Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Problems With Open-Source Business Models

medium.com

Post reply on HN
Print view View original

71–80 of 100 posts

Re: Problems With Open-Source Business Models

#71

Post by john_moscow »

ChrisCinelli wrote: post #62
john_moscow wrote: post #41

Earlier quoted context omitted.

VCs don't care about profits anymore. Their bet is on getting hockey stick growth using tricks good enough not to spook the uneducated retail investor (that often involves selling dollars for cents) and then dumping the hot potato into the public market. It isn't long-term sustainable and it will result in a major correction one day, but that's the game currently.

That most of the VCs care is making attractive the company between their investment and their exit, it is completely true. That is also why quite often they bring in (and sometimes replace founders with) "professional" executives before the IPO. Some of these people are not usually the best people to maximize the long term trajectory of the company but they bring more confidence to IPO investors. If you want to have…

I find it funny how the ethical side of those games is always conveniently ignored...

Re: Problems With Open-Source Business Models

#73

Post by ChrisCinelli »

0xdeadbeefbabe wrote: post #54
eruci wrote: post #49

I was pondering this very question as I just launched an open source reverse geocoding/geolocation name service API ( https://3geonames.org/api ) whose business model consists upon selling a nicely packaged server AMI on AWS. It works well both ways, in the sense that those who are capable coders may download and configure/install the software themselves. Some others will just skip the hassle and buy the Marketplace…

Poor documentation is a strategy, and if it's poor enough you can run your own university/camp. A large complicated codebase is another strategy. Edit: Strangely enough, I don't know anyone who did this on purpose.

It seems that today is it is hardly a good strategy. Unless you are giving something so valuable and scarce, poor documentation is pushing away adopters. The average engineer will think about building the service on their own.

Re: Problems With Open-Source Business Models

#74

Post by ChrisCinelli »

eruci wrote: post #49

I was pondering this very question as I just launched an open source reverse geocoding/geolocation name service API ( https://3geonames.org/api ) whose business model consists upon selling a nicely packaged server AMI on AWS. It works well both ways, in the sense that those who are capable coders may download and configure/install the software themselves. Some others will just skip the hassle and buy the Marketplace…

Is the data open sourced too?

Re: Problems With Open-Source Business Models

#75

Post by eruci »

ChrisCinelli wrote: post #74
eruci wrote: post #49

I was pondering this very question as I just launched an open source reverse geocoding/geolocation name service API ( https://3geonames.org/api ) whose business model consists upon selling a nicely packaged server AMI on AWS. It works well both ways, in the sense that those who are capable coders may download and configure/install the software themselves. Some others will just skip the hassle and buy the Marketplace…

Is the data open sourced too?

Yes. It is from geonames.org

Re: Problems With Open-Source Business Models

#76

Post by cortesoft »

sonnyblarney wrote: post #65
tinyvm wrote: post #34

I strongly disagree with the hypothesis raised in the article. First , most open source companies these days are Ventured Back ( Elastic , CockroachDB, MongoDB etc..) meaning the core of the issue isn't "AWS" not paying license fees or people creating tech on top of Open Source , it's VCs who want their money back times ten. Companies like MongoDB/Elastic have raised hundred of millions and yet are still not profitab…

" it's VCs who want their money back times ten" Keep in mind that this is the market speaking, not a 'specific need of some group'. If it costs money to productize and support something, and it's risky, it's going to be VC and there will be terms that take that risk into account. Another way of saying it is that '10x' requirement is a function of the risk of the business model of those taking the money . (Which by th…

> Keep in mind that this is the market speaking, not a 'specific need of some group'.

I wonder sometimes, though, which market is being served.

I think in some ways, it is actually the VC market itself that is being served, not the customers of the company the VCs are investing in.

There is so much VC money floating around, and they are 'in the market' for investments to make with that money. The problem is sometimes there just isn't a downstream market that needs to be served by a company funded with all that money, so the VC needs to try to find one. And they often times reach pretty far to find that investment opportunity, and try to force a downstream market where there is none.

There might not BE any market for the 'productized and supported' version of the open source project that a VC wants to fund, but since they have so much money they decide to try to force it to fit that model. They put a ton of money in, grow the company, and then are forced to monetize to support that big of a company.

Maybe the community was being served just fine without that much investment, but now that the investment has happened, the company is forced to act in ways that AREN'T serving that community.

Re: Problems With Open-Source Business Models

#77

Post by metildaa »

john_moscow wrote: post #71
ChrisCinelli wrote: post #62

Earlier quoted context omitted.

That most of the VCs care is making attractive the company between their investment and their exit, it is completely true. That is also why quite often they bring in (and sometimes replace founders with) "professional" executives before the IPO. Some of these people are not usually the best people to maximize the long term trajectory of the company but they bring more confidence to IPO investors. If you want to have…

I find it funny how the ethical side of those games is always conveniently ignored...

Ethics reduce profit, thus they are ignored when there is no regulator or law enforcing them.

Re: Problems With Open-Source Business Models

#78

Post by sonnyblarney »

cortesoft wrote: post #76
sonnyblarney wrote: post #65

Earlier quoted context omitted.

" it's VCs who want their money back times ten" Keep in mind that this is the market speaking, not a 'specific need of some group'. If it costs money to productize and support something, and it's risky, it's going to be VC and there will be terms that take that risk into account. Another way of saying it is that '10x' requirement is a function of the risk of the business model of those taking the money . (Which by th…

> Keep in mind that this is the market speaking, not a 'specific need of some group'. I wonder sometimes, though, which market is being served. I think in some ways, it is actually the VC market itself that is being served, not the customers of the company the VCs are investing in. There is so much VC money floating around, and they are 'in the market' for investments to make with that money. The problem is sometimes…

For every open sourced that is used, there definitely is at least some need for a slightly better version of it. The question is, at what price?

So if VC wants to over-fund products and basically give away development and services, it's not all that bad.

I'd rather see more Engineers employed and learning than less.

Re: Problems With Open-Source Business Models

#79

Post by ivalm »

aaachilless wrote: post #28
tick_tock_tick wrote: post #21

Earlier quoted context omitted.

The biggest issue with this is very few "small" companies envision staying small forever. Who would risk building their company on a stack that you lose the license for if you do too well? I think what really happened is people didn't quite realize, or didn't think it would matter, what they were giving up when they open sourced their software. It sounds good and feels good but 5-10 years later when it's a core compo…

> Who would risk building their company on a stack that you lose the license for if you do too well? You could frame this in a different way and come to a different conclusion. Instead of describing OSS as a "stack you lose the license for if you do too well" you could say "stack you don't have to pay for unless you're successful".

Which is still worse than "stack you don't have to pay for"

Re: Problems With Open-Source Business Models

#80

Post by aey »

tannhaeuser wrote: post #69
ChrisCinelli wrote: post #66

Earlier quoted context omitted.

What do you mean by "solving today's problems" ?

Monopolization, privacy invasion/attention economy, and the demise and weaponization of the web as a medium for misinformation

Crypto currencies have captured 100b+ in value trying to solve those problems. Vast majority of the code is open source as well.
Post reply on HN