

Ask HN: Why don't more web startups open-source their applications? - te_chris

This is something I've been thinking about a bit recently, but decided to look into it a bit more.  One of the only ones I could find (apart from the obvious such as diaspora, though they don't seem to have a business model as far as I've seen/googling tells me) is SugarCRM, who seem to be doing quite well with a combo of GPL'd code and a commercial SaaS product built off that code.<p>I guess what I want to know is why is this such a bad idea that a lot of us, who are OSS advocates, don't follow this sort of business model (or another OSS biz model)?  Also I was wondering if there are any famous casualties of companies trying this and it failing on them?
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jasonkester
How about this as a fundamentally equivalent question: Why don't more web
startups run poetry competitions?

Much like Open Sourcing your code, running a poetry competition is unlikely to
add enough business value to offset the resources it will take to accomplish.

Sure, there are guys on your team who _really_ like poetry and would go out of
their way to help organize the contest. And the poetry fans that happen to be
your users would think more of you for doing it.

But at the end of the day, it's just not a good business decision, so you
don't do it.

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csense
As a business, you want to look for "sustainable competitive advantage." A way
to differentiate themselves from competition and make a profit.

Having closed-source code is a sustainable competitive advantage for many
companies selling heavily software-dependent products like games, apps,
websites, etc. "Advantage" because your competitors don't have it,
"sustainable" because, with adequate investment in new features, you can keep
your platform ahead of copycats.

There are a variety of strategies to make money with open source, but as a
business, your first priority should be figuring out how you'll make enough
money to adequately pay your owners, employees and vendors. The answer to that
question is sometimes "open source," but not always.

Strategic reasons can sometimes justify open source products. For example,
consider infrastructure components that are an incidental byproduct of your
operations, not a core piece of your product. Twitter Bootstrap immediately
comes to mind. Twitter releasing Bootstrap as open source doesn't help its
competitors in the same way that open sourcing the code to its main website
would, and allows the community to provide some amount of testing and
improvement which may help them in the future.

But there is no one-size-fits-all answer; whether to open-source your code,
and what to open-source, depends on your specific situation.

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benologist
For a lot of sites the code is pretty much the sum of the business and the
rest is just customer acquisition which plenty of people will have more
experience and money and smarts to figure out better and faster than you.
Maybe not directly at your expense but it's easy to imagine bidding against
competitors you created or gave a head start to in AdWords.

There are exceptions, anything where the code is secondary to the community or
something like reddit.

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_delirium
One problem is that with SaaS apps, the GPL isn't "viral" in the same sense
that it is with desktop apps. It doesn't provide protection against a
competitor taking your code, adding proprietary extensions to it, and then
running a competing product that's an improved version of your product without
sharing back the improvements, because they would only be "internal"
improvements that don't have to be shared. You can stop that with the Affero
GPL, which considers hosting the app to be equivalent to "distribution", but
enough people seem to hate the AGPL that there's not a lot of incentive to
bother releasing at all.

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michaelpinto
My guess is that sadly investors value unique intellectual property that can
be protected, and they might not be too crazy about open source as a result.
This is because if the company goes south the patents may be the only thing
the investor can salvage.

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mechanical_fish
The problem with this hypothesis is that you never hear anyone in the startup
community talk about their patents and how much they are worth. Not on HN, not
in the media, not on Techcrunch. You never see an "Ask HN" about how to file a
patent, or license a patent, or litigate a patent. And I don't recall ever
hearing a VC talk up the awesomeness of patents, or encourage a startup to
waste even 0.1% of its time filing for patents instead of doing something more
valuable.

~~~
michaelpinto
If you're getting angel money you're right (because you're doing proof of
concept) -- but if you're at the VC stage that's incorrect. And I've gotten
that from VCs...

