Should I open source my company? (2022)

There is some tricky big assumption being made here around sustainable profitability that misses our lived reality, especially given challenges like US developer salaries. Paraphrasing, OSS companies need lightning to hit twice, first for the OSS and then again for the company.<p>In our case, the Graphistry team loves and breathes OSS every day. We helped start what became the massively popular Apache Arrow and Nvidia RAPIDS projects, release our Python &amp; JS clients as OSS, and PyGraphistry[AI] is a graph Swiss army knife, including tools like GFQL the only embeddable &amp; dataframe-native &amp; GPU-accelerated implementation of the Cypher graph query language..<p>... But we sustainably grow primarily by selling cloud&#x2F;on-prem self-hosting licenses to enterprises, govs, and data companies to our GPU graph viz server. Thankfully, after years of grinding, that business is growing well. As a natural experiment, our alternate SaaS hosting revenue does support a tiny team... but not the majority of our team. Most of our innovation cycles would disappear without our self-hosting license revenue.<p>There&#x27;s some cross of winning lottery ticket, SaaS market profile, and technical defensibility getting missed in the article that I can&#x27;t put my finger on. Our launches of Louie.AI + GFQL are changing the OSS viability story in our particular case (I&#x27;d love to chat w successful founders here!), so I&#x27;m not saying it can&#x27;t work, but our experience to get to this point makes me worried for new founders reading the article.

&gt;&gt;When we discuss open source business models with other founders, there are three complaints that come up again and again. These are:<p>- People might criticize my messy&#x2F;bad&#x2F;unfinished code<p>- Hackers will find and exploit security holes<p>- Competitors will steal my Intellectual Property<p>I think they are missing a 4th item which is &quot;Amazon&#x2F;AWS will commercialise and sell a service based on my code and not pay me anything.&quot;

This is a really good in depth article but misses one thing so many projects miss: just sell to the civil government.<p>USG has so many programs (eg NSF grants) for tech and the disjointedness of civil agencies, IC, and state govts means they end up procuring a dramatically large landscape of software. The regulatory and compliance bar to entry is not nearly as high as you think especially if you are teaming your first few contracts. It is solid, guaranteed revenue to fund your project for usually 3-5 year commitments, and usually massively profitable.<p>I wish more open source companies took advantage of this, because usually fully private sector companies will end up baking open source libraries into their project and sell it at gigantic markups, pocketing everything. eg: <a href="https:&#x2F;&#x2F;x.com&#x2F;ssankar&#x2F;status&#x2F;1749202248700420587?s=20" rel="nofollow">https:&#x2F;&#x2F;x.com&#x2F;ssankar&#x2F;status&#x2F;1749202248700420587?s=20</a><p>When I was in govt I saw so much software that was basically open source maps + open source db for $12m. To give another frame of reference, I’ve seen OCR on PDFs carry a $2mm price tag, and a tool like weights &amp; biases carry $30mm (all $ per annum).<p>There are even other incentives here beyond deploying software; for example prioritizing fixing certain bugs or security flaws in your software — eg IC would have paid big $$ for safetensors.<p>I’ll even highlight four ways Supabase could do this: - Cybercom (direct) - DOS (direct or teaming) - VA (thru a PWS) - direct to govcon software powerhouses<p>And three ways to do this: - cold email GS 14s&#x2F;15s or equivalent - hire an ex-GS15 - find a solicitation that fits on SAM.gov then use GovPro.ai (white glove) or rogue (diy) to put together a response

The business model of supabase is to market themselves as an open source company but in practice, no one in their right mind will try to self host for production. (you know, some subtle missing documentation or some subtle bugs or some subtle missing important features). So they get the praise for being open source but in fact, it is never practical. It is just marketing scheme.

I love Supabase, commercial open source in general, and agree with lots of this post.<p>However this comment feels off:<p>&gt; In software ideas are cheap. Value is almost always created in execution of ideas.<p>I&#x27;ve heard this phrase around things like &quot;I have this cool idea for a startup - will you sign my NDA before I tell you about it?&quot;<p>However, when you&#x27;re open sourcing your software, you&#x27;re not just providing an idea, but a significant portion of execution of that idea too.<p>Sure, code isn&#x27;t the full execution - that expands to sales &#x2F; marketing &#x2F; support &#x2F; etc.<p>However, the article is a little glib towards the value of the code, suggesting it&#x27;s worthless without sales &#x2F; marketing &#x2F;etc. I don&#x27;t think that&#x27;s true.

For me the main question is not, is the code good enough or will competitors copy, but how can we make enough money to build a sustainable business?<p>The quoted and beloved open source projects are not good businesses: PostgreSQL, Python, Bitcoin, React<p>Mongo and Elastic are great, but exceptions. There are more successful closed source database companies than open source ones.<p>Open source companies are hard. However, they are super valuable for users.

I think the question is meant to mean &quot;Should my company open the source of its software?&quot;<p>But for me, answering the question as asked provides the path to answering the question as reworded. To me, the question as asked is about the nature of the software the company uses, not sells.<p>I personally will always choose an open source product over the alternative, even if I happily pay for support or just donate to support the project. Unfettered access to the source is fundamental to me, even for software I never intend to alter.<p>I know this seems to many like an extremist position. But I don&#x27;t like the idea that I am not allowed to tear down my microwave or doorknob or transmission. I might never be able to put them back together in working order. Or I might be able to find a gear with a missing tooth and execute a $2 repair instead of a $90 replacement. Or I might invent a new frakenstein microwave with a tranmission.<p>Extending the featureset of a web server or understanding why my plugin is crashing the host app, etc. are important to me. I think they are important to society. So I hold on to my open source extremism. If you show me the hottest new tiny web server that can do HTTPS&#x2F;4 with built-in AI in just 5Kb, I will be intrigued, but if it isn&#x27;t open source, I&#x27;ll stick with my current stack.<p>With this mindset, the software I produce is open source. And sometimes people pay me for it.

&gt; If after 6 years, Google tries to steal your lunch, you should have a brand, a team, and a community, that have spent the last few years preparing for a David versus Goliath-type fight.<p>From my experience, for procurement people all of that (brand, community, team, DX) will matter close to 0 in comparison to compliance, etc, if you are going head-to-head with an existing supplier like Google.

We have been thinking about this for our product; we are definitely (and have this openly on our site) going to open source all under MIT or Apache (whatever we like by that time), but for now, but either of those, not AGPL or open-core or something like that), we find&#x2F;found (not my first rodeo) it completely impossible to make money with that type of arrangement <i>as a product</i> (consultancy sure). Supabase had bucketloads of VC money, as do almost all &#x27;big&#x27; open source projects. If you are bootstrapped, this is not going to pay the bills for quite a while especially on an ambitious &#x2F; hard project. People only can work for free for so long and with closed code, a small team in constant contact etc you can move a lot faster by cutting the overhead needed for a successful OSS project.<p>It would be interesting to hear a story like this from a project of <i>similar</i> size that has $0 funding, has been founded in the last 5 years, has a fulltime team &gt;1 and exists for 3+ years and still would recommend this approach. How are they making ends meet? Things like Redis simply don&#x27;t happen anymore. At least; I haven&#x27;t seen any. Hell, even trivial projects, like langchain, get in 10s of millions of VC and those would be my candidates for actually being able to do it as a few-man-band while getting in money via different sources.

Open sourcing your company doesn&#x27;t make sense, in my view, unless you&#x27;re targeting developers or you&#x27;re building a product that no one would realistically self host anyway, with Supabase being a prime example of both. For just the latter, Plausible Analytics is one, where one <i>could</i> self host (I in fact do, via Coolify.io) but you&#x27;d lose out on updates unless you build your own CI&#x2F;CD system to pull and merge updates from their releases.

Probably not. Release your code publicly so people can read and contribute. Require paid licenses for commercial use over X numbers of seats where X is pretty generous and keep it free at the lowest tier. Those are hard things to claw back later without people completely losing their shit. Then the really hard part is to instill a culture inside your business that they paying customers are funding all the development and don&#x27;t just obsess about the enterprise use case at the expense of all else. Keep showing the free tier people that you&#x27;re listening to them. And that&#x27;s what you&#x27;ll fail at.

I love this topic, and I love Supabase. But I&#x27;d love to see a take on this from a purely business perspective, because so many companies lately have started out like this (Red Hat, Mongo, Elastic, Hashicorp, etc) and then walked it back after they became a success &#x2F; went public.

I feel like the third point (competitors) is a major concern that was just brushed aside. The &#x27;just out-innovate them&#x27; approach might work if your startup is well funded with a very capable and nimble development team. But what if you are a fledgling startup with very limited resources. You have a very small team that struggles to do a fraction of the features on your &#x27;TO DO&#x27; list. You don&#x27;t have millions of VC dollars that enables your team to keep the wolves at bay.<p>It wouldn&#x27;t even take a tech giant like FAANG to outdo your project after forking your source. A medium-sized company could throw a dozen programmers on the project and their fork would surge ahead of the original with respect to features, support, and distribution. They could out-market you as well.

He writes: &quot;But my code is bad: This is just ego. The person who spends the most time thinking about you is you, and the person who spends the most time stressing over your bad code is you as well.&quot;<p>In most places in life this is valid, but in the developer community I disagree. Developers love talking shit about each others code.<p>Still yearly ritual here to bash the &quot;Clean code&quot; book.

IMO, no. Maybe with a sufficiently restrictive license. If your core product is good enough and you permissively license it, odds are someone else with more money is just going to repackage it and sell it without throwing any money your way.<p>On the other hand if your product isn&#x27;t good enough then the decision doesn&#x27;t matter since it won&#x27;t take off either way. :)

Pro tip: Name your company &quot;Open___&quot; then don&#x27;t open source it.

The list of main complaints against OSS they present here is (conveniently?) missing the biggest one, in my opinion:<p>Your users can just host their own version instead of paying you.<p>It seems like many OSS companies mitigate this by leaving out features from the OSS version or making the deployment more difficult than it should be. I’m not complaining, I think it’s fair, but this is the reality.<p>It’s funny how they don’t address this one, but instead they list “oh no my code isn’t pretty” as a valid complaint against going OSS. Who cares.

I&#x27;d say that open-source works best for companies when they don&#x27;t open the main thing. Meta building React in the open is a good example. The community gets a well-maintained library. Meta gets free testing, code contributions and potential hiring pipeline. When trying to compete with Meta, React gives you virtually no advantage. There&#x27;s no incentive to leave important features out of the public codebase. Both Meta and the community benefit.<p>Would it make sense for Meta to open the codebase for facebook.com? Aside from studying&#x2F;scrutinising the code, the only other thing you&#x27;d be able to do with it is to change the logo and try to compete with Facebook.<p>In this example, it&#x27;s still probably not enough to disrupt them thanks to the social graph and infrastructure complexity. But you could imagine moments where even Meta gets nervous when anyone can start competing with feature parity from day one.<p>Over the long-term, it&#x27;s more likely that Meta would want to keep some features private. It&#x27;s also less likely that they would get lots of quality contributions back. If you&#x27;re running a fb.com clone in production, you&#x27;re likely trying to compete with them on some level. This leads to a weird relationship with the community and limited value for both sides.

One aspect I don&#x27;t see mentioned is that it&#x27;s not just about open sourcing your codebase. Many companies make the mistake of using open source as a marketing tool to attract users, and as a funnel into their commercial plans. They prioritize working on what makes them money, instead of being good maintainers of their open source product. They don&#x27;t know how to build and nurture their open source community, and treat open source users as second-class compared to their commercial users.<p>Don&#x27;t do this. The OSS product needs to be as featureful as your commercial product. It&#x27;s fine to offer some commercial value added features and services that would only be useful for enterprise customers, but these shouldn&#x27;t be core features of the product. You can have priority support for your paying customers, but don&#x27;t leave OSS users with &quot;community support&quot; only. At the end of the day, the company does need to make money to survive, but treat all your users with the same respect. If the product is good enough and solves a genuine problem, you won&#x27;t have difficulties monetizing.

From a Firebase perspective they might think that they never should have documented their concepts and APIs in the first place... :)<p>So a bit of the right words to the matching user base and with good points. Just that you always need to draw your own conclusion from your unique position.<p>Kudos for the the nicely adapted Jurassic Park scene.

Just kicked off a project to explore open-sourcing what we&#x27;ve built (VC funded). I&#x27;m considering a different tack which I think may be interesting.<p>We have a lot of client libraries, already open sourced. Then we have the hosted APIs and DB which are not open. Making all the close-source stuff open, feels like a big effort, with an unclear reward and more likely that we just end up with a hard to install OS project, since it feels like the hosting expertise _is_ part of the core value prop.<p>What I&#x27;m excited about though is whether we could take the hosted piece out of the equation and find something that is pretty different, but has its own niche. For us this would be replacing the web UI and DB hosting of the paid product, with a CLI and simpler git based hosting for an open source version.<p>ie If you want hosted feature flags, we think you should use the hosted thing, but if you want gitops style feature flags (100% reliable), then use the OS version.<p>I like the idea that we could really focus on making the open version great in its niche, but have a super clear line about what is paid &#x2F; hosted, to help us avoid the complexity of always needing to decide how to nerf the OS version.

&gt; Once your project reaches significant scale, you might find yourself in a situation like Elastic, or Mongo, where large cloud providers are offering your product with a superior distribution model.<p>&gt; Secondly, and more constructively, you should prepare for this eventuality by finding areas where you can outcompete anyone. Most cloud providers are notoriously bad at Developer Experience for example, so take advantage of that and make DX one of your core competencies. If after 6 years, Google tries to steal your lunch, you should have a brand, a team, and a community, that have spent the last few years preparing for a David versus Goliath-type fight. Make sure you&#x27;re not blindsided by something like this by planning for it from the beginning. You have enough time and focus on your side to construct a winning strategy.<p>Consider Google Firebase, which runs on Google Cloud and can access services from Google Cloud[1], but has a separate frontend, focused on DX rather then features, and imagine Amazon Supabase.<p>[1]: <a href="https:&#x2F;&#x2F;firebase.google.com&#x2F;firebase-and-gcp" rel="nofollow">https:&#x2F;&#x2F;firebase.google.com&#x2F;firebase-and-gcp</a>

Are there many success stories for open source targeted at end-users? E.g. imagine if Photoshop is open source, would Adobe be financially successful?

The author is clearly a utopist, advertising and trying to promote his own oss views. However, while oss has its growing niche it&#x27;s clear that it isn&#x27;t for everyone. The thing to ask yourself before going oss path is what are you gaining by going oss and what are you trading for that gain. For supabase it&#x27;s clearly beneficial to be oss, they are a niche database, and by going oss they can benefit a lot from integrations, not to mention they are basically ripping off the evil firebase. So by going oss they are perceived as heroes. On top of that who would use another closed firebase that isn&#x27;t from google? They can&#x27;t compete on pricing, nor the scale. I think supabase were even advertised as open source firbase at some point.<p>However if you are not ripping off some popular commercial tool and making it open source, and making open source as your main differentiator, in that case there is very little to gain by going oss. You might as well get most of authors advertised &quot;oss benefits&quot; by just having great developer experience and docs, while giving very little in return.

I understand you can give 1000&#x27;s of reasons why it&#x27;s fine. But it&#x27;s still IMHO a sad reality that a giant cooperation cannot play it fair by being a corporate sponsor of the open source projects that they more or less wish to directly use as a service...<p>I get that legally this is fine but ... Common... adapting FOSS for your own use cases in your basement or little company is still very different then a giant cooperation outcompeting you before you ever had a change...<p>There might be room for a license to make FOSS software more like BSL if used by a company above a certain revenue threshold or w&#x2F;e... Perhaps legally that&#x27;s impossible, otherwise I have no idea why such a template does not exist yet.

Well, Microsoft invented the &quot;sale of proprietary software as a license to end-users&quot; model. Red Hat, on the other hand, offers value-added services on top of open-source software. It&#x27;s easy to compare their relative market valuations.

I think the distinguishing question is, &quot;Is the company&#x27;s software a <i>tool</i> used to fulfill the company&#x27;s goals, or is the software <i>itself</i> the goal of the company?&quot;<p>If your answer is the latter, then you have more problems in store than open-source viability. You aren&#x27;t genuinely testing&#x2F;dogfooding your product. Your product goals will trend away from real customer value and toward implementation convenience, self-compatibility, 3rd-party incompatibility, and a closed-minded product vision. The only way to keep this business model viable is to monopolize your market. But will it be <i>you</i> monopolizing, or will it be FAANG?

On the topic of open sourcing your core business, founders often worry that a competitor is going to take their source code, fork it, and directly compete with them. But, is there an actual example of this happening for real and the fork winning out and killing the incumbent in the market? I mean there’s a fork of Signal that doesn’t require a phone number (which is Signal’s heinous transgression if you poll HN) and we’re all still using Signal. And all you have to do to prevent bigcorp taking your stuff is slap the [A]GPL on it for “free users” (while still allowing others to purchase the source code under a more permissive license should they require it).

We are building some educational video games and considering starting a company to help sustain the effort. If possible, it would be great to publish the source code and game assets as free&#x2F;open software and free cultural works. However, I’m not sure about a business model to fund continuous research and development. Is anyone here working on or aware of any open source game studios with sustainable funding&#x2F;revenue? Any other advice or consideration about licensing and business models? Thanks in advance :-)

I think many companies probably don&#x27;t like to be open source because<p>- they like the idea of &quot;security through obscurity&quot;. Open source means more work patching found vulnerabilities, so they rather not publish their code and instead tick check-lists for compliance and do blackbox pentests which makes them look secure.<p>- like to do marketing that exaggerates the innovation of their product. That&#x27;s difficult to do if everyone can see the code.

In this case the ends drive the means. &quot;Should I open source my company&quot; is a decision like &quot;should we write our code in C++?&quot;<p>Without starting a flame war there are good and bad reasons to choose an implementation language and they should be driven by your business needs, whatever they are.<p>The same is true for how you plan to license your code and what business model you build around it.

I&#x27;ve actually been thinking this a bit for one of my products.<p>I&#x27;m thinking: I will give it a closed source grace period, then, by that time, it should either be:<p>1. A dud, so close the offering, show the source.<p>2. Working well, in which I can open-source and rely on brand recognition to carry forward the business.<p>Releasing as AGPL3 at least means that I get some code contribution back, (right? Right?!)

Open Source is not a business model.<p>Open Source is a licensing and development model.

Does it provide more value for your business than it distracts from your business? That&#x27;s a difficult calculation. Personally, I love open source, but I wouldn&#x27;t open source a business unless I needed to.

What about for desktop apps? Are there good examples of this? Unless you can offer some cloud&#x2F;online&#x2F;support service to go with it, there&#x27;d be no reason for most to pay?

If you are interested in learning about open-source marketing, check: <a href="https:&#x2F;&#x2F;gitroom.com&#x2F;blog" rel="nofollow">https:&#x2F;&#x2F;gitroom.com&#x2F;blog</a>

Any thoughts on (F)OSS models for IoT?<p>We’ve usually got some hardware and firmware closely bound together, with traditional model being selling hardware with proprietary firmware.<p>Any examples?

I&#x27;m not sure if an MIT license is sustainable long term. I see most open source companies adapt AGPL, open core or source available licenses.

Yeah yeah. Haven&#x27;t we already seen this going on again and again. Companies love OSS until they get some amount of traction in the market. And they&#x27;ll jump ship to being a proprietary vendor right away after that. Can&#x27;t believe people fall for this shit all the time.

`And not one of them were ever required to solve a LeetCode problem over Zoom.`<p>I can see some motivated developers benefit from this. But now those devs are working on someone&#x27;s &quot;open sourced&quot; company for free thus growing someone&#x27;s company in exchange for employability elsewhere. I can&#x27;t shake of the feeling of borderline exploitation when I see the phrases &#x27;my company&quot; and &quot;open source&quot; next to each other.

Really like the pointer to the well known security. First time I actually saw anyone mention it on something popular.

i think the biggest moat OSS companies have is production-grade infrastructure hosting.

OSS is a thing you <i>buy</i>, not a thing you sell.

This seems to work fine for Temporalio.

No unless you like, giving away the goose that lays the golden egg. How successful would Coca-Cola be today if they open sourced their company?

open source is not enough anymore... humanity needs &quot;lean open source&quot;... and stable in time.

I mean Supabase was initially a glue layer on top of existing open-source tools, not sure if they could’ve kept it closed source even if they wanted (though I guess most of the licenses of the stuff they used would allow it).

No