Converting an Open Source Project into a Business? 38
Yaztromo asks: "I'm about to try to make the jump and move my jSyncManager Project from being a time-consuming hobby into a full-time business. I'm hoping to follow the model of other successful Open Source businesses by selling integration, development services and support contracts. Has anyone in the Slashdot community attempted to move their Free/Open Source projects from hobby to business? What were the special challenges or obstacles faced?"
Re:biggest problem.. (Score:3, Interesting)
Tax forms from the IRS are free. But many people pay someone (who knows what they're doing) to fill them out for them.
Re:biggest problem.. (Score:2)
But; for any moderatly sized OSS project there is a quantity of people who are are all to happy to help (provide support) to you for free through mailing lists, bulletin boards, IRC etc...
Support contracts work best (IMHO) targetted at corporate entities who have a hard enough time convincing themselves to use OSS, let alone accept help from the 'unwashed masses' of the community. Coporates like to pay
Re:biggest problem.. (Score:3, Insightful)
MOST of them could actually spend 30mins and do them themselves with no prior experience and only the information that accompanies the form.
Re:biggest problem.. (Score:3, Informative)
Nope.
Unless you're making plenty enough money to either do or have your taxes done, these guys will prepare your tax return for free. [aarp.org]
And if you're low-income and have problems with English, these guys will do your taxes for free. [govbenefits.gov]
Heck, go to your closest walk-in IRS office during tax season and an IRS employee will do your taxes for you, for free. Of course, if you've no real need for help (either because you
Re:biggest problem.. (Score:1)
I have an idea! Let's go up to everybody who wants to take our money, and ask them how much we should pay them! Bloody brilliant!
I agree doing the 1040EZ or 1040A is pretty darn easy; why people get so intimidated by them is beyond me. Maybe it's the crappy arithmetic education in our public schools. But you'd be a fool to go to the IRS and ask them how much you owe them... Let's no
Re:biggest problem.. (Score:2)
You jest, I know, but just in case anyone thinks this is a serious point I should point out that the people who prepare your returns at the IRS don't care one whit how much you owe. They won't dig for deductions but they won't throw any away, either, assuming you've got your paperwork in order and they can identify said deductions without spending hours digging. The preparing folks are
Re:biggest problem.. (Score:1)
That's a half-truth.
Would you be saying the same if a privately-owned tax firm were doing the tax prep? I doubt it. Private firms have an interest in doing 2 things:
1) finding as many loopholes as are available to you
2) charging you for the time it takes to find those loopholes, to the extent that it doesn't cost you so muc
Re:biggest problem.. (Score:2)
No, I wouldn't say the same thing about private preparers. They're in it for profit. The folks at the IRS are in it for a paycheck and, organizationally, to serve the public.
Re:biggest problem.. (Score:2)
That support isn't good enough for most businesses. If you ran a corporate website on open source software and had a problem, you probably couldn't post it on a mailing list and hope for a response. Businesses buy support contracts for priority. That's why they'll pay IBM to support a server, with a 4 hour response time,
Re:biggest problem.. (Score:2)
The jSyncManager core software may be free (as in both beer and speech), but it's really just an enabler technology. Sure it has the necessary protocol stack and such for performing data synchronizations, but the real value is in being able to connect it to your applications, databases, networks, and overall dataflow.
That part isn't free. Current users typically have to develop such plug-in connectors (we call them "jConduits") themselves.
My idea is to
Special challenges. (Score:5, Insightful)
Finding customers. NEVER underestimate how important this is to the success of your company.
All other problems, and yes there are many with relation to OSS in general, are insignificant.
So many startup guys get rolling, only to be void of life 4 months later because they weren't daily working on getting clients on board who will pay the bills and provide lifeblood to the rest of the company.
Sounds obvious, but I just wanna point it out before it gets lost in the
Worth Repeating (Re:Special challenges. (Score:4, Insightful)
Can't be said enough. How many times did we all hear about a dotcom that was gonna do just fine because they had exactly *1* customer who was playing sugar daddy (trans: had a piece of the action) and they swore up and down that they were gonna sign a second customer any day now?
Technical knowledge alone won't get you half what you need. Team with a sales person. Just like there are born geeks in the world, there are born salesman. The sort of guys that see free stuff and just instinctively think "I can sell that 12 different ways, I can sell the service I can sell the support I can license the trademark I can merchandise the logo...." You should be able to at least get out of the starting gate with a good salesman on your team.
Then you'll need somebody with business savvy to start making it look and act like a real company and not just a guy with an idea and a guy selling that idea.
Good luck!
Re:Special challenges. (Score:3, Insightful)
Funny how often that does get lost in these discussions, even though it seems obvious. Finding customers is now your number one priority. In the beginning, especially, all that time you're saving by not having a day job anymore will go to getting clients (and a bit of other business minutae). Coding the project will still be something you do
OpenSource to Business (Score:4, Interesting)
Re:OpenSource to Business (Score:2, Informative)
I am going to do that too (Score:5, Interesting)
So in a nutshell, good luck. But if you start generating any money on your project, a fellow developer can download the source and make it a policy to undercut your support pricing by 20%. Many customers will stay with you because of additional benefits provided (they like the service better, they like you personally, etc.), but some might switch, too.
Re:I am going to do that too (Score:2)
It's called barrier to entry. If the barrier to entry into the market in relation to the reward is low (ie, grabbing your source, and peddling their services with it) then you will one day find yourself staring at competitors with the same product.
Re:I am going to do that too (Score:3, Informative)
If your open source support business (that relies on the product you wrote and GPLed) generates $30,000 a year, that's hardly enough for someone to get excited. (Oh, we could get a 33% market share by undercutting prices and then earn $10,000 this year!)
Things start to happen when the revenue number hits six digits. Then it's time for some bright college student to download the source, study the app and then buy a newspaper ad
market friction (Score:4, Informative)
Re:market friction (Score:1)
Some friction remains in the market (ac
Re:I am going to do that too (Score:2)
Also, as the principle developer or author of the software, you have a certain "ownership" that no one else can have unless you abandon it. You can claim, "They don't know it half as well as I do. I wrote it. I've seen X iterations of it. I know what works and what doesn't. They are just now getting familiar with it." You have instant cred
Re:I am going to do that too (Score:2)
It's the issue of time. Right, you cannot pull a guy off the street and expect him to know the internals of a Java PDA sync utility, but if you're serious on starting, you'd do your research and prepare yourself, since this is your core business. Also, it's likely that you won't have to have complete familiarity with the code down to the for loops and if statement
Re:I am going to do that too (Score:2)
Re:I am going to do that too (Score:1)
Business friendly open source licensing (Score:1)
The Zesiger License [zesiger.com] is a license that addresses this. It allows an open source project to be commercialized for 2 years before being required to release the source openly. This provides a healthy lead over competitors that simply want to tweak and repackage someone else's commercial products, without doing any R&D, or other risky investment of their own.
During that two years, a business could package their source for their clients under another license, such as the GPL, which will prevent the code fro
Comment removed (Score:4, Insightful)
Re:You're facing an uphill battle. (Score:1)
The GPL's popularity is what causes this chasm between commercial vendors and Open Source. In a way, the GPL's belligerent and iron-fisted stance on Open Source has encouraged closed source by drawing an uncrossable line between that which is GPL and that which is not. The OpenBSD project's goals [openbsd.org] appear to be a rare negative reaction to the GPL. They aim to keep their project open source, but without any of the GPL's heavy-handedness.
If people started converting their Commercial/GPL projects to a license
"Finding customers" (Score:2)
I don't know this guy's product in detail, but I quickly looked at the website, and it seems that he shouldn't be aiming for street-customers - I think he should be pitching to hardware vendors who want to bundle the software in with their hardware, but don't want to develop/manage it in house.
Specifically for this product (Score:2)
Re:Specifically for this product (Score:2)
This is something I've tentatively looked into. It is certainly going to require further investigation.
Currently our primary users are corporate environments that neeed synchronization services and support on non-Windows platforms. PalmSource does a fin
Re:Specifically for this product (Score:3, Interesting)
1. Get on their Shareware Catalog. Almost all third party vendors (I doubt you could do this with Palm, Inc. but Handspring and Sony spring to mind, and I'm sure there are others) want to differentiate their product by having mor
Re: (Score:3, Informative)
Study how to run a business (Score:2)
Take a class on how to run a small business.
Start part-time, and hire people to help you as you grow (refer to the book a lot).
Provide exceptional service.
Good luck!