Should your closed source company go open source?

I’ve been talking to a lot of companies on this exact topic recently, and thought I’d write about it more explicitly. The focus in open source startupland is often on companies that start as an open source project and then add a commercial product, but there are also companies that start with a commercial product and then open source a big chunk of it. So how do you decide if that’s a good plan for you? I wanted to address some of the issues in a series of blog posts.

Point 1: Going open source is not all or nothing

This is important to remember, because when you spin out an open source project from your commercial project, you don’t have to include everything in the open source project.

A common concern companies have in thinking about this is that they’ll lose their competitive moat because there’s one critical feature that they figured out how to deliver and it’s their key differentiator. If the idea of open sourcing one particular feature makes you super anxious… hold it back for the commercial version.

If your goal is to become an open source company and follow an open source strategy, you do have to create an open source project that is valuable. If it’s just an SDK, or an extension, or something that doesn’t provide value on its own, you’re not playing the open source startup game. But you can easily create a valuable open source project that doesn’t give away 100% of your secret sauce.

On the other hand, your open source project does have to be differentiated from other open source projects. If the project provides exactly the same value and serves exactly the same market as another project, you’re going to struggle.

The theory behind building an open source company is simple: Your open source project has to deliver value, and your commercial offering has to deliver additional value (that people will pay for). Not only is it ok to hold some things back for the commercial offering, but you must hold some value back.

I’ll write more on the topic tomorrow. And if you’re a company in the above situation, reach out: maybe I can help.