I’m on this journey to build a profitable open-source project

In the next few months I’m going to experiment with building a profitable open-source (OSS) project. In my career I’ve always worked as a developer advocate and helping builders navigate how to optimize their productivity with useful developer tools. I also deeply align with the vision of democratizing access to toolings to provide optionality for builders.

I’ve seen role models in OSS and am on a journey to deconstruct their business models and see how this can be applied to open-source projects. For a few years I’ve been actively contributing to community-owned projects and toolings. If we take a look at the industry leaders:

Red Hat:

• owned by IBM
• Est. Revenue in fiscal year 2019 (before acquired by IBM) ~ $3.4B in revenue
• business model: enterprise solutions on LinuxOS, apps and services on OSS

MongoDB (Database):

• OSS NoSQL database
• business model: commercial licenses, enterprise support, and cloud-based services

Docker (Containerization):

• tool to build, package, and distribute applications using containers
• business model: commercial offerings (Docker Enterprise) for enterprise-grade container management

My experience having been involved in Yearn, token swaps (ie SushiSwap) and Gitcoin:

• business model: transaction fees (requires volume and velocity), TVL portfolio growth
• most of these OSS projects are funded by community money or Foundation grants

The next step is exploring productizing AI-enabled products that improves the pain-points for devs or technical consumers. I’ve worked at companies where AI-assisted dev tools were greatly frowned upon. The 3 leading models for me are subscription plans, enterprise edition and building out a marketplace. The marketplace will be the long-term vision as the cold start problem then really requires momentum to overcome.

Revenue models for open-source:

• commercial licenses
• subscription plans ←
• enterprise edition ←
• support and maintenance
• consulting and professional services
• Cloud hosting
• marketplace ←
• data services

If you have any suggestions or want to share your own journey building revenue-generating OSS, would love to start a conversation. My next steps are iterating on product and adoption, based on user-feedback on nascent AI developer experiences.