Ask Slashdot: Viable Open Source Models For Early Startups? 203
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?"
Re:If you think open source is not the way to go.. (Score:5, Insightful)
If you think open source is not the way to go, then why bother asking slashdot? Seriously? You won't get the answers you're looking for here.
Yes he will.
The way I read it, ethically he thinks open source might be the right thing. Practically, it might not be a reality. He's fishing for examples of unconventional open-source money generating techniques.
Re:This is how our start-up handles it (Score:3, Insightful)
Not sure whether I'd classify this as interesting, funny or appalling.
Re:This is how our start-up handles it (Score:4, Insightful)
Furthermore bugs in general reduce my opinion of a product and the company around them, if I see such a shoddy open source product, what's the guarantee a commercial product we'll be any better?
(after writing all this I now sit and ponder if I were trolled...)
Re:This is how our start-up handles it (Score:0, Insightful)
On top of that we introduced various bugs and weird failures to the open source version, which would mean that the open source users would call our premium priced support telephone number. We needed to fine tune this over the year a bit , as we didn't introduce enough bugs in the beginning. But later we would start getting lots of support calls for bugs and it made a good amount of money.
I hope your customers see this, "Expert" Coder, and sue the ever-loving pants off your shit-tank masquerading as a company. Fixing bugs more slowly in the free version is one thing, but DELIBERATELY introducing bugs that you'll get support revenue for is utterly despicable.
A different suggestion: ask a customer (Score:4, Insightful)
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)
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.
Re:If you think open source is not the way to go.. (Score:3, Insightful)
I would suggest that as you add more and more advanced features to the pay-for version, that you include some of the older features inside of the open-source version
You could also ask for donations for the open-source download through paypal(remember you can't make them pay for it if it is just open-source source code)
My parent: Acapulco, has a similar idea but he just wants the older version to be open-sourced where my idea gives you a little more control over what stays closed-sourced and what is open-sourced. Maybe you do want them to pay for a very hard to program feature or something that took you a long time to R&D, which I can understand.
Just remember if you alienate your open-source community they will leave you and you might as well have not spent the time on making some/part/all of it open source to begin with
Re:If you think open source is not the way to go.. (Score:5, Insightful)
Ethically you want to do what is closest to your heart if you will, but unfortunately you need to eat, and usually this involves doing the opposite of ethical (or at least far from what the ideal-ethics tell you)
You know, this sounds weird to me. Can an ideal that forces you to die of hunger be called "ethical" in any kind of reasonable real world moral system? That means nobody (at least nobody alive) can ever be "ethical" (or honest, or moral, or whatever you want to call it). That makes the particular ideal deeply flawed, and the moral system it belongs to is at least extremely questionable, if not completely senseless.
Now, I recognize the fact that people have and sometimes still do die for ideals - but the death is almost always caused by external factors opposed to whatever ideal they fight for, not by the ideal itself - the only exceptions I can think of are some bizarre suicide cults.
confidence, trust, gratitude and expertise (Score:5, Insightful)
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 :)
Re:If you think open source is not the way to go.. (Score:5, Insightful)
I believe parent has nailed it.
Ethically you want to do what is closest to your heart if you will, but unfortunately you need to eat, and usually this involves doing the opposite of ethical (or at least far from what the ideal-ethics tell you)
So I propose this. How about you release version 1.0 and 1.5 for example (or 1.0 and 2.0 or something) as regular closed-source software, and then when the next version comes out, you release the previous one as open source (e.g. release 1.0 and 2.0 for pay, when you release 3.0 for licensing you release at the same time v1.0 as open source)
this is what trolltech, mysql and other companies did. it never goes down well. it's _extremely_ unpopular, and absolutely guarantees that there will be no community *other* that paid-up staff members involved in the actual development of the software.
the reason is very simple: any person wishing to help make improvements to the software knows full well that they might as well not bother, because the free software version that they're using is hopelessly out-of-date.
in the case of QT, what actually happened was that the version 3 of QT (QT3) actually developed into an independent fork. the trinity desktop team now have taken full responsibility for its maintenance. bit of a digression here, but that version is years old, _but_ it has the advantage that it's much much smaller (faster, less code) than QT4 or QT5. QT4 is severe bloat-ware that performs extremely badly on ARM9 and ARM11 platforms.
anyway the point is: the "model" you propose only really works if you're a large corporation with lots of resources and lots of money and are willing to piss people off and make even the free software community absolutely desperate and beholden to you. that works for things like mysql and qt but dude, your software had better be _really_ shit hot to make these non-community-inclusive options work.
Re:If you think open source is not the way to go.. (Score:3, Insightful)
Can an ideal that forces you to die of hunger be called "ethical" in any kind of reasonable real world moral system?
Yes, some people are willing to die for their beliefs.
I can tell you right now, I would be willing to die to defend democracy, if it ever came to that extreme, and a lot of people would die to defend their families.
No one will ever die for money, but they will die for many other things. Thus ideals are more powerful than money.
Don't open source (Score:4, Insightful)
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.
Re:If you think open source is not the way to go.. (Score:2, Insightful)
Your examples are not what's he's talking about.
Are you saying that if in a proper democratic election it was voted to have you killed, say everyone decided that your race just should go away, you'd be fine with it?
Would you fight to defend a system that is trying to kill you? And would you still consider the system ethical when when it's doing that?
Re:If you think open source is not the way to go.. (Score:2, Insightful)
Are you saying that if in a proper democratic election it was voted to have you killed, say everyone decided that your race just should go away, you'd be fine with it?
Of course I wouldn't be fine with it, are you insane?
The problem in that situation isn't democracy, it's the people you're living with. "Democracy doesn't guarantee good government, it guarantees the government the people deserve."
Re:This is how our start-up handles it (Score:4, Insightful)
I'd have to disagree on the ethics. When you are deciding between introducing bugs and feeding your family, feeding your family is the ethical choice. Better if you can avoid it, but ethical if you have to.
Re:I vote troll. (Score:5, Insightful)
He could be an Anonymous Coward and still have an interesting question. And I'd like to offer him a reply.
Open source is massively misunderstood by just about everyone who doesn't read slashdot. Corporate executives' knee-jerk reaction to open source is that it's a Communist plot designed to destroy Capitalism. Free Software advocates (open source is a dirty phrase) will state that your company must embrace the give-it-away-for-free philosophy or your soul will be damned (that line of reasoning works with chicks, too).
In reality, if you have software which cannot make you money directly, it's a very good candidate for making open-source, assuming that someone out there will bother to use your code. Most closed-source commercial code does not pass this test. Usually, they could mail DVD's with their proprietary source to every competitor and not one of them would bother reading any of it. If you think open source code is ugly, just wait until you see the closed-source crap powering our big businesses.
So, in the unlikely case that anyone would care to read the code your company is considering making open source, the next question is "could you sell it?" If that code has any value to anyone, chances are that the copyright holder will go for the bucks rather than make it open-source. In most cases like this, I would guess that the source is closed to worthless. It's the coders that count, not their current code base.
Assuming there are people out there who want to use your soure code, either to compete with you or because it's valuable in their business, and somehow you could charge for that source, well then no... keep it closed source, because your boss will get seriously pissed otherwise. In the end, regardless of the actual issues at hand, your boss will cover his behind and force you to keep it closed source just so he can point out his enormous value to the company, where without him, dangerous socialists like you would give away the Company Jewels. You freaking Obamacare lover... Thank God for your boss!
Re:That's a bizarre notion of ethics... (Score:4, Insightful)
I'll probably get modded down, but it is clear you don't have a clue what money is. There are 3 levels of money:
- the exchange of physical things aka barter,
- the exchange of a common unit (physical or digital / virtual) for experience, wisdom, and time
- the exchange of energy
You're an idiot if you think you need money to survive. (Don't get me wrong - money, currently, is _very_ convenient, but it is sufficient, not a necessary condition.) Proof: Animals have been in this planet for _millions_ of years - they dont have nor need an economic system - only stupid greedy humans who have falsely bought in the belief system that there is never enough are insane to insist on idiotic barter systems. In 100 years you will find the concept of money will be an archaic, barbaric system by people who didn't know any better. And to drive the point home - how much did you pay the Sun and Earth today that supports your very existence? We -already- have free energy but you are too busy being brain washed by a capitalistic system to understands it's strengths AND weakness to realize how the existing system will be replaced - free energy is only the catalyst for this paradigm shift.
ALL civilizations are built upon the concept of sharing. Truly advanced civilizations (not the joke called "Western") take this to the extreme -- some of the native Indians perfectly understood the nonsense of ownership - they were stewards of the planet AND of each other.
The primitive human race still tries to grok why one has to pay to live on the planet that one was born on but this ignorance won't last much longer even though you can keep on trying. You are already
seeing the start if this paradigI'll probably get modded down, but it is clear you don't have a clue what money is. There are 3 levels of money:
- the exchange of physical things aka barter,
- the exchange of a common unit (physical or digital / virtual) for experience, wisdom, and time
- the exchange of energy
You're an idiot if you think you need money to survive. (Don't get me wrong - money, currently, is _very_ convenient, but it is sufficient, not a necessary condition.) Proof: Animals have been in this planet for _millions_ of years - they dont have nor need an economic system - only stupid greedy humans who have falsely bought in the belief system that there is never enough are insane to insist on idiotic barter systems. In 100 years you will find the concept of money will be an archaic, barbaric system by people who didn't know any better. And to drive the point home - how much did you pay the Sun and Earth today that supports your very existence? We -already- have free energy but you are too busy being brain washed by a capitalistic system to understands it's strengths AND weakness to realize how the existing system will be replaced - free energy is only the catalyst for this paradigm shift.
ALL civilizations are built upon the concept of sharing. Truly advanced civilizations (not the joke called "Western") take this to the extreme -- some of the native Indians perfectly understood the nonsense of ownership - they were stewards of the planet AND of each other.
The primitive human race is still trying to grok why one has to pay to live on the planet that one was born on but this ignorance won't last much longer even though you can keep on trying. You are already seeing the start if this paradigm shift with the total breakdown of copyright WRT music and software.
Re:If you think open source is not the way to go.. (Score:5, Insightful)
Basically, the only reply to OSS business models is "support your product". If the product is so easy/good that no support is required, then you might as well have no product at all.
Please can we stop repeating this fallacy? That is not what support means. When people talk about paying for support in open source does not mean paying for someone to answer the phone and tell you how to use it. It does not even mean paying for training (although that can be a good business model too). It means paying to turn a product (software) into a solution (something that directly addresses a real need).
Very few off-the-shelf software packages do exactly what the user needs without any customisation. Even something like MS Office generates a huge amount of business for people writing business-specific templates, macros, wizards and so on. In a big company, you'll have customised interfaces for generating all of the standard forms of document that the company requires. Someone had to write all of these, and that person got paid. They would have been paid just as much if the company had been using OpenOffice instead of Microsoft Office. By the way, this is one of the reasons why MS Office doesn't do as badly as you'd expect in TCO calculations: for a big company the cost of customisation is a significant part of the total cost.
The more esoteric the software is, the more that it's going to need time (and therefore money) spent integrating it into a business. This is how companies like IBM make most of their money. It doesn't matter to their business model if the software is proprietary or open: if it's open then it means that they get lots of reusable building blocks for free, but the final solution is so tailored to their customer that they won't be selling it more than once anyway. Look at SAP: their software is proprietary, but it doesn't have to be because their entire business model involves charging a lot of money to customise it. They could give away a stock install for free and still charge a lot for the customisation.