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Copyright ..

I wouldn't bet on copyright either, but isn't that at odds with selling software?

It doesn't apply to web apps, but it sure applies to other kinds of apps, like mobile device apps (which YC occasionally funds). On the iPhone it's not a big problem because the device is so severely restricted. But what about the Android platform? I hear copying is easier over there.

Fundamentally, the only way to make money from software is to restrict something against non-paying users. Traditionally, companies restrict using the software. With web apps, the software is not what you sell, but rather you sell the service (the user doesn't even have a copy of the software).

Open Source is also at odds with that, because the whole idea of Free Software is to not impose any artificial restrictions on the usage of software.

The only companies I've heard of that go too far with Open Source are Red Hat and Canonical.

What most people nowadays tend to do is "open core". They open source certain libraries and infrastructure, but not the whole thing. That's not necessarily a bad thing, and it might actually be the balance that's needed between open source and (traditional) commercial software.

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