The Business of Open Source

In today’s episode of The Business of Open Source, I spoke with Matt Watson, CEO of Fullscale, about a number of topics related to product development and how AI is changing that. 

Let’s start with a question: What is the difference between a software engineer and a software developer? Matt thinks there is a key difference: software engineers write code, and software developers figure out how to solve customer problems with software. What do you think is more valuable in a world where AI agents can write the code for you? 

We talked about the importance of creating a well-lit path for users to use your product for their specific use case — and removing everything that is confusing or unnecessary for their use case. 

Somebody has to have the vision for what the project is trying to do. This was always the case for open source projects, but it continues to be the case now, with AI agents able to demolish a product feature backlog in an afternoon. Who is deciding whether or not it is a good idea to build something just because a customer or a sales rep suggested it? How to do you make sure you stay on track? 

We talked about how your biggest competitor is customers not just not buying something from you, but either building something internally using an AI agent, or just doing nothing. This is something you need to consider when you are selling and marketing your product — your biggest competitor. 

We also talked about the challenge selling to developers, how AI accelerates the winner-take-all dynamics in many markets, and you need AI to recommend your tools or you’ll get lost. 
Last piece of advice: The goal isn't to be the best, it's to be the best known for what you do. Think about that next to you're wondering whether or not you should invest in marketing. 

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Matt says we need more product people. If you need help figuring out what the master vision of your company is and how to translate that master vision into a product roadmap and message overhaul that will get your ecosystem fired up, you should reach out… because that is what I do. My clients see increased pipeline growth, better conversions throughout their funnel and team alignment.

This week on The Business of Open Source, I talk with Julien Verlaguet, the CEO of Skiplabs. Julien is a programming language guy, and we talked about what it means to maintain an open source programming language. 

We talked about what it means to monetize a a programming language… or, as Julien says, you do not. So why does maintaining SKIP pay off for the team at Skiplabs? And how exactly do they make money? 

Skiplabs builds products using SKIP, and they focus on building products that can and do take full advantage of the programming language. But ultimately, do customers care that the products are built by the language maintainers? Probably not. 

“If your open source project can’t be directly monetized with a SaaS,” Julien said. “You have to get a bit more creative.” 

Indeed, how do you get creative? I have to agree with Julien, that it really depends on what you’re working on. When you think about how to monetize, it’s important to think about what exactly your customers want. 

He talked about the importance of doing interviews with your target market. In fact, he recommends doing two or three interviews with people in your target market, and in the first interview you don’t even talk about your product ideas, but rather listen to them talk about their problems and how they solve them or would like to solve them. 

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By the way, did you know that one of the services I offer is interviewing your customers? Julien talks about how people can overstate how good your product is during interviews… this is true, and having an outside person do the interviews is one of the ways around this. If you’d like someone to interview people in your target market, including users and customers, and to help you use that information to get to product-market fit faster, reach out.

In this episode of The Business of Open Source, I talked with Joshua Drake, president and CTO of Command Prompt, about business management, bootstrapping versus taking investment, and AI, open source and open source businesses. 

This episode is a real no-bullshit take on how human psychology influences how leaders behave, how people identify with open source ecosystems and specific technology, and how people in open source should focus more on the outcomes that they want to achieve for clients or for their company rather than making their identity about being an open source developer or a postgres developer.

He says everyone — not just entrepreneurs, but technologists in open source communities in general — need to focus on outcomes and build their identities around those outcomes, rather than around a specific technology. This goes for people whose identities are completely connected to open source. What’s important, that the license is OSI-approved, or that you are a person who builds software collaboratively? What’s important, is it the lines of code or is it the people in the community? 

This episode has a lot of gems; it will be useful for seasoned entrepreneurs as well as aspiring ones. 

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If you’re listening to this and you want to go deeper on the human side of building open source companies, check out Open Source Founders Summit, a conference dedicated to building open source companies. 

As a consultant, I’m also focused on outcomes for clients rather than hours in a chair. What are the outcomes I get? A streamlined product roadmap that’s focused on what matters to your ideal customers, higher conversion rates from your sales conversations and shorter sales cycles. Find out more about working with me here.

This week on The Business of Open Source, I chatted with Stephen Goldberg, co-founder of Harper, about the process of taking Harper from a closed-source software company to a open source company. I already talked to Ethan Arrowood about the transition to open source, but Stephen was able to give a founders perspective about why Harper wanted to move to open source, why it wasn’t launched as an open source company from the very beginning and why they choose the moment in question to go open source. 

He says that 80 to 90% of the effort around taking a big piece of Harper open source was around communication, both external and internal. It’s not that difficult to change an license or to push something onto GitHub, but a successful open source launch is about so much more than that. 

Here’s what we talked about: 

The board pushed back a lot, mostly because they felt like going open source was going to complicate things for the company and they were worried that the risks outweighed the benefits
Stephen was convinced that even as a closed-source company, their customers weren’t paying for their code, but rather for their services. Harper also sells to large enterprises, and he was convinced this type of customer doesn’t want to cowboy their tech stack. 
There has been a massive positive impact on the company’s sales cycles. The sales cycles are shorter and require less effort from Harper’s team; it’s also psychologically easier when someone asks him to prove that the product does what he promises — he just has to ask tell them to verify for themselves. 
They haven’t gotten many outside contributions and that was never the goal, but they do get bug reports. This has significantly reduced their costs of support, because the bug reports are often very detailed and identify where in the code there is a problem. Not only that: customers are able to figure out when the “bug” is actually a problem on their side, and that reduces support volume considerably. 
AI coding agents have dramatically increased the value of an open source project, because when the agent is able to see the software’s code directly, it’s able to build on top of it and integrate it into the system but more effectively than if it were working with docs. This was a huge win that they didn’t expect. 

The bottom line: If you understand your business model, going open source has a lot of upsides and the risks are not as scary as you think. However, getting advice along the way is critical, and you should work with people who understand open source companies if you’re going open source.
If you're considering going from closed to open source and you'd like help on the product strategy and the communication part... that's what I do. You might consider working with me.

Today on The Business of Open Source I spoke with Sam Alba, co-founder of Mendral, formerly of Dagger, and the first hire at Docker. We talked a lot about about how AI is changing the developer tools marketplace. If AI is changing the way software is developed, what does that mean for the companies that previously had made tools for developers? 

We talked a lot about hype; what is hype and what is not hype? How many people are actually using AI and getting value from it. 

It’s hard to differentiate between the hype and real value, Alba says, but also that while it does seem like AI is a bubble, that doesn’t mean there’s nothing real there. It’s just hard to see where the difference is now, but after the bubble bursts there will still be plenty of changes that stick around. 

When it comes to building an open source company — which Mendral is not, by the way, Alba talks about how you have to get product-market fit twice. But for AI is absolutely changing things, and there have been companies that are abandoning open source because the game is changing so much and it is harder to make it work. 

Listen to the entire podcast! And if you want someone to work with on establishing your message and then sharing that message in as many places as possible, get in touch.