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Ask Slashdot: Viable Open Source Models For Early Startups? 203

Posted by timothy
from the what's-the-mojo-kenneth? dept.
New submitter rchoetzlein writes "I am a software developer working independently for five years on various projects, and preparing to go public with my first product. Everyone is telling me I should make it open source. I would love to, but I just don't see how an early startup can afford to become profitable on service alone. My projects are no longer small-scale hobbies, they are large frameworks, and I need to make a living. Any ideas on business models that would allow me to open source while guaranteeing I can feed myself?"
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Ask Slashdot: Viable Open Source Models For Early Startups?

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  • Sunset (Score:5, Interesting)

    by shentino (1139071) on Sunday April 08, 2012 @06:14PM (#39614459)

    Try sunsetting your proprietaryness.

    Have your product be proprietary for a finite period of time, and once a particular version is EOL'ed or otherwise ceases to be commercially viable, open source it and let the public go nuts over it.

    You only need to keep your leading edge keen in the market.

    • It's a little early t be saying it's the end of proprietary software packages, but the OP mentions the word "framework", so it's a little unclear what exactly he is developing. Proprietary frameworks outside of large vendor created software ecosystems(Windows, iOS etc) are definitely on their way out. If devs cannot get access to your framework they aren't going to use it and frameworks with a very small user base tend to fail as nobody wants to devote any time to learning it if they don't think it will b

    • If your proposing to release the previous version as open source every time a new version is release you are not going to get any community members working on it beceause they know any changes they make (and try to submit upstream) will probably be incompatible with the changes you are making on the currently-propietary version. Open Source (with collaboration) ONLY works when all parties are working on the SAME version. Otherwise all you will end up with is a fork every time a new version is released.
      • by shentino (1139071)

        Full open source is always best for the community at large.

        If commercial considerations prevent it though, it's still better than nothing at all.

  • by Anonymous Coward on Sunday April 08, 2012 @06:15PM (#39614467)

    "Everyone is telling me I should make it open source."

    Open source is about allowing more people to look at the source code, for faster/better development. My guess is that most people who're telling you to make it open source have no idea what they're talking about. In fact, even you don't seem to understand the difference between open source and free software, because you write "[...] to become profitable on service alone." Free software is NOT the same as open source software. Free software is about freedom for its own sake, not about faster/better development. Start reading here [gnu.org].

    • by tepples (727027)

      Free software is NOT the same as open source software.

      Yet they use the same licenses. Open Source Initiative's "Open Source Definition" is taken nearly word for word from the "Debian Free Software Guidelines".

      • by unixisc (2429386)

        But Open Source software urges Freedoms 0 and 1, but not Freedom 2, and for good reason. Once you prevent people from preventing their customers from 'sharing their software to help their neighbot', you are automatically violating a central precept of free software. It doesn't violate Open Source software, however, since the main condition - that the source code accompany the binaries so that downstream users can fix any bugs, or modify it to make it more useful - is intact. Freedom 3 too isn't a part of

  • So, WHY? (Score:3, Interesting)

    by CAOgdin (984672) on Sunday April 08, 2012 @06:18PM (#39614485)
    What are you trying to do, make a living or change the world? (You generally can't do both at once; if you get rich from work, you can THEN maybe change the world.)

    Let's start with the basics: What's in it for YOU? Is open source a buzzword, something you think you have to do ethically, just don't have the chops to turn it into a business, it based on other open source code? Is income something you vitally need to continue your work, to live a better life, or are you independently wealthy (I think you've ruled out the latter)?

    I agree with an earlier poster: Make the core code that delivers basic utility to the user open source, if you want to use it as your "loss leader" to show them what's possible. Include all the extra features in the menus or configuration options of your program, so users can see what they're missing (clicking on it opens a window telling them it's in the commercial product, if they'd just buy it).

    But, remember, open source is just a way for other people to leverage your code and make it into a competitive product...some will even violate your license agreement, and modify it to suit their customer base. Do you really want to spawn your own competitors?
  • We use a lot of open source where I work and pay for support.
    I don't think most individuals will pay for it.

  • Go both routes (Score:4, Interesting)

    by Anonymous Coward on Sunday April 08, 2012 @06:33PM (#39614565)

    I'm currently working on a product that will have 3 components. 2 of them will be open source and 1 will be closed source. The web front end and the plugins will be open source (maybe optional) and the engine that does the actual heavy lifting will be closed and pay for only. Obviously, the plugins will be of little use to anyone not using the core product, but the web front will be able to be modified to work with any of the current products on the market. I'm okay with that though, because if it turns out that I have the best web front end then people will use it and it'll give exposer to my core product that it's designed to work with even if someone modifies to work with a competing product.

    I'm still debating on how I want to do the plugins. I'm thinking about using LUA, but then that would force everyone to open source their plugins. I'd ultimately like to see a little ecosystem built around the plugins that allow people to make money off of them if they choose to. So I might go with a native c++ api as well.

    Maybe this is something you could do as well. I've talked with several people in the industry this is targeting and that's how I've came up with this model. They don't really care to modify the core of the product as long as it does what it's spouse to do. They care about being able to modify all of the reporting and what not which is what the front end does. So it appears to be a win win for everyone.

    Posting AC because I moderated the discussion.

    -wmbetts

  • Some possible models (Score:5, Interesting)

    by alexmipego (903944) on Sunday April 08, 2012 @06:40PM (#39614607) Homepage

    It heavily depends on what your product is, but you've at least these possible models:

    1) Fully open source with lack or light documentation. This makes your product essentially free but users pay for support and/or the docs. I can't remember any specific example of a project selling the docs but I'm sure someone will.

    2) Dual License model. A very popular example is ExtJS which is GPL (v3 iirc), however, if you wish to keep some code secret (including server parts) you might need a commercial license. And of course there are support plans available, as well as SVN/GIT access to the latest (devel) version.

    3) Dual License with a Enterprise version. Essentially what MySql does where they offered an open source version but if you wanted fine tunned performance, support for enterprise hardware and support then you need the Enterprise version.

    4) Dual License with long term support. Some projects like Liferay or Red Hat Enterprise use free versions as beta versions - after a while they release a long term supported version for enterprises and backport the important security and bug fixes. Maybe you already know but some companies are very slow to adopt new tech and ever slower to keep up, if they can keep a 4 year old version of the software that does the job well and still get support and bug fixes, you're best pals.

    5) Early access model. Another possibility is to offer early access to new versions. For instance, the Xming project (a X11 server for Windows) offers donators access to new versions much earlier. You can even create a "pool" mode where you release the new version once X dollars are donated.

    Depending on your target audience and the possibility of some of the adjustments required by those suggestions you might find a suitable model or cook some solution with ideas from several.

    From someone in a similar spot, I wish you luck!

    • I believe this has ended, but at one point Pegasus Mail was supported largely by the sale of manuals.
    • by jythie (914043)
      Good summary of options ^_^

      It really comes down to what the product actually is. Dual licensing can work really well, esp when the product is used as a piece of larger code bases then customers who do not want to open up can pay to integrate it into their closed application. Plenty of better options then the earlier suggested intentional crippling.
    • Any ideas on business models that would allow me to open source while guaranteeing I can feed myself?

      There are no business models, either proprietary or open source, that will guarantee that you can feed yourself.

      Also it sounds like you've already written the software and that you're just now trying to think of the business model for it. You've done it all backwards. This is not to say, that I haven't done the same thing myself, but I'm just trying to point out how wrong headed your way (and my way) really are in the real business world.

      Also, you don't mention your competition, or anything about what you

    • Regarding 1) Nobody is going to want to contribute to an open source project if they can't read the docs. Don't expect ANY community patches or help if you go this route!
    • by rtb61 (674572)

      "Any ideas on business models that would allow me to open source while guaranteeing I can feed myself?". I guess the exact same business model for closed source proprietary software that guarantees you can feed yourself, wait, what, there are none.

      Reality here, sorry can not answer your question, you have provided insufficient details. Nothing about what the software does, the market it is targeting, the quality of the software or it's competitors, those details at a minimum are required to even guess at

  • by VoidEngineer (633446) on Sunday April 08, 2012 @06:48PM (#39614627)
    One consideration to think about is that the people who are recommending you release as open source may, in reality, simply be advocating for the ability to make customizations and build on top of the framework you're developing. An open API made actually serve their needs; and may be something they haven't considered, or don't know to ask about. So, open API, proprietary framework is one possibility.

    Second, consider a subscription model to a proprietary database. It's a classic business model, and can be added to most any project relatively easily. Even open source ones. On the support side, the proprietary database may be a) premium support forum, b) bleeding edge features not incorporated into the base build, c) recent bug fixes and security patches not incorporated into the base build. On the feature side, there are countless opportunities, but they'll be dependent upon your framework and what it does. For example, if you have a service that is geolocation aware, your propietary database might be a list of locations of interest.
    • by Mandrel (765308)

      One consideration to think about is that the people who are recommending you release as open source may, in reality, simply be advocating for the ability to make customizations and build on top of the framework you're developing.

      That's the most important benefit users get out of open software: the ability to tinker and to break away. And because it catalyses an ecosystem, the developer also benefits from making it easy for their software and its documentation to be extended.

      If one's willing to break away from a pure FOSS licence, it's possible to retain these freedoms while making it feasible to charge for the software. All you need to do is to adopt a licence that (a), requires users pay a licence fee to run the software in a n

  • by mbkennel (97636) on Sunday April 08, 2012 @06:54PM (#39614643)

    So you've worked for five years on this but haven't yet thought about the business model until now?

    Instead of asking slashdot, how about this radical suggestion: talk to a potential customer.

    As in, find somebody who might actually be a paying customer. You do know who they are, right? If you don't, stop programming right away and figure it out and get at least 5 names of people with their email & telephone.

    You don't necessarily do what they ask (they want the moon, documented and supported and customzied, for 99 cents), but you will find out more useful information to make your decision. Talk human-to-human, on the phone or in person.

    What business model will result in getting revenue now? What are your customers' needs? What constrains their decisions to buy or not?

    A suggestion: open-source common interface code necessary to link your system with a customers' existing software. Integration problems are often a big worry among customers.

  • Feed yourself (Score:5, Insightful)

    by Xtifr (1323) on Sunday April 08, 2012 @06:55PM (#39614649) Homepage

    I can't think of a way of guaranteeing that you can feed yourself whether or not you open-source your code! Making it as an independent software vendor is hard. Above you, you have big companies who like money and won't hesitate to offer similar software, independently developed, if it looks like you've found a good market. Below you, you have FLOSS developers who won't hestitate to offer similar software for free if it looks like your software offers useful features for users. (In some cases, these groups may overlap.)

    That said, you haven't given us anywhere near enough information to answer your question. Are you talking about highly specialized software for a niche market, or general purpose software with a potentially huge market? The edge-effects of open-source development are much more likely to be useful and beneficial to you in the latter case.

    What do you get out of open-sourcing your software? Free publicity is almost certainly the biggest factor. How big is your advertising budget? Also, what about distribution channels? Remember, you're competing with big companies and (if you go the non-free route) open-source developers/companies. How are people going to hear about your software, and find it if they do hear about it, and decide if they like it better than other similar software?

    Making your code proprietary greatly increases your per-user income, but makes it much more difficult (and expensive) to get new users. Open-sourcing your code makes it much easier to get new users, but greatly reduces your per-user income. Independent comic artist Phil Foglio started putting his Girl Genius comic up as a free webcomic, and said that his readership grew tenfold and his sales quadrupled. But that may or may not be typical.

    There's also the possibility of hybrid models, like releasing the core as open source, but charging for add-ons, or, if you think other companies may want to adapt and sell your code, offering a choice between a restrictive free license (e.g. GPL) or a commercial for-pay license. Depending on what your program is and how it works, those may or may not be viable options--you haven't given us enough information to tell.

    Bottom line, though: all the cards are stacked against you no matter which way you go. And, while you've given us very little to go on, it's quite likely that even if you gave us ten times the details you have so far, it still wouldn't be enough information to make more than a wild guess. Going it independent is hard and extremely risky. There's a reason that something like 90% of all programmers are employed developing internal software that never gets licensed or distributed outside of a single company--it's one of the few ways to be sure you eat.

    • by unixisc (2429386)

      Making your code proprietary greatly increases your per-user income, but makes it much more difficult (and expensive) to get new users. Open-sourcing your code makes it much easier to get new users, but greatly reduces your per-user income.

      Depends on how he prices it, doesn't it? If he prices it to be orders of magnitude cheaper than its competitors, but still w/ enough cash to cover his costs, and if in the terms & conditions, he forbids re-distribution of the software - whether original or modified - he can do fine w/ OSS. Note that I didn't say FOSS, since honoring freedoms 2 & 3 is not in his business interests.

      Similarly, his source code needn't be available to the world - all he needs to do is to provide the source code along

      • by Xtifr (1323)

        Um, I don't know what definition of "OSS" you're using, but I'm using the standard definition [opensource.org], and what you describe does not meet that definition. If he "forbids re-distribution" as you suggest, that violates criteria 1, Free Redistribution.

        Yeah, he can distribute source without making his code open source (this used to be quite common in the Unix world), but that's not what he asked about.

        • by unixisc (2429386)

          He may be wanting to make his software publicly examined, which is why opening up the source code is something he's looking forward to. However, he may not be fine w/ his customers distributing it to other people who'd otherwise be his other customers.

          By OSS, I mean that the software is just open source, and that's it. There's no 'Free' there - which is why I deliberately didn't mention 'FOSS'. And yeah, I'm talking about libre, not gratis - I don't think that 'software freedom' itself should be a goal

  • I don't know what you are making, you didn't provide info. How popular do you expect the software to get (be realistic)? If you think it will displace Apache in 2 months, then you should make it open source and freely downloadable. But otherwise if you need to buy groceries and stuff, I think you should sell it with the source included (you can sell service contracts on top of that). Choose a license that gives you, for a limited time, a fair amount of control over their ability to sell copies of your work.

  • You don't give nearly enough detail here for people to be able to help much. Are you talking about an app for mobile devices where it'll cost a few dollars, business software for small/midsize companies, or (potentially) enterprise-level business software?

    For an app, you could make it open source but sell it for a buck or two - most app purchasers will happily just get it through the relevant app store; those who will care about the open source nature will hopefully be willing to throw an (insignificant) co
  • by kikito (971480) on Sunday April 08, 2012 @07:06PM (#39614719) Homepage

    Kickstart it.

    That's what all the cool dudes are doing.

  • Obviously, you can't open source your product and make money off sales of the product; the two are by definition incompatible. The way that open-source based businesses make their money is on services...integration/implementation, support, that kind of thing. But these require a critical mass to exist; if there isn't a good-sized install base, there can be no demand for services. And if you take the route of putting out a great product in open source and then forking/commercializing it (like Tenable did

  • Spend your VC funding wisely... more modest office rentals (Remember: MySQL AB's founder let 70% of his staff - in a subsequent company - work at home, meaning the Co. didn't have to rent as much space. See his practical exceptions to that rule - intended to keep single staff from burning out at home - eg, in his eCorner talk), modest vehicle for yourself (Eg, instead of buying a flash EV, just convert your own car to 100% electric; & install only Tier 1 (slow) charge points at home & work, for it),

  • by pikine (771084) on Sunday April 08, 2012 @07:41PM (#39614911) Journal
    • Don't give more than what you're comfortably giving. Richard Stallman at least had a boiler room to live in, graciously provided by MIT, and there is always free food around MIT campus. He could afford to give away without a lot of material requirement in his lifestyle.
    • End users don't really care which open source license your software is, but businesses do. Businesses can't stand GPL and will ask for BSD-like licenses. An example to consider is that QT was licensed by Trolltech under GPL, so it let them keep the ability to make money from business partners if they wanted to.
    • I'd even go a step further and license your software under Affero GPL which requires software providing public network service that contain your software to give network users the access to source code as well. It's especially far-reaching since you said your software is a framework.
    • If you built an end product around the framework, you can open source the framework but keep the end product proprietary. Think of the difference between Apache Portable Runtime (APR) and the Apache httpd server itself. APR is a framework, but httpd is a product.
    • If you're really concerned about open sourcing as a moral decision, think about what drove Richard Stallman to open source [gnu.org] in the first place. Instead of offering you a concrete suggestion here, you can look at the problem Stallman was facing, compare it with your situation, and see if you can offer another moral solution.
    • Under no circumstances I'd use the controlled obsolescence approach (old version open source, new version proprietary) or try to sabotage the open source version (intentionally withhold documentation, inadequate build system, etc.), as suggested by other Slashdot commenters. They hurt most the people who are the most capable to give back to you.
  • by SecurityGuy (217807) on Sunday April 08, 2012 @08:04PM (#39615009)

    Open source is a solution for certain problems. You're coming at this from entirely the wrong end, trying to find some reason to apply a solution that certain people like without identifying some reason to do so. Don't do that. If you have a reason to open source it, do. If you don't, don't.

    • I'm part of an oss team, the reason is becuase I enjoy it, I'm not looking to make any money off it. Not what the OP was looking for but, here's what I know; given time and patience the money will come. Feed yourself now however you can, be patient, and be persistant. If the project is useful, it will pay off in ways you might not have thought of.
    • In general there seems to be an attitude at Slashdot that open source makes everything somehow "good" or "holy".
  • by lkcl (517947) <lkcl@lkcl.net> on Sunday April 08, 2012 @08:25PM (#39615119) Homepage

    the key here is confidence in yourself.

    the guy who created ruby on rails makes his living by touring the world doing talks, lectures and training on the software that he is the world's leading expert on: ruby on rails. everyone knows that if you want advice on ruby on rails, you go to him, because he is the one that a) wrote it and thus b) has the best working map of the entire software base in the electrical memory (immediate recall) of his brain c) has the ready-to-go speeches and documentation-drone sentences down pat and *also* in the electrical memory of his brain

    (chemical memory is where long-term memories are stored: they're harder to get at. you know the phenomenon. can't quite remember something, but 1 minute later or usually after a good night's sleep "bingo!" - that's chemical memory).

    the main thing to remember about the free software business model is that it is a *gratitude* business model, not a "desperation / control / last resort" model. as in: when comparing free software to proprietary software, you buy proprietary software out of desperation because there *isn't* any alternative free software, knowing full well that you will get screwed, locked-in and your entire data is now hopelessly entangled in the relationship with the vendor of the proprietary software.

    by contrast, you know that, with free software, the person you're entrusting your data to does *not* have you at their mercy. you notice in the posts above - the ones that have been marked as "interesting" and "informative" - they all are variants on keeping the customer entirely at your mercy, so that they *have* no choice but to come to you. that's not really good for you, or for them. apart from anything, it assumes that you _will_ be available for the rest of your life to serve at their pleasure!

    so, contrary to expectations, anyone who uses your [free software] product actually *knows* this, and makes a *deliberate* and conscious decision to contact you and offer you some money for a support contract, knowing full well that you _could_ have gone the proprietary route... and didn't.

    in other words, you get a better class of customer; the relationship is entirely different; you are *not* beholden to each other - each of you can walk away at any time... i could go on, but you see how it's just generally a much healthier way to do business?

    all it takes is that you trust people, and have confidence in yourself. if people like what you've done, and it's actually useful, you stand a chance of making money regardless. if they don't like it, or it's not useful, then... well... they've done you a favour by not having you waste any more of your life on useless software, haven't they? in which case you could go do something more productive :)

  • Look, you indicate you have a fully functional framework system that's prepared to go out the door. People need to purchase this. You have zero need to open source anything here. All that does is give exactly what you've done to the very people who may want to use it. What you definitely need to do is set up a trial or limited features version. Something that everyone and anyone can get their hands on very easily to justify whether it will come close to meeting their needs. Publish a very thorough API

  • Make it Closed, make money while building a base, then Open it later if you think fit.

  • Don't open source (Score:4, Insightful)

    by bhlowe (1803290) on Sunday April 08, 2012 @08:51PM (#39615271)
    Unless there is a compelling reason to Open Source your product (maybe you're looking for your users to modify and expand the product?) I would not definitely not open source it. Why choose a business model that puts "profits to pay the developers" at the bottom of the priority list? The list of profitable small to medium sized open source projects that produce a very good profit is small.

    As a developer, you have a limited number of productive years, before family, lack of time, and brain cells makes you overpriced and uncompetitive. Global outsourcing will make this worse. You owe it to yourself to make a bundle of money now so you'll have something to pay off the house with and retire on. And besides, software becomes obsolete quickly, so if you think you'll make money eventually if its "free" to start, you're kidding yourself.

    Just today I tried 3 "free" programs to do the simple task of merging mp3 audiobook files together.. they all sucked. I then spent $10 on one and it worked like a charm on the first go. The number of profitable companies that don't give away their entire product is vast. If it is worth something, charge for it. Willing buyer, willing seller. There should be a name for this concept.

  • You could say "after we've reached $X, we'll open source it. Those who pay now get exclusive access to each upgrade ahead of it's open-sourcing.
    Once it's open-sourced, you live out of donations/support/SaS.

    Paying support+warranty is important for some (corporate) clients though.

  • Again with the frameworks... The only thing I kinda like with the Apple Store is that it gives a focus on applications so developers have an incentive to build something that does something.

    Unfortunately lots and lots of startups and open source projects are still spending cycles on yet another framework instead of creating actual value. This is not a problem that is specific to startups however - even in-house IT developers tend to spend time on frameworks and libraries if management or architects are not

  • Most people (FOSS fans included) don't give a shit wether a piece of software is FOSS or not. They just want to be able to get it fast and not get in their way when I try to buy or use it.
    If you have a piece of software that I can use and that solves a problem, I'll, and most other people, will shell out money. However, if your checkout gets pissy with me just because I live in a different country or continent, or if you add pointless obsticles (for instance obfuscating script code like some PHP web system

    • by Mattness (636060)
      A scenario in which customers might care about the source code could be one in which your software handles customer AND client data and the client (the one using your software) needs to in some way advertise the security and fitness of the software to safely handle their customer data. Advertising that it is publicly available and allowing new clients to hire anyone they like to review it might be advantageous. It allows clients to provide customers with an assurance that though they outsource the service t
  • While I daresay a large proportion of /. will love with the idea of going open source, I would approach it from a different angle altogether.

    My angle would be to - at least initially - forget about OSS. Instead, consider "What's my business model? How will I turn this project into something that makes me money? Who's going to buy it and why will they buy this over either buying something else or using a free equivalent?"

    The reason I say this is if you're just starting to go it alone, you've got an enormous

  • You're going to need to adjust your business model a lot over the next few years until you iron out all the wrinkles (or even drastically change it). No business model survives contact with the market unchanged. Even if you're copying another software business's model, your product will be different which will affect your implementation of that model.
    Open-sourcing your code cuts down the available choices for your business model, maybe not by much, maybe by a lot, depending on your market.

    Even if your custo

  • You say "everyone is telling you to make it open source". Well, I don't, so it's not everyone. But why are they telling you this? One advantage of open source is that these people can build on your work without paying you. Wait - that is an advantage for everyone except you!

    Just ask yourself: What is in it for me? Assuming that you have a husband or wife and two children and want a nice home and decent food on the table for everyone, and a good education for your children, what's the best way to achieve
  • Look at folks who have done it recently. http://developmentseed.org/ [developmentseed.org]

    The tl;dr seems to be build software that supports much desired "custom" solutions, open source said software while being the people everyone hires to build said custom solutions.

  • The worst thing you can do is rush the decision and the implementation of your business model.

    In my case, the core of my software (MSS Code Factory [sourceforge.net]) was always intended to be open source. However, the intent was not to launch the company/business branch of the project (Singularity One Systems, Inc. [singularityone.ca]) until I had at least a couple of the proprietary support modules in place for commercial databases.

    Timing would not turn out to be in my favour, however, as I was laid off last year, so I rushed getting "t

  • "My projects are no longer small-scale hobbies, they are large frameworks, and I need to make a living."

    Well, then do it the way any other else's.

    Research your market so you know what's sellable and what is not, to whom and why.

    Then target your product to the lowest hanging fruit and focus your advertisement campaign to it (I mean it! You might think at the beginning that your product is targetted to other developers just to find that it is in fact targetted to their managers which are the ones that sign t

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