Positioning for open source startups versus positioning for multi-product companies
Positioning guru April Dunford has a new podcast, which is good and I recommend (like her book, Obviously Awesome, which I also recommend). While I definitely incorporate April’s ideas in my work helping open source companies with positioning, I was reminded while listening to the podcast how different open source companies are. Particularly when listening to this episode:
April talks about how IBM’s goal was to sell lots of products to the same account. And while Salesforce has a different positioning strategy and a different sales strategy, their ultimate goal is the same: Sell multiple products to the same account.
I’ve often said that open source companies need to think of themselves as companies with multiple product lines: Each commercial product is a product line (let’s take the classic, you have an on-prem enterprise distribution and a cloud-hosted SaaS version). Then you have your open source project. This makes you like a company with three products, and each of those three projects needs to be positioned both individually and in relation to the others. And you also need an umbrella positioning for the company. So far, very similar to multi-product companies.
But here’s the difference: Your goal, as an open source company, is not to have one account buying both the on-prem and the SaaS product. That would make absolutely no sense. This means:
You need to be very clear about what characteristics make someone a good fit for each of your products (when I say product here, I’m considering your open source project as a product). Help your customers figure it out, so they can use their mental energy to decide to make a purchase, not on which option they want to purchase.
Your umbrella positioning is really important. You’re not really selling your on-prem solution or your SaaS solution or your OSS, you’re first selling them on the common solution all of them provide, then helping them figure out which option best fits their needs.
In other words, positioning strategy (and sales / marketing strategy) for open source startups is just different from either a single-product or a multi-product proprietary company. However, I want to point out one thing that is absolutely applicable from the video, that I see a lot of open source companies get wrong: You need all the products to be obviously connect to each other. If your open source project has one name and your company/commercial product has another, you’re just going to confuse people.
Do you know an open source startup founder struggling with positioning and/or revenue strategy? I’d love an intro.