I wouldn't invest in open-source companies, even though I ran one • Hacker News Board

Re: I wouldn't invest in open-source companies, even though I ran one

#71

Post by hobofan » Sun, Jan 24, 2021, 9:46 PM UTC

ignoramous wrote: post #52

If engineers are the most important resource, I think being a company known for open source might act as an inbound sales for attracting top talent, too (see: Google, RedHat, Mozilla). For engineers, it makes sense to work for companies that do have FOSS projects because they can always point to their corpus of work when switching between jobs as proof of their worth. Most engineers who realise this don't ever want t…

Yes, open source gives you developer mindshare, and cheaper hiring, but both of those mean squat if you can't monetize well (and most open source companies I've seen don't).

Re: I wouldn't invest in open-source companies, even though I ran one

#72

Post by pchap10k » Sun, Jan 24, 2021, 9:48 PM UTC

flaburgan wrote: post #63

Wow. It looks like this man has no idea what the free software spirit is. I mean, he definitely hasn't, as he's talking about "exit value“. Still, he's writing that with HTML, using SSL and TCP, on a PHP website probably running on Nginx or Apache on a Linux server with a postgresql database... Opensource is what allows him to talk to people or even create his business he is so proud of that he gives advices to every…

Do engineers working full time in a FOSS core team need someone to pay their salaries? Nothing the author said was against FOSS on a volunteer basis. What he said was it’s a challenging business model, unless you can reach escape velocity, and the window for that success is much narrower than simply selling a commercial product from day one.

There are real differences between FOSS that provides foundational capability (network layer, drivers, OS) and application layer projects. Firstly, they largely were built at a different time, secondly they were pure FOSS and not backed by a founding company that relied on it to keep core development going (Redhat’s business backed into Linux, so they benefitted from an existing core).

TLDR a founder who struggled to establish a business based on FOSS is saying don’t do it as a business because it’s harder than you think and can feel like a thankless endeavor.

Re: I wouldn't invest in open-source companies, even though I ran one

#73

Post by joshuaengler » Sun, Jan 24, 2021, 9:51 PM UTC

jedberg wrote: post #61

Same. I've very wary of investing or getting involved with any company that has an open source strategy. I worked for one (Sendmail) and it did not go well. We talked about how it's hard to compete when your number one competitor is your own software for $0. If you look at successful public companies with open source, they are all fairly small successes compared to their public closed source peers. When I worked at r…

Same here. I run a small game company in San Francisco, and we constantly are donating to help fund projects like Blender and Godot because they're amazing projects that deserve funding to keep them afloat.

But would I invest in an open source company? Eh, that's a different story. I love them for what they are, it's amazing they exist, but I don't see them as an investment that pays you back dividends. Rather, I see them as a useful tool you can make money with and is worthy of your donations.

Re: I wouldn't invest in open-source companies, even though I ran one

#74

Post by IncRnd » Sun, Jan 24, 2021, 9:52 PM UTC

rhn_mk1 wrote: post #39

> If you are running a commercial business on top of your open-source solution, it is paramount that you own the product's full IP. Why is it "paramount"? While I have seen that behaviour, there are also several commercial businesses in my corner of the 'net based on open source solutions that don't make an effort to own the full IP and they are doing OK. I think there's some unstated assumption here, anyone care to…

What is paramount is that risk needs to be reduced, mitigated, transferred, avoided, or even sometimes accepted. Risk must be managed. That is why some companies want to own the OS project, and others want to pay as employees the prime contributors.

Re: I wouldn't invest in open-source companies, even though I ran one

#75

Post by gregwebs » Sun, Jan 24, 2021, 9:54 PM UTC

The main business proposition of open source is that you can create a larger market. This is hinted at in the article by saying "easy distribution", but it isn't really discussed.

The goal of open source is to create a market for the product that is 10x or 100x bigger than a proprietary product would have. You won't ever capture 100% of the market. But if you capture a fraction of that larger market you still come out far ahead of the proprietary product in which you capture close to 100% of the market.

Probably there are some products for which the market is finite or open source won't make it bigger, and for those the scarcity based viewpoint of this article makes sense.

It is also worth noting that Red Hat has shown that open source doesn't require distributing your product for free. Another note is that many companies today take an open core approach to try to gain some of the advantages of open source without all of the downsides.

Re: I wouldn't invest in open-source companies, even though I ran one

#76

Post by [deleted] » Sun, Jan 24, 2021, 9:55 PM UTC

madmax96 wrote: post #66

ignoramous wrote: post #52

If engineers are the most important resource, I think being a company known for open source might act as an inbound sales for attracting top talent, too (see: Google, RedHat, Mozilla). For engineers, it makes sense to work for companies that do have FOSS projects because they can always point to their corpus of work when switching between jobs as proof of their worth. Most engineers who realise this don't ever want t…

Microsoft acquired GitHub for $7.5 billion. How much is GitLab worth? How much money has Microsoft made selling Windows vs Linus off Linux? How much money does Apple make off iThings?

[deleted]

Re: I wouldn't invest in open-source companies, even though I ran one

#77

Post by nemothekid » Sun, Jan 24, 2021, 9:55 PM UTC

enriquto wrote: post #41

xyzzy_plugh wrote: post #16

Earlier quoted context omitted.

This is a naive view. Most companies try to limit or restrict the scope of what they must open source. With the GPL, depending on the version, how the code interacts with your project (static linking, dynamic linking, IPC, etc.) you may or may not have to release your code under the same license. In particular Google's strong anti-AGPL stance has caused a chilling effect for adoption of AGPL projects at companies, he…

> Lawyers don't like GPLv3 and they don't like AGPL. Whose lawyers? Why would the lawyers at your company object that your choice of license for the free software that you publish is the AGPL or the GPL?

This is a post about running an open source company. In other words, you have to worry about your prospective customer's lawyers objecting to your product just because it is in part AGPL. You could just upsell with a different license; but from a business model perspective that makes the distribution channel of open source irrelevant.

Re: I wouldn't invest in open-source companies, even though I ran one

#78

Post by habitue » Sun, Jan 24, 2021, 9:56 PM UTC

I think "Commoditize your complement" comes into play here. Yeah, if your core offering is free, you're going to be fighting to make money. But you can get huge value if you open source otherwise proprietary parts of your stack.

Re: I wouldn't invest in open-source companies, even though I ran one

#79

Post by mooreds » Sun, Jan 24, 2021, 9:56 PM UTC

lifeisstillgood wrote: post #62

The essential problem is gatekeeping . Any commercial business uses money as a means of getkeeping what it uses (buys). This works well to reduce and so control the purchases of chairs, desks, external consultancies and proprietary software. We all know the horrors and pain of trying to raise a PO to get a license for a really useful / necessary piece of software. I fundamentally guarantee that if React needed a 0.01…

>FOSS short circuits this gatekeeping function

There are other ways past gatekeeping:

* free trials

* money back guarantees

* free as in beer solutions

Open source goes one step further than those and says "you don't just get to use this, you get to own it" where "own" means change as you like.

Re: I wouldn't invest in open-source companies, even though I ran one

#80

Post by alfonsodev » Sun, Jan 24, 2021, 9:57 PM UTC

madmax96 wrote: post #66

ignoramous wrote: post #52

If engineers are the most important resource, I think being a company known for open source might act as an inbound sales for attracting top talent, too (see: Google, RedHat, Mozilla). For engineers, it makes sense to work for companies that do have FOSS projects because they can always point to their corpus of work when switching between jobs as proof of their worth. Most engineers who realise this don't ever want t…

Microsoft acquired GitHub for $7.5 billion. How much is GitLab worth? How much money has Microsoft made selling Windows vs Linus off Linux? How much money does Apple make off iThings?

$6B, It’s not so far behind[1] and that before exiting, and I don’t know how much founders retain vs GitHub founders. But what if would be less, not everything has to be about market valuations.

[1]https://techcrunch.com/2021/01/15/gitlab-oversaw-a-195-milli...