The life and death of open source companies

No, I haven't succeeded because I haven't tried yet. However, I am surrounded by open source companies that succeeded.

The comment I responded to obviously reasons theoretically, and confuses some things. I will answer two aspects of it:

> Open Source makes "competing" with an existing company trivial, but with none of the invested costs. So the first mover, the program author, is always at a strategic disadvantage

That's not true. You can't just take some open source program developed by someone else and make money out of it. Let's say I develop open source product P. I offer support and consulting. Let's say you want to compete with me on P. You initially lack the expertise and the notoriety. If Alice and Bob want to get support or consulting for product P, they'd better turn to P experts, which is the company that builds P, me. For you to get customers, you need to prove the world that you are an expert. It takes spending time with the code, and also on marketing. But while you are spending time on this, I am too. You will also fatally need to contribute improvements to the product you are selling to make your customers happy. Actually, if you start contributing, it's a win for both of us and our companies can even be friends.

I'm not making this up. That's actually where I work.

> This is not an accident- it is baked into the very point of open source

So we just countered this. I'm not saying there's no risk. but that's not "by construction".

> There's a reason that very few people in the bazaar actually make decent money. There's a reason the cathedral has treasures.

And now we are confusing development methods, not "open source vs not open source". You don't need to be organized in "bazaar" to build free software. Look how, for instance, SQLite, as open as you could dream, manages very well with their non contribution policy. They are profitable. They have a "first mover advantage".

> These are two pretty distinct concepts, and the (traditional) motives for those two things don't merge terribly well.

Well, they can.

But my biggest argument is that you don't need to believe me. Many "actually open source" companies have succeeded. So, what gives?

I don't need to actually build an open source company to prove my point. Others have been doing well. Maybe me in the future, that's not completely excluded. Thing is, being employed also has advantages.

1. Solo developer (or small group), funded via e.g. Patreon

2. Non-profit funded by sponsorships and donations

3. For-profit but the software is free; the company charges for support and/or cloud services

4. Open collective, where donations fund bounties that are paid out to people who contribute patches

In other words, I think the only models that can really work are models where you genuinely don't care about other companies taking your code and using it for their own purposes. (This shouldn't be surprising - that's literally the whole point of open source!)

When I see companies trying something other than these four business models (usually because they desire more money than being a non-profit can offer) I inevitably see companies that might as well just not be open-source companies, because their licensing has to be restrictive for them to compete.

If you cannot answer this question for yourself you definitely should not start or participate in an open source project. Is there someone saying you should? GP isn’t.

- developing features or bug fixes in the open source product or an extension that are needed now by the customer

- developing a custom project (not in the open, or actually sometimes in the open) on top of your open source product for the customer

- supporting the customer for some integration with your open source product.

You can also try to sell paid extensions (that are still open source). That would be the case for XWiki Pro apps, or many WordPress extensions.

There's another way to do it, is develop your open source and sell your developer expertise for unrelated customer projects. I've worked somewhere working like this, but don't really believe it works well because you are not actually spending time in your project when you are doing this, and you are not incentivized to develop your own product when you do this. You are basically a consulting company. But you can still decide to do a bit of this.

Consulting and support can work for solo developers, but that might push quite some pressure and make it difficult to disconnect depending on the way you do this.