Why you should build an open-source startup

I worked at an open source startup once. I was -shocked- to repeatedly run into the misconception that because the code was open source, anything -using- the code was open source.<p>I saw several potential sales get tanked because the customer had an advisor who believed that if they used open source to develop their website, they would no longer own the content. For example, a furniture company thought they would lose control of their pictures of the furniture. Another blog style site thought they would lose control of the blog posts they wrote. Literally, I am not making this up. It's like believing that Microsoft owns your document because you wrote it in Word.<p>No amount of discussion, examples, or logic would dissuade them. I can't imagine how this idea survives, but I saw it as recently as a month ago in a comment here on HN (which of course I can't find right now), so it's not completely isolated.<p>I'm not sure open source was a net win for the startup I worked at. Due to complicating some sales and assisting a few competitors, it wasn't a clean slam dunk.

This is a <i>bit</i> disingenious. When your core product is a hosted service, its a lot easier to be open source. There's a lot more into using your product than just compiling it.<p>Take a standalone product like Camtasia. It works really well and its worth the money to buy it. But if it was FOSS and I could just donwload the sources, build and it use it, and only had to pay for support -- well I probably would never buy it. I've never needed support with it. It's so easy to use, I've never had a need for support (in fact, that's partially why I'm willing to pay for it!).<p>Figure out what your business model is first. And then do what makes sense. Open sourcing often does, but not always.

Alright, you've convinced me that making life harder for myself is somehow a way to get and maintain customers. What should I make? /sarcasm<p>The only good piece of advice here is to be awesome so your customers will love you and your product. ... I'm pretty sure that's common sense, and everyone would do it if it were that easy.

I still don't "get" the allure of open source. As a consumer of my product you are not entitled to anything other than the functionality it provides. That's what you paid for. If you want more than that, then you should pay more to get the source code and knowledge that went into making the product.<p>I just find it striking how people want to give their product (source code) away for free, without limitation. Just seems like such a waste and detriment to the software engineering profession (i.e., why pay someone to write something when you can go get it for free and piece together yourself).

There is the issue of attracting venture capital if your core product is open source. It simply isn't there the way it is for proprietary startups.<p>On the other hand, selling services and hosting means an actual revenue stream. Strange world we live in.

I was hoping to see more discussion on the actual premise here. For example, should dropbox open source? Should squarespace open source? What did reddit get out of open sourcing (karma?)? Wordpress obviously benefited from of an amazing supporting complementary ecosystem at the same time they turned their own product into a commodity. Love to hear what you think.