The incompatibility of open core and profit

That's why the world runs on open source software. It's the cheapest way to share the responsibility of this common core of software. The only way really. Doing everything in house is stupidly expensive. Where open core companies fail is in attempting to monopolize their core of software. It's all the downsides of open (people copy your stuff) but without the upsides (you do all the work, at great expense). And by trying to mitigate the downsides, they actually make the problem worse.

The problem with open source companies is that most of their software rapidly loses its value after they start exploiting it. The type of open source company that insists on restrictive licensing (e.g. AGPL) and transfers of copyright tend to fail to create a software community around their stacks that would make them long term successful. That doesn't mean open source is bad for business, but just that that particular style of doing business isn't great. You throw out the baby with the bathwater. You incentivize your users to find (or worse build) alternative solutions. Basically, such companies being successful merely creates the financial incentive for others to do similar things. Launching such companies is easy with VC capital. Keeping them long term relevant and profitable isn't because inevitably a cheaper, more open competitor emerges.

That's why e.g. the Apache licensed ecosystem is highly successful. It regularly spawns new companies and they build on each other's success. And they end up sharing a lot of code. Which then becomes a shared commodity. Such is the nature of software. VCs don't like this because this doesn't produce a whole lot of ridiculously profitable unicorns. But it does create a lot of value. And there is plenty of money that can be made by developers working on such software. Which is why there is so much of it. OSS isn't charity mostly and there are a lot of well paid developers working on it.

This widespread relevance of software is part of the problem: the scope is so wide it spans an enormous range of needs and business models. Given that the financial system itself is becoming almosy fully a digital artifact it is a legitimate question whether e.g., money itself should be "open source"? Whatever one thinks about the cryptobro universe, that proposition cannot be unseen. If money itself is up for redesign (and if you follow the so-called CBDC discussion that is very much the case), what is ultimately our objective? What legally defined organizational structures are available and how do they incentivise delivering on the objective?

The other part of the problem is that it by far not just about source code. Actually nobody has any use for code in pure isolation. The value proposition is always somehow coupled with data and code coming to life so to speak by operating on data. Whether open data or private data. Which opens yet another can of worms around privacy, commercial secrecy, copyright, IP etc.

My humble punchline is that the open source journey is neither easy nor simple and it will get even messier. But the general principle of "doing well by doing good" is valid, it is what binds us all and the alternative is almost certainly a dystopia.

You mean to say you built an entire project, large enough to need “a few full-time people” to maintain it, without ever getting feedback from actual users? Chance alone almost guarantees that you built the wrong thing and nobody will want to use it.

2. "IP is free, support for $$" like Red hat is a viable business model but captures only a very small part of the overall value. The much larger part is captured by private sector selling SaaS, Cloud infra vendors. Software has become a commodity, it is user-facing services that capture value today.

3. The value capturing works fine for the companies but little to nothing of that value flows back to the people who write or maintain the software. This needs to be overcome. Openness is important but we need to value it, and governments as biggest buyers of services play a role. If we valued openness more consequently, it would lead to more opportunities for open source developers to capture value by offering user-facing services.

Interestingly the mental thoughts of each party affects the outcome. i.e. Let's say until now 90% of open source projects were fully truly open. Once a large percent say 40%+ are open core as a trick to lure users into a later high cost trap. At some point users will become wise to the trick and open-core will no longer have marketing value. It's similar to food adverts saying "no added sugar", I actually take it as a negative and assume they have a lot of natural sugar or have added something else e.g. salt/fat.