

Why you should build an open-source startup - michokest
http://blog.teambox.com/open-source-companies

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pkteison
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.

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.

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.

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.

~~~
kenjackson
Dollars to donuts, I bet its because of the GPL license. People hear about it
and then extrapolate. If you're not GPL then you need to make it clear that
you're not a copyleft license. If you are GPL then its trickier because you
have to call out what sorts of assets and distribution mechanisms are covered.

~~~
pkteison
Why? The license commercial software uses gives you no rights to do much of
anything, yet nobody thinks Adobe owns photos edited in Photoshop. Why should
granting more rights change that? It makes no sense to me.

Edit: And GPL already calls out what is covered. Source code. It's incredibly
clear.

~~~
kenjackson
Why you ask?

 _The license commercial software uses gives you no rights to do much of
anything, yet nobody thinks Adobe owns photos edited in Photoshop._

Exactly. No one thinks that with Adobe. Yet as the original poster pointed
out, people do have confusion with open source licenses.

 _Why should granting more rights change that? It makes no sense to me._

Rights granted with GPL aren't strictly more to the person deploying the GPL
code.

 _And GPL already calls out what is covered. Source code. It's incredibly
clear._

The GPL definition of source code is the following:

 _The "source code" for a work means the preferred form of the work for making
modifications to it._

Honestly, I'm not sure exactly what that means. I have a good idea, but if
deploying with it, I'd certainly get a lawyer involved.

------
kenjackson
This is a _bit_ 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.

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!).

Figure out what your business model is first. And then do what makes sense.
Open sourcing often does, but not always.

~~~
cookiecaper
I think a couple of tweaks to the conventional OSS licenses would go a long
way in getting source into the hands of more users. While I appreciate the GPL
and think it's a great option for those who want to use it that way, the fact
is it's far too limiting for anyone with an intent to commercialize the
software (the actual software, not ancillary services like support). If
someone would tweak the license to make it so that there was no unlimited
commercial distribution it would become much more attractive, and hopefully a
lot of software that today is just a blob would adopt the license and come
with source.

~~~
noahl
Just to clarify - you want a license where you distribute the code to your
product along with the product, but your customers (who receive the code)
can't then redistribute it themselves? Or perhaps they can even redistribute
it, just not commercially (or not in binary form)?

That does seem like an interesting middle ground. It seems like your goal
would be to develop a community of developers around it, but with the
exception that you are the only person distributing the software (for a fee)
to non-developers.

~~~
cookiecaper
Yes, I want to see that kind of license. The unlimited redistribution is the
thing that really makes it difficult to make money selling the software
portion of GPL'd software. For some applications, doing the Red Hat business
model of commercial support works fine, but if you have something consumer
level, you will not make anywhere near enough money off of that.

Licensing something under the GPL makes financial gain from your copyright
practically impossible. People make much more money if they retain their legal
right via copyright to be the sole source of (commercial) distribution. Hence,
very few corporations are interested in using the GPL for software that they
intend to package and sell as its own product.

The ideal license in my mind would include a clause that source and/or
binaries should only be given to licensed users. I understand this greatly
restricts freedom of distribution compared to the GPL, especially since a user
can't know if a user is licensed or not (a practical application of this may
be a copyright notice bundled with every patch, telling unlicensed persons
they are not allowed to use it), but we know that GPL is too lax on this front
from a commercial perspective, making it inviable to sell GPL software (the
software itself, not attached services) as a major product. In some cases, a
merely non-commercial license might be acceptable. I am always in favor of the
most freedom, but we know that the amount of freedom given by the GPL is too
much to retain profitability.

I would still encourage GPL use where possible, but a license like the one
I've described would make it possible for consumer-friendly developers
(Valve's a good candidate imo) to open up their code, allow the community to
hack on it and share their hacks amongst themselves, and still protect their
revenue stream. This could also be extended to game engines like Source; a
non-commercial license would be ideal for that so hobbyists, academics, etc.,
could still learn from it and use it, and Valve could still make their money
licensing it out to other game developers.

The point is to get source into the hands of as many persons as possible. I
don't think it's good to restrict this because of divergent economic or
political realities; if you're using a computer, you should have source to
your programs, and be able to modify them as you see fit, and developers
should still be able to make money off of their software.

~~~
noahl
Yeah, I would love to see that too. Do you happen to know any software
developers looking for a license? :-)

I wonder if the FSF would agree to write such a license. It doesn't quite fit
with their goals, I think, but they also preach "pragmatic idealism". And they
provide the LGPL, so it's not without precedent.

------
wccrawford
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

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.

------
droz
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.

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).

~~~
michokest
yourPricePerHour * ( hoursSpentInstalling + hoursPerMonthMaintainingTheService
* monthsYouExpectToRunIt ) + costPerMonthForServers * monthsYouExpectToRunIt >
yourPricePerMonth

If this formula is true, then users will pay for your service instead of doing
it themselves. We have seen this pattern consistently.

Our accounts sell at $12, $29 and $99, which is usually much cheaper than
setting it up on yourself and running your own server. We even have switchers
that used to host their own version and came to our online version.

This is also being the case with many Wordpress hosting sites. Multi-tenancy
brings an economy of scale that allows you to keep good margins while being
cheaper than hosting it yourself.

~~~
forensic
So you're saying make it very hard to install, very hard to maintain, and run
on very expensive hardware.

Yep, that sounds like the business model we all know and love. Apache proved
it works.

~~~
michokest
I'm talking about making your offering better so you're the main choice, not
adding crap to your open-source offering so it's harder.

------
michaelchisari
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.

On the other hand, selling services and hosting means an actual revenue
stream. Strange world we live in.

------
shuri
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.

