Positioning is at the core of an open source strategy

I wrote about the Redis license change last week, and have been sort of mulling over my thoughts on the matter… and also how my thoughts on the matter relate to positioning, because that’s what I do.

The reason I specialize in positioning for open source companies is that positioning is even more critical and even more complex in an OSS company context than for a closed-source company. That’s because for me, the challenge of figuring out who should pay for a commercial product versus who should use the open source project is fundamentally a positioning problem. It requires understanding the differentiated value of the commercial product compared to the OSS, and it requires understanding the overlap and delta in target market between OSS and commercial product.

You are not just positioning your product in comparison to the ecosystem when you have an OSS company — you are positioning your OSS and your commercial product in relation to each other. Every time you have a sales call, you are going to need to articulate the difference between who should use the OSS and who should pay. Every product decision isn’t just about which feature to prioritize, but also whether to put it into the OSS or only the commercial product — and that decision should be based on the same understanding of the relationship between OSS and commercial product that the salespeople are basing their sales pitch on.

I also see the question of how the open source project contributes to the business as fundamentally a positioning problem. Does the OSS bring in new leads? Accelerate the feedback cycle? Get you a foothold in major enterprises? The way to answer those questions is, once again, to understand the relationship between the users and the target customers.

How is this related to license changes?

First of all, I am not categorically against license changes. I think for a company to say, “hey, we tried to position our project and product in relation to each other, and there was just too much overlap in target market and too little differentiated value unique to the commercial product, and thus we could not make it work. So we changed the license because we’ve got bills to pay,” is completely legitimate. Companies have to iterate — they iterate on their prices and on their pricing model; they pivot from making video games to making open source collaboration platforms.

On the other hand, I think a project that starts out open source should ideally stay open source. In order for that to happen, it’s really important for the company to absolutely understand the relationship between project and product and to have a clear vision for how the project contributes to the business’s bottom line.

But it’s also possible that a company can be absolutely clear on all of the above, and decide that the open source strategy just doesn’t work financially. Not all products are going to work with an open source approach… including not all core infrastructure products. It’s hard for me to blame them — if you try to be open source but can’t make it work financially, should we really throw shade when you prioritize paying your employees and building a sustainable business?

Anyway, if you’d like to talk more, in person, about financially sustainable open source businesses, you should join us at Open Source Founders Summit.