Could going open source help you grow your business?
Not sure if this is the best group to ask this but I had this idea in mind for some time now.
In a heavily competitive (not saturated) market where all competitors all closed source and already driving growth, could going open source give your business the edge to enter the market and start building a meaningful audience?
This assumes that being open source is NOT the only differentiating factor.
A nice example to demonstrate would be medusajs vs shopify!
Thanks for reading, all thoughts are appreciated!
There are open source tools like Retool and Cypress whose tool is open source, but they offer a paid service that offers additional functionality. There are viable opportunities for growing a business with open source tools. The open source tool acts as a trial for you to "get your foot in the door."
Open source seems to be a strong approach for products that require the trust of customers.
For example, take IT security as an example. If companies need to make sure your product is safe to use prior to any purchase, with an open source core you allow them to do exactly that. They can also hear the voices of the community. This builds trust.
To be profitable, for one thing you can disallow commercial usage and sell licenses. For another thing, you can provide added value that does not come open source like a hosted version of the product that is readily usable.
It depends on the market you are targeting. it makes sense to opensource if you are targeting enterprise customer and your product would become part of their infrastructure so as a risk mitigation they prefer opensource solutions. For SMB market i don't see any point in open sourcing the for profit product as they cannot hire technical folks to manage the opensource product what would end up happening is your product getting copied by your competietors.
If goal is not to profit or it is not central to my for profit product than i open source it so that others can also benefit from it.
I don't think there's a big correlation.
Users don't buy your product because it is open source, but because it improves their life/business/etc.
It could help, but then again there are a lot of existing high-profile open source projects that can barely cover expenses.
Depending on the product, you might provide your users with a 'false' sense of trust (an open source project still needs to be audited and maintained as much a closed source one).
Under other circumstances it might help convert, if someone expects to use your software for a long time, they might be happy to know they can fork/self-host (easier said than done) if you ever decide to shut everything down.
If you ever decide to go for it, you need to consider how you'll handle contributions like issues, pull requests etc. as they can easily turn into a maintenance nightmare.
I've thought about open sourcing parts of my codebase in the past, and the only place I think it makes sense (at least for me) is if the users are running something of mine on their machines - as not everyone is happy to run arbitrary code.
Excellent points. But I'd add that it really depends on your market. For example, a lot of indie hackers are selling their products to other indie hackers, developers, etc. If that's the case, then open source can be a huge differentiator. I personally choose an open source project over closed every time (all things being equal).
Personally, I’m a HUGE fan of open core companies. I believe that when you open source a product it not only allows you to grow faster but it allow your customers to have much more trust in you and a stronger say in the product grow in addition to lower marketing costs.
But it won’t be responsible to say all of that without the down sides of COSS companies - reaching meaningful revenue can take much longer, you need to be aware of your GTM, and it need to make sense - why is it that OSS will allow your product to grow.
I really love the resources from JJ at COSS capital.
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