the closed source license. If you want to get to $100million ARR, you can either sell $10 subscriptions to 10 million people or you can sell $100,000 subscriptions to 1,000 people. Both get you to the same revenue number, but the business model is very different. We also talked AI and open source, given the event we were at. 

This week on The Business of Open Source, I spoke with Karthik Ranganathan, founder and co-CEO of Yugabyte. This is the second time Karthik has been on the podcast, but since three years had passed I thought it’d be a good idea to catch up and see what’s changed at Yugabyte and how his perspective on the open source commercial ecosystem has changed. Some really cool topics came up in this conversation. For example: Why engineers don’t choose databases based on features (and how this is related to why so many databases are open source This was super interesting, because I’ve seen a lot of conversations in the developer tools space about how developers choose their tools based on the features the tool has, and you should therefore market/sell based on features (unlike marketing/selling to any other market). I think this is bullshit and based on a misunderstanding about the difference between a feature and a benefit. Going back to the database market, we talked about how ultimately database users need to develop an intuition around when a particular database is the best choice, and that it takes time to do so. Choosing a database is about choosing what to prioritize for a particular application, and in a way Yugabyte presents its users/customers with a way to prioritize what’s important, simplicity or flexibility. Companies that want more simplicity get something that’s fully managed (and pay for it) companies that prioritize flexibility above all else are a better fit for the open source. The database is the same, regardless of whether someone is using the pure open source version or the fully managed service — and it’s important to Yugabyte that everyone gets the same core functionality. How the role of open source and it’s value for Yugabyte as a company has changed as the company has matured, and in particular how it’s a way for people to try out Yugabyte first, and then reach out. Why Yugabyte has invested in making sure the open source user experience is excellent — because they want users to get value out of the project immediately; no one has time to spend four days figuring out how a new database works. This is part of why they think the open source project has become a lead engine. The importance of messaging in helping people understand quickly what to expect from the project and minimizing the amount of time it takes for them to get value out of it. Whether or not Yugabyte was a bit early to the cloud native party, and the pros and cons of being early. And much more! 

This week on The Business of Open Source, I spoke with André Eriksson, founder and CEO at Encore. We talked about how open source develops trust, something I also discussed in the episode I recorded with Reshma Khilnani. For Encore, it’s subtly different, though. In the case of Medplum, open source is a differentiator in a market that’s used to black boxes, for Encore, open source is tablestakes in a market that won’t adopt a completely proprietary software. We talked about: Launching with a cloud platform from day one — not the open source project. On the other hand, open source is also important because often users and customers have to modify things to get it exactly right; the flexibility is a critical part of the platform’s draw. The challenge getting contributions, which André doesn’t find surprising, especially because it’s a project/product that solves problems for companies, not hobby projects. Having one brand for the open source project and the product, which can make it hard to communicate the difference between them. Ensuring that the open source project and all of the features in it are useable without being dependent on the commercial product — which is not always easy. Finding the right balance between avoiding crippleware and still having enough of a difference in value between the open source and the commercial product to sell it is a core challenge. The biggest risks from open source, which André kicked off by talking about the difference between what you perceive as a big risk and what objectively is — this is a distinction that I think is super important to understand in life and business. Ultimately he settled on a big risk just being that you build something that isn’t valuable or differentiated enough for people to pay for. Communicating the value proposition clearly is their top challenge at the moment. Check out the full episode for some serious insights into what’s working and what’s a struggle at Encore. 

This week on The Business of Open Source I spoke with Saurav Pathak, chief product officier at Bagisto, about a very different kind of business relationship with open source — and open source software incubated in a larger company. There were tons of interesting nuggets in this episode, but some things I wanted to call out are:For open source projects, the tech stack that the project is built with can in fact be a differentiating feature. This is unique to open source (and has come up before, both in my consulting work and in podcast interviews). Users might want to choose a project because it’s written in the language they are familiar with, even if the functionality is exactly the same as a competing projectThe difference in needs between the merchants (who just want to get their ecommerce store up and running) and developers building ecommerce platforms, who was worried about being able to build extensions How an open source company like Bagisto fits into the larger commercial strategy for the parent company. Build a community of developers versus building a community of merchants, and why both are important for a project like BagistoHow Saurav manages the tension between adding features that people want and not building an overly bloated product, including how to manage this tension when someone wants to contribute a feature that the core team may or may not want. It’s always interesting to me to see different models for open source companies, and Bagisto certainly is a different model. Especially after last week’s episode with Tanmai Gopal, which had a much more classic story. 

This week on The Business of Open Source I spoke with Tanmai Gopal, co-founder of Hasura. We talked about how Hasura grew out of Tanmai’s previous company, which was a consulting company. I like to call out examples of really novel open source businesses, but in fact the thing that stuck with me from the conversation with Tanmai was that Hasura is going the ‘classic’ route… and it’s working. What does the ‘classic’ route look like to me? It’s an open source project that targets individual developers and a commercial product that targets teams and teams of teams. It’s having additional network security features in the commercial options. It’s using the open source project as a growth engine and getting leads from companies that depend on it. It’s also using the open source project as a way to get feedback on the product roadmap. Here were some of the takeaways from our conversation: It’s a lot easier to sell a product if your customers see it as mission-critical. One of Hasura’s first inbound leads was from a Fortune 100 company who said they’d be unable to ship any software for two weeks if Hasura went down — and so they wanted to make sure the team behind Hasura was serious and also wanted to pay them to make sure they didn’t go down. For Hasura, the first clear difference between open source project and commercial product was that the open source project is for individual developers but the commercial product is aimed at the team level.Even for the cloud hosted edition, the product with ‘developer-level’ focus is free. In fact, if you go to the Hasura CE product page, the CTA asks you to use for free on the cloud. Tanmai said this is an intentional choice because they want to reduce friction for people to test it out, and the fastest way to get up and running will always be to use the cloud version, not the open source. We talked a lot about the control plane versus the data plane — all the editions have the same functionality at the data plane level. But the control plane, where people are collaborating — that is commercial only. The open source project can be a great way to stay close to your users / customers and use their feedback to constantly refine your product roadmap. In fact, this can be a main advantage of being open source, because it is the only way you stay close to your users and get their feedback — otherwise you would often only talk to the buyer, who is likely an exec with a big budget but not using the technology on a daily basis. This doesn’t mean open source doesn’t create liabilities for Hasura — it does, and those liabilities have to be managed. And Tanmai is frank about the fact that creating enough value on top of the open source project without crippling the growth engine is a tough balancing act. Pay attention to what your best customers are doing! That has informed some really important product decisions for Hasura — and it took them way to long to figure out the unique way their happiest customers were getting more value out of Hasura than other users. Definitely check out the full episode for more insights from Tanmai! 

This week on The Business of Open Source I spoke with Reshma Khilnani, CEO and founder of Medplum. Medplum is an open source electronic health record development platform, and one of the things I loved about this conversation is that Reshma is so focused on the healthcare industry — a level of focus that I find relatively rare in open source companies. And not only that, when I asked her if she thought the company’s focus was too narrow, she responded that actually she often worries that it’s too broad. Another thing I really liked about this episode is that open source, for Medplum, is about trust and transparency, not growth. Medplum’s customers, Reshma said, just don’t mess around with free software that doesn’t come with compliance certificates and some kind of support guarantees. It’s a great episode to come on the heels of the episode with Adam Jacob, who talked about the difference between code, software and a product — that is a distinction that Medplum has clearly nailed. Other takeaways if you’re running an open source company: Reshma is clearly really passionate not just about developing software, but about building software for the healthcare industry. She can also clearly articulate why her customers are not well served by the standard, off the shelf development platforms that can be used by any industry. This industry-specific expertise is really powerful, and quite frankly something I don’t encounter very often. Even though there are different legal regimes in different countries, the underlying needs are pretty similar, so even for something as specific as healthcare companies it’s not particularly challenging to provide a solution that meets the needs of customers around the worldMedplum is Reshma’s third company, but her first open source company. She talked about how one of the key differences between building an open source company and a her previous companies that that the company has to pay incredible attention to the implementation details that at any other company no one would care about. Yes, you’re building a product company… but that doesn’t mean you should never sell professional services. Reshma says that one mistake she made was being too rigid about not selling any professional services at all, and ultimately they ended up offering packages of services to help customers get their implementations running. One last bit of info: Reshma compared the conversation around open source startups now with “internet startups’ in 2013. Will all startups be open source startups in 10 years? I guess we’ll see. 

This week on The Business of Open Source, I spoke with Adam Jacob, founder and CEO of System Initiative and formerly the CTO and co-founder at Chef. We had a wide-ranging conversation that at times veered into the philosophical (what is the meaning for ‘strategy’?) but also has plenty of concrete, practical insights. We talked about:The difference between being the CTO and being the CEO of a startup, even if you’re a founder in both cases (and why Adam wanted to try out the CEO role this time)How Chef started out open source primarily because Adam and his co-founder really believed in open source values How they figured out a business model for Chef, but that it really felt like they were just making it up was they went along — and how he suspects that’s what most people doGetting disrupted four times, and trying out many different business models along the wayWe also talked a lot about total addressable markets, serviceable available market and serviceable obtainable market in the context of open source companies. Three key takeaways: The software is not the product. A product is the entire experience of using the software, including how it is installed, how the team is onboarded, what compliance certifications you have, what happens if you have a problem, etc. As a vendor of open source software, you need to focus on creating and selling a whole product and take the focus away from the code. You can have 100% open source code and still sell a product, because they want to have a complete experience with support and compliance paperwork etc — and because they value buying those things from the same people who are writing the code. The way to calculate TAM is to multiply the number of people who want to buy a product by the average selling price of the product. When you phrase it this way, it becomes obvious that the TAM for any open source software is zero, because the average selling price is zero. If you enjoy this podcast, please share with other founders and leadership in open source companies! And if you like the idea of open source lawyer trading cards, reach out to Adam and he’ll start a physical product company next :). 

This week on The Business of Open Source, I had a very different sort of guest — Mark Boost, the CEO and founder of Civo. We talked not only about Mark’s history as an entrepreneur, but also Civo’s recent acquisition of KubeFirst. This topic caught my eye because it’s not often I get an offer to talk with an acquirer of open source companies, and I wanted to take him up on it. (Though if you missed it, I also talked to Thomas di Giacomo about this topic, and it was fabulous). The that is different about this case is that Suse is fundamentally an open source company, but Civo is not, and this was the first time that Civo had acquired an open source company. We talked about:How the relationship started long before anyone was thinking about an acquisitionWhat the 1 + 1 = 3 equation looked like in this particular caseHow it makes sense for an infrastructure company to acquire a complementary software company What it means to hire a pre-revenue open source companyIt’s a relatively new acquisition, so we did a pre-mortem on it together, and Mark talked about what could go wrong — a super interesting process. Lastly, we talked about Civo’s open source projects and what business value the company gets out of it’s relationship with open source in generalCome join me at Open Source Founders Summit if you want more conversations about building open source companies! 

This week on The Business of Open Source, I spoke with Brian Fox, co-founder and CTO of Sonatype. In addition to having a really interesting discussion about the usual topic of how to build a business around open source software, we also had a good conversation about security — it was hard to avoid, because we recorded this right after the xz backdoor discovery, and software supply chain security is kind of Brian’s thing. Business-wise, though, we also covered some really cool topics. Including: The tension between an open source project that’s “too good” and yet the need for the sales team to close dealsIn some ways, the fully commercial, closed-source products in Sonatype’s product line are more straightforward… but there are challenges that go along with a pure closed-source approach, too, especially for a DevTool company. Choosing your relationship with open source depending on who your target user / target buyer isPivoting to a top-down sales motion because the bottoms-up motion just didn’t work; and how that means the features that sell aren’t always the features that get usedWhat Sonatype gets out of it’s relationship with Apache Maven and open source NexusHow do we solve real problems, and how do we solve them for real? Keeping in mind that no one buys what they need; they only buy what they want. Check out the full episode, and come to Open Source Founders Summit if you want more opportunities to talk about about business and open source. 

This week on The Business of Open Source I had Rod Johnson, founder/CEO of Spring Source and creator of the Spring Framework (as well as board member of many other open source companies) on to talk about Spring, monetizing open source and what’s changed in the open source ecosystem since 2008. Key takeaways:Consulting was burning the entire team out, and that threatened the health not just of the consulting business, but of the open source project as wellAn amazing salesperson can often sell anything, but that doesn’t mean that you’ll be able scale, because your entire sales team is not likely to be incredibly brilliant Spring Source ended up not monetizing Spring at all — but rather worked on monetizing with products that were complementary to Spring. “We monetized Spring by not monetizing Spring, by using it to open the door” The moment that the company really started to see success as a product company was when the team stopped thinking about what they wanted to build and instead focused on what customers where telling them that they wanted.The risk of having a bunch of very good engineers on your team is that they’re excited about solving hard technical problems — but your customers might want something that is not very technically challenging or interesting. A major part of the job of a company leader is to talk to your team and get them on board with your plans The environment around monetizing open source projects has changed — there are things that worked in 2008 that wouldn’t work today, and things that didn’t work then that would be fine nowIf you love (insert your favorite open source project here), it has to have a sustainable economic modelIt’s really critical to have a rationale behind what functionality goes in your product and what goes into your open source projectAt the end we talked briefly about Open Source Founders Summit, a conference for leaders in open source businesses happening this May 27th and 28th in Paris. 

This week on The Business of Open Source, I spoke with BoxyHQ co-founder and CEO Deepak Prabhakara. We talked about a number of things, from BoxyHQ’s relationship with its open source project, called SAML Jackson to how to build a growth flywheel and how that flywheel does and does not depend on a community. Is BoxyHQ a security company? Does it matter either way? Starting the open source project at the same time as the company, and why they did it that wayThe relationship between the user community and the customer communityBoxyHQ as the anti-platform — instead of trying to build a platform, which is the default goal for a lot of companies I speak with — they are explicitly trying to build a more a la carte experience for usersThe challenges of community building around a project that isn’t sexy and how to build community that isn’t project-focused, but rather that’s focused around a problem spaceMaking the mistake of assuming your startup is completely unique and unlike any others! We talked about much more as well, and it’s definitely an episode you should check out. 

In the second episode that I recorded on-site at KubeCon EU in Paris, I spoke with Alex Olivier, CPO and co-founder of Cerbos. This was not a general discussion: It was focused on the process that Cerbos went through to figure out pricing. Here’s what we talked about:The first step of figuring out your pricing is not the number, but rather what you’re charging for. Is it API calls, or amount of data you’re processing, or monthly active users, or monthly active principles… that last one is what Cerbos is charging forWhy it’s important to have a pricing system that allows potential users to be able to roughly estimate for themselves how much using your software is going to cost themYou also want to avoid pricing models that encourage people to look for ways to hack around to find ways to lower their monthly costsWhy your pricing model should be about the value you’re providing, not about how much it costs you to run your systemDiscovering what your price anchors are / what your customers are comparing you toCheck out the full episode for more details! And join us at Open Source Founders Summit for more discussions about the specifics of pricing for open source companies. 

This week, I had a dilemma: should I prioritize the episode where I spoke with one of the MariaDB co-founders, in which we discuss setting up a foundation as a way to ensure that the project continues to be open source in the future, no matter what (relevant given the Redis announcement); or should I prioritize the conversation with one of the founders of Sonatype, one of the oldest companies in the software supply chain security space, in which we talk about the xz debacle. I went with Patrick Backman, general partner at OpenOcean and co-founder of MariaDB, because it’s a little more in my lane. (The conversation with Brian Fox will have to wait for next week!). One of the main things we discussed was the relationship between the MariaDB foundation and the MariaDB company. Including: Why they decided to put MariaDB open source in a foundation, and why they created a separate foundation instead of putting it in an existing foundation The relationship between MariaDB foundation and company today, including the financial relationshipMariaDB was founded by the founders (and some key employees) at MySQL; we also discussed the lessons learned at MySQL that the team then applied at MariaDB. And we talked about customer acquisition, one of the things that Patrick thinks the team had learned at MySQL and therefore had pretty well figured it out at MariaDB. Patrick’s co-founder Monty Widenius is one of the speakers at Open Source Founders Summit — if you want to go into more details on with the lessons from MySQL and MariaDB, as well as lessons from being an investor at OpenOcean, join us in Paris May 27th and 28th at Open source Founders Summit. 

This week on The Business of Open Source, I have an episode recorded on site at KubeCon EU in Paris with William Morgan, CEO of Buoyant. We had a fabulous conversation, which touched on some touchy subjects, including Buoyant’s slightly changing relationship with Linkerd. But we talked about:Being an open source mercenary, but also being dedicated to making Linkerd a ‘proper’ open source projectFeeling like open source was table stakes for a company in the space Buoyant plays in. This is an under-appreciated reason for being an open source company — you feel like it’s just expected in the market you play in, so you do. Waiting too long (or is it too long?) to commercializeStarting out by selling support, but the problem with that because Linkerd worked well and people kept saying that they didn’t need support because they never had problemsCompeting against Istio, which was backed by the Google engine and how that made Linkerd / Buoyant an underdog (or cockroach). For those of you who haven’t been following Linkerd / Buoyant… Buoyant recently announced that they would be doing edge releases for Linkerd, but not stable releases. We talked about why they made this change and how the ecosystem responded. Check out the full episode! 

This week on The Business of Open Source I talked to Heather Meeker, General Partner of OSS Capital and author of From Project to Profit, How to Build a Business around your Open Source Project. We talked about some things that I entirely agree with, and then there were some points I challenged Heather on — all in all, it was fabulous conversation. Here’s what we covered:Why you should think of your project and product as two different products so you avoid thinking of your open source project as a loss leader and get your incentives rightThe differences between supplementary and complementary products, and how the relationship between project and product is often complementary, even in situations where that relationship is non-obviousWe disagreed about pricing — should COSS businesses have cheaper products than closed-source companies? Why cares about your being open source? Are open source companies more capital efficient? Heather says so, but I’m not convinced. Heather also talked about how they select companies to invest inDo open source companies by definition do a better job at paying attention to user / customer demand? Check out the episode, and check out more about Heather Meeker here: Personal websiteOSS CapitalLinkedIn

This week on The Business of Open Source I spoke with Pranay Prateek, co-founder of SigNoz. Pranay talked about why open source is important to SigNoz's business, why it's super important to deliver value quickly, even for an observability product, and why founders shouldn't think of open source just as a distribution model. We also covered: How SigNoz is differentiated in the crowded observability marketWhy Pranay thinks being open source makes it much easier for developers to play around with the project and get to know it; so for them it made intuitive sense that the company that they’d build an open source company Why Pranay also thinks open source enables much deeper integrations, which is critically important for an observability company like SigNozHow one of their first lessons / mistakes was releasing an open source project that didn’t work well on an individual developer’s laptop, because it used too much resourcesThe GTM market, and the challenge delivering value within 30 minutes of trying out the project/product for an observability tool that provides maximum value during an incident — but no one is going to be trying out a new tool during an incident situation Why their first commercial product was a cloud offeringAnd much more! And if you’re interested in more discussions of open source businesses, make sure to join us at Open Source Founders Summit this May. 

In this special episode to promote Open Source Founders Summit, I went deep with Thomas di Giacomo about how open source companies can position themselves as attractive acquisition targets for strategic buyers. If you are the founder of an open source company and you have the idea of being acquired even in the back of your mind, this is a must-listen episode. Whether or not you plan to join us May 27th and 28th in Paris, though of course we hope you do join us. By the way, at OSFS Thomas is going to lead a workshop on the topic of being an acquisition target for open source companies. It will be interactive, which means you can ASK QUESTIONS. In this podcast episode, he talked about: Exits 101. You probably know that strategic buyers usually pay more for companies than other types of acquirers, but we talked about different exit strategies and what they entailWhy strategic buyers acquire businesses (in general) but also why you, as the business seller, need to understand every specific potential acquirer’s story and goals so you can see how your company fits into their strategic planStrategic acquisitions are about 1+1=3… so you have to know what your buyer’s “3” isWhy it’s important to be self-aware and know your own goals before you sign any acquisition paperworkAnd tons more… If you want the chance to ask Thomas about strategic acquisitions for OSS companies — as well as to talk about sales strategies, lead generation and more — join us at OSFS 24 in Paris this May 27th and 28th. —> Get your invite here. PS the audio was a little quiet, but so if you’re having trouble hearing turn up the volume, it’s worth it. 

This week on The Business of Open Source, I spoke with Zach Wasserman, co-founder and CTO of Fleet. This was a fabulous episode for many reasons, but then again I never do crappy episodes, right? The first thing I wanted to call your attention to is that Zach talked about how he’s building an open core business because building an open source business is what he wants to do. When his previous company turned away from open source, Zach left to do consulting around OSquery and Fleet (the project). I always like to talk about how companies / founders need a solid reason for building an open source company… and “this is the kind of company I want to build” is a very good reason. (“Everyone else is doing it” on the other hand, is not a good reason). Everyone puts constraints around the type of company the want to build, and as long as you are intentionally about the decisions, there is nothing wrong about this, business-wise.Second, we talked about the tension that exists between making a great project and still leaving room for a commercial product that people will pay for, and Zach talked through how Fleet uses a buyer-based open core strategy to decide which functionality to put in the enterprise version or in the open core. We also talked about:Leaving his first company, Kolide, when the founders had divergent visions about where the company should goHow his investor arranged a ‘co-founder marriage’ for Zach and his co-founder Mike McNeilHow the transparency aspect of open source can be extremely important, especially for anything in the security spaceLastly, Fleet happens to be a former client of mine. You can check out what Mike, Zach’s co-founder, said about working with me here. And if you’re interested in more conversations like this… but in person!!! you should come to Open Source Founders Summit May 27th and 28th in Paris. 

Slightly different The Business of Open Source episode today! I spoke with Patrick McFadin and Mick Semb Wever about the relationship between Apache Cassandra and DataStax — how it was at the beginning and how the relationship has evolved over the years. We talked about:— How there was a dynamic around Cassandra where many of the many of the contributors ended up being sucked into the DataStax orbit, simply because it allowed those contributors to work on on Cassandra full-time— How there can be tensions between different stakeholders simply because everyone involved ultimately has their own interests at heart, and those interests are not always aligned. — How it is actually hard to really have open discussions about new features, and how often there can be a new feature dropped in a project that clearly had been developed behind closed doors for some time, and sometimes that created tension in the community— Some open source projects are just too complex to be hobby projects — Cassandra is so complex that you won’t become a code contributor unless you’re working full-time on Cassandra, because that’s the level of skill you need to keep up. — How the relationship between a company and a project often changes as the technology matures. — The importance of addressing tensions between company and community head-on, as adults, when they occur — as well as why you need to remember to treat people as humans and remember that they have good days, bad days, goals and interests. Patrick on LinkedInMick on LinkedIn

In this episode of the Open Source Founders Podcast, I talked with Frank Karlitschek, CEO and founder of Nextcloud. Frank is going to be talking specifically about lead generation at Open Source Founders Summit, but in this episode we took a slightly wider view and talked about go to market, for open source companies in general and specifically for Frank’s experience at Nextcloud. A couple other things to pull out as takeaways. First of all, Frank talks about how he originally planned to target big companies who wanted to keep their data private — but as it turned out, most big companies don’t really care deeply about keeping their data private. On the other hand, the public sector and universities really do care, and those have ended up being a huge part of Nextcloud’s customers. Frank also talked about the rather obvious differences in needs between home users and big organizations. Nextcloud has some customers with millions of users — their needs are different from a home user. And as far as home users go, Frank says these users are obviously never going to pay Nextcloud anything. On the other hand, they have built mechanisms into the software to nudge open source instances with over 1,000 users to get in touch to talk about a commercial relationship. He also talked specifically about the importance of really talking with your customers and your users — and incorporating their feedback into your product roadmap. For open source companies, you have so much more information and feedback than proprietary companies, and you should take advantage of that to inform your go to market strategy. We also talked about how the millions of home users who will never pay Nextcloud are still extremely valuable to the company — and why Frank think it’s really wrong to think of pure open source users as just leads to be converted. And much, much more. If you’re the founder or leader at an open source company, and you want to be a part of more discussions like this, join us at Open Source Founders Summit May 27th and 28th in Paris! 

This week on The Business of Open Source, I spoke with Percona CEO Ann Schlemmer. This episode was recorded on site at State of Open Con in London, outside in a van! There’s a ton of great info in this episode, too. First of all, Ann talked about being a ‘suit’ in a geek’s world and her career trajectory that led her to lead Percona. She also set the stage around the constraints that Percona has chosen for itself: To be completely open source and only sell services, and to be completely bootstrapped. And what the ramifications of those decisions are for the business. Here’s some concrete takeaways:The key to thinking about managing the tension between creating a project that’s high quality and still being able to sell services on top of that is to ensure that the services really create valueThere’s a difference in profile between happy anonymous users and happy customers — often customers are operating at scale or are working in companies that simply always have to have support for critical software. But just as importantly, customers are often not database experts —they just need a database that works, and can turn to Percona to be their database experts. Founders are often more emotionally attached to aspects of the company that a non-founder CEOs like Ann can sometimes be more analytical about what’s working and what isn’tCollaboration isn’t automatic, and how to make it actually happenHow Ann decides what problems to collaborate with others on, what they don’t collaborate on and when in the project / feature lifecycle they look for collaborationWe also had a bit of a random conversation about controlling status in relationships — the book we talked is Impro: Improvisation and the Theatre. And talked about how founders who are ready to step down as CEO can find a replacement and manage the transition. Ann’s links:LinkedInPercona 

In this episode of The Business of Open Source, I talked with four-time entrepreneur Mike Schwartz, CEO and founder of Gluu as well as the host of Open Source Underdogs podcast, about his long career in entrepreneurship. Here’s some particularly interesting things to take out of this episode:“Beware an entrepreneur’s second company.” — Mike says his second company was a disaster because he tried to apply the lessons from the first company in the second, and often those lessons aren’t right for the new businessGoing all in on being a product company — the toughest year in Gluu’s history was when they decided to stop consulting and make it or break it as a product companyWhy it’s a good idea to look at the market analytically and start a company in a market you’ll be able to compete in without a huge number of featuresWhy Gluu actually has more features in the open source version than the enterprise edition — because the open source distribution gets features that are in beta whereas the enterprise customers need a product that is 100% fully baked. Why Mike doesn’t believe in making the enterprise product more ‘scaleable’ — the open source project should be just as scaleable as the enterprise productThis episode was recorded on site at State of Open Con 24, outside in a media van! 

As part of the preparation for Open Source Founders Summit, I’m interviewing both our speakers and our attendees for a special podcast that’s hyper focused on one thing. In this episode I spoke with Peter Zaitsev, founder of Percona, about sales. We talked about the specifics of sales as a bootstrapped company — which means sales are exceptionally critical from the beginning, and how sales changed as the company moved from a consulting model to a support model on the open source software that Percona creates. Also, this episode was recorded on site at OpenUK’s State of Open Con! Here’s the concrete takeaways from this episode: Even before starting the company, Peter had built up a personal brand as a MySql expert — this is what made it possible for him to get consulting gigs pretty much immediatelyPeter’s personal brand wasn’t just around MySql in general, but was very specifically focused on MySql performance optimizationHow a growing team meant that the sales process had to get much more disciplined — and deal sizes had to get bigger so that it’s worth the sales team’s time How to align sales incentives with your business goals — how it’s important to adjust sales quotas and incentives so that sales people don’t oversell, which can hurt your reputation long-term, and don’t sell long-term agreements at too much of a discount. Why it’s important to separate out your revenue that comes from new customers and your revenue that comes from customer renewals, and how to do so in the organizationIf you want more opportunities to go in-depth on sales for open source companies — and to discuss sales and other aspects of business development with other founders, join us May 27th and 28th in Paris at Open Source Founders Summit. 

Garima Kapoor, COO and co-founder of MinIO, joins me to share her journey from investor and advisor to co-founder of MinIO and the wealth of knowledge she’s amassed along the way. In this episode, Garima explains how her experience in finance and belief in the power of open source helped MinIO to break into the data storage market. She also reviews the challenges she faced as a first-time founder and what others can learn from her mistakes and take away from some of their own. Since Garima started her journey with MinIO as CFO, she outlines that role for me and explains how she thinks a CFO should operate in an open source company. In reviewing mistakes she’s seen from other founders, Garima states some principles that create the “foundation for any open source business.”  - “You should always be very honest to your community. You should always be very transparent to the community”Highlights:Garima introduces herself and explains why she and her co-founders started MinIO (1:31)Garima describes how the MinIO founders honed in on a problem they wanted to solve (3:55)How the MinIO founders used open source crack the market (6:37)What triggers a user to purchase a commercial license for the product (10:33)Garima explains why she and her cofounders were set on their open source strategy from day one (11:35)Garima explores the differences between being an investor and advisor for other companies and starting her own. (13:25)Garima shares go-to-market advice for other founders (15:21)Garima outlines her strategy for building on small successes (18:38)Garima explains why she started as CFO for MinIO and breaks down the role a CFO can play in a new company (21:46)Why Garima thinks a CFO’s role remains the same in an open source company as compared to a proprietary company (27:17)How to avoid competing with your open source product when you also have a commercial offering (34:06)Links:GarimaLinkedIn: https://www.linkedin.com/in/garimakap/Twitter: https://twitter.com/garimakapCompany: min.io

Today I’m joined by Federico Wengi, who is a Partner at SquareOne VC. In this conversation, Federico sheds light on the conversations he’s had with many companies who consider making the pivot from a closed-source business strategy to an open-source strategy. Federico explains why it’s so uncommon for businesses to make that pivot, and lays out the challenges businesses face when they consider taking on such a change. Federico also gives a great example of a company that did successfully complete the pivot to open source, and the choices they made that led to their success. Federico and I discuss why this is one pivot you can’t take back, and also why it won’t solve all your problems. Despite all that, Federico shares his optimism for the value of open source and the importance of at least considering this strategy when you need to make a change. Highlights:Intro (00:00)I introduce Federico, who is a Partner at SquareOne (00:59)Federico describes his role at SquareOne and the areas of investment they focus on (01:28)What Federico typically sees when companies move from closed source to open source (04:42)How important conversations come up about business strategy and open source versus closed source (07:40)Why many companies end up not pursuing an open-source strategy (11:17)Federico tells the story of a company he worked with that made the leap from closed source to open source (15:03)The most critical things businesses have to do in order to utilize an open-source strategy (16:23)What decisions led to success in the company Federico helped shift from closed source to open source (18:09)The psychological challenges leaders face when considering making a pivot to open source (23:54)Federico shares the advice he would give to a founder who’s considering an open-source strategy (26:40)How you can connect with Federico (31:40)Links:FedericoLinkedIn: https://www.linkedin.com/in/federicowengi/Twitter: https://twitter.com/federicowengiCompany: https://squareone.vc/