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

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

#151

Post by jabl »

jrochkind1 wrote: post #88
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…

> "if it's involved in infrastructure, open source it, if it's related to movies, keep it closed." In the first wave(s) of open source, I think most contributors were working on company time, but the open source was not the primary product of the company. It was something useful to the business of the company, without being the business of the company. So what you describe seems to fit into that model. That model see…

I don't think that model has gone away. That's largely the basis for how all those large companies (FAANG's included) contribute to open source, and some smaller companies as well. The model is IMHO fairly well explained by "sharing the maintenance burden of commodified infrastructure" in some cases, and in other cases by "commodify your complement".

Open sourcing the core value proposition of your company? Yeah, that's where all those OSS startups are struggling, and then get a lot of flak for shifting to proprietary licensing (e.g. Mongo, Elastic).

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

#152

Post by jabl »

tptacek wrote: post #5

This is unusually insightful for a LinkedIn post. One question, though: towards the end, it suggests that GPL/AGPL products, which are more defensible against commercial competitors who simply resell the open source project, are "legally murky" and might be rejected by customer legal teams. But does that matter? Can't you just do what Sleepycat did, and offer commercial customers a clean commercial license?

Dual licensing requires copyright assignment, largely preventing a community of contributors forming around the software (nobody wants to provide free labor to somebody else's get rich quick scheme), which is one of the big advantages of OSS in the first place.

In a way, dual licensing is essentially proprietary software, with a for free version that you hope will satisfy as few users as possible. A bit like the old shareware days.

Dual licensing also creates the perverse incentive of trying to scare your potential customers how horrible copyleft licensing is. So if you motivation is to increase the amount of FOSS through copyleft licensing, you're shooting yourself in the foot.

See https://sfconservancy.org/blog/2020/jan/06/copyleft-equality...

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

#154

Post by yarcob »

DaiPlusPlus wrote: post #133
yarcob wrote: post #67

Earlier quoted context omitted.

I agree, the Linux kernel is one of the examples where the GPL really works, because a lot of companies really need it for their products, and they need to distribute it, and there are very few alternatives.

> there are very few alternatives QNX, WxWorks, Windows Embedded, Windows CE (RIP), NetBSD, FreeBSD, OpenBSD, Solaris, OS/2 Warp, Plan 9, Inferno, RiscOS, ReactOS... It's a shame what happened to BeOS - I wonder what would have happened if BeOS was open-sourced when the expected Apple buyout fizzled and the company went-under instead of it simply disappearing - that would have put a huge damper on, say, Ubuntu and ot…

I doubt that any of these (except maybe one of the BSDs) would be a viable alternative in most cases where companies use the Linux kernel.

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

#155

Post by hnarn »

The fundamental difference between buying or not buying OSS products is that if you’re buying OSS, at least there’s a potential your product will be fixed and live on through the community if your original vendor disappears. The only thing the vendor can really deny you is the service. In the case of closed source, you can not only be denied the service offered, you also end up with a useless, unpatchable black box if the vendor disappears. In my mind, this makes OSS more resilient, in more ways than one.

This doesn’t contradict the point made: of course from an investors point of view I’m sure closed source is often more profitable. But from a consumer perspective, I doubt the same benefits are true.

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

#156

Post by dgudkov »

nradov wrote: post #137
dgudkov wrote: post #134

Earlier quoted context omitted.

What viable SaaS strategy can you have if Amazon can come at any moment and do the same?

Amazon only offers horizontal platform services. There's still huge opportunity in the verticals.

Can't think of any vertical FOSS. Can you?

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

#157

Post by ignoramous »

linkdd wrote: post #128
InvOfSmallC wrote: post #110

Earlier quoted context omitted.

I personally have been being using Intellij for everything for the last five years. I tried to migrate to VSCode for golang. I mean, don't get me wrong, the situation is not the worst possible, but the only reason you would want to use that is because you never tried refactoring with Goland. Are you kidding me? I had to go look for what is the current needed extensions for go that are still maintained, configure them…

The best IDE is in my head. I don't need to type anything and it can even run buggy code without any error.

> I don't need to type anything and it can even run buggy code without any error.

Sounds a lot like the free IDE I use for HTML and JavaScript... Firefox.

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

#158

Post by LukeEF »

Interesting post - I'm coming from a COSS database perspective (TerminusDB), so talking my book. The point of COSS imho is to create broad value and monetize a percentage of that value. A few points:

1. In database land, there is no other available venture scale business model. If you look at the top 10 databases on DB-Engines (https://db-engines.com/en/ranking), the most recent proprietary db is SQL Server which launched in 1989. Yes, databases are sticky (we see you Oracle), but unless you believe there are no further investable plays in databases, then open source is the only way to invest. (Snowflake is an exception to the rule, but in this case, it is just that).

2. Useful recognition that offering hosted versions of the product is a viable business model that can deliver SaaS type margins. Mongo's Atlas is the obvious leader here - a huge and fast-growing revenue stream. I would also mention the companies that have built successful SaaS/marketplace offering on OSS. Informative list of all the COSS companies above 100m in revenue: https://docs.google.com/spreadsheets/d/17nKMpi_Dh5slCqzLSFBo...

3. I find this conclusion difficult to swallow: 'The ratio of failed OS businesses to successful ones is worse than in prop-tech; revenue kicks in much later'. I can't find any evidence for the first point - it needs substantiation. For revenue, lots of the most successful venture backed businesses (facebook) have revenue kicking in later so they can maximise growth potential – that’s seems ideal for venture!

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

#159

Post by LukeEF »

jandrewrogers wrote: post #135
hapless wrote: post #90

The author makes a good case against open source businesses, but he indulges himself in a false dichotomy between a traditional proprietary model and open source. Increasingly often, there is no market for your proprietary software. It is then not a choice between open source and proprietary models, but rather between doing open source or doing nothing. A lot of markets are just gone , and they're not coming back. Od…

The market for new proprietary databases is both large and lucrative -- it is printing money right now. What has changed is the structure of the market and the product economics. The classic marketing-driven retail database product model, the kind that puts billboards on the 101, stopped working as a financial model a decade ago -- development costs are too high for the marginal return. That has been replaced by mode…

There is a Stonebraker quote somewhere (can't find now) that basically says 'give me the workload and I will build you an optimised database'. The point with building a database enterprise is to build something that is sufficiently general purpose - not just optimised for one workload even if that workload is valuable for one company. In that world, there is only open source. Even snowflake, which is cited as a good example of a new proprietary, is built on FoundationDB and is like a hosted version with lots of bells and whistles. We are building a DB (TerminusDB) and started as prop and we couldn’t see a way to make it work without going open source.

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

#160

Post by XCSme »

yjftsjthsd-h wrote: post #127
XCSme wrote: post #123

Great post, I completely agree! I have debated over this for years while building a self-hosted analytics platform (userTrack.net) and I have always reached the same conclusions: if I open-source it, not only I affect its sustainability but also the business goals would become complete opposite to the product goals (eg. as you mentioned, making it easier to install improves product but affects the business). I now th…

> I now think that the best way to go is "paid-source" Is that just source-available software[0] (sometimes also called shared-source)? I ask not because I object, but because it's easier if we all use the same words for the same things. [0] https://en.wikipedia.org/wiki/Source-available_software

Thanks for letting me know, yes it's the same thing.

Source-available sounds accurate, the term is a bit long though and I think it is a more generic term that also covers open-source and paid-source?

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