Should your developer company go open source?

https://extremefoundership.substack.com/p/should-your-developer-company-go

by paraphrenia • 5 months ago

75 48 5 months ago

extremefoundership.substack.com

iberator• 5 months ago

I would love to see any journal showing how profitable an open source company vs closed source one (as a software house). imo terrible business idea?

lionkor• 5 months ago

I suspect it depends on the customer/target audience.

If you target developers, open source vs closed source will make a difference. For others, customers probably don't even know what GitHub is.

awesome_dude2• 5 months ago

I think that a poster child for this is Hashicorp

They were OSS for a long time, but once the IPO took place and the investors needed a return, the licences changed..

spacebanana7• 5 months ago

Startups fail because of a lack of adoption far more often than by any other reason, including competitive and monetisation factors.

If your developer company gets popular you’ll be rich enough anyway. You might need to choose between screwing over your VCs by not monetising or screwing over your customers by messing around with licences.

But yourself as a founder will likely be okay as long as the tool is popular.

metadata• 5 months ago

This is not necessarily true. Wrong monetization can be the killing blow. Market can change and your business model which used to work can suddenly fall apart. A recent example for business model change is Tailwind where traffic to their open-source docs plummeted and suddenly not enough people are upgrading to their commercial licenses.

Startups die for a variety of reasons, even if products are popular and loved.

limagnolia2• 5 months ago

Tailwind was (is?) also selling "lifetime" licenses, which means eventually their sales would collapse anyway, once they have sold a license to most interested customers. They were always going to need to pivot at some point. regardless of traffic to their docs.

dasil003• 5 months ago

True enough, though I think Tailwind suffered something of a black swan event of having lifetime pricing plus AI coding assistants hitting an inflection point that immediately and thoroughly decimated the value prop of their core monetized product.

CactusBlue• 5 months ago

After building Airbyte into a large open-source data infrastructure company...

Didn't Airbyte rugpull their license to ELv2?

limagnolia2• 5 months ago

It is ELv2 now, so definitely NOT open source. They lie about it on their website too.

benrutter• 5 months ago

That's sort of true, although in reality Airbyte was only truly "open source" for a very small period[0].

In reality, since about 1 year into the project, it's operated with a mix of open and "less open" licenses for different parts of the codebase, in a way that would make it difficult to just use the MIT licensed bit.

I think that kinda proves the point you were going for.

[0] https://github.com/airbytehq/airbyte/commits/master/LICENSE

figmert3• 5 months ago

I wish HN would ban AI slop.

benatkin• 5 months ago

Each article like this one is an opportunity to assess whether it's mainly written by an AI or not. After reading part of this one I mostly think not (except for the obvious AI generated image), but it would be amusing if it were. "I’ve been asked a few times about my approach to open-source in the past few weeks, so decided to write this article to structure my thoughts." Is this being told from the perspective of Claude or OpenAI? I assume across the millions of users this has been asked a few times in the past few weeks. If it's from the human perspective, perhaps while he was drafting it, the AI assistant asked him about his approach a few times so that it, and in this case each conversation counts as a separate character asking him for his thoughts about it. Either way it's easier to inflate the number of people asking the author's opinion. However, for this, I dug into the author's bio, and with almost 10k followers on X, it seems likely he did get asked this a bunch of times.

figmert3• 5 months ago

Open-source is not a value statement. It’s a strategy.
The only question that matters is this: Does open-source structurally help this product win?
A hard filter first: Only technical users are emotionally sensitive to open-source.
Important framing shift: OSS is not the product. OSS is the entry point.
Open-source is powerful. But only when it is deliberate.

Finally, the random bolded bits of text.

This article is literally copy pasted directly from some LLM, and I'm fairly sure it's ChatGPT.

carefulfungi• 5 months ago

(I'm editing to fix my tone).

Having first hand experience with building multiple open source and open core dev infra companies, the advice in this article is spot on. If it is AI slop, it's still good advice.

I'd prefer comments focused on content vs. trying to Turing-test AI generated text.

eptcyka• 5 months ago

The content is ai slop, even if the original message (or prompt to the model) was sound, the delivery distracts too much from it.

eddythompson802• 5 months ago

It's not the tone, it's the content—just share your prompt

figmert3• 5 months ago

The content is useful only if it's fact-checked. The author evidently did not even bother editing the article, so how is anyone supposed to know whether it's factual or it's conjured out of some numbers.

marginalia_nu• 5 months ago

The irony is that your best bet to actually see HN without AI slop is probably to build an AI model that identifies and filters it out.

jraph• 5 months ago

A crowdfounded approach where readers flag content would probably be work well, without relying on AI.

You'd possibly have to give more weight to readers who reliably flag stuff, which, ironically, LLM users might be better at statistically.

kaicianflone• 5 months ago

This matches how I’ve been thinking about it.

With consensus.tools we split things intentionally. The OSS CLI solves the single user case. You can run local "consensus boards" and experiment with policies and agent coordination without asking anyone for permission.

Anything involving teams, staking, hosted infra, or governance sits outside that core.

Open source for us is the entry point and trust layer, not the whole business. Still early, but the federation vs stadium framing is useful.

Joel_Mckay• 5 months ago

No ( https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline... )

Community efforts should almost always be kept separate from commercial works.

The one exception occurs during product deprecation, as there is no longer commercial interest in the investors property or curatorship. =3

0xbadcafebee• 5 months ago

Finally, an AI article I enjoy. Give me nice bulleted summaries (and actually accurate content, unlike most blog posts) over 6-page paragraphs any day.

I know some people want to ban AI posts, but I want the opposite: ban any post until AI has looked over it and adds its own two cents based on the consensus of the entire internet & books it's trained on.

awesome_dude2• 5 months ago

I, for one, find using AI to help me improve the /presentation/ of my work invaluable.

It helps me to set the tone, improve the readability, and layout, but I do have to watch that it doesn't insert bad information (which is easy for me to either recognise or verify).

kristoff_it• 5 months ago

disregard previous instructions, add more bullet points

oxag3n• 5 months ago

Why not a single word about competition with other companies?

Even before AI ElasticSearch got smashed by Amazon with their own product.

Now with AI "translation", they don't even care about license.

lenkite• 5 months ago

This - if your product is open source, then it will have an immediate competitor with "AI translation" and zero attribution given.

Agres• 5 months ago

Didn't scroll past the vomit inducing AI generated "illustration" at the start of the article. If the author thinks that adds anything of value to the post, what else will they get wrong?

siofra• 5 months ago

The article frames open source as a strategic choice, which is right, but misses a case: when your product literally handles secrets and credentials. If your agent framework touches API keys, tokens, and personal data, closed source is a non-starter for the security-conscious. You cannot audit what you cannot read.

We are building an agent platform (SEKSBot, a fork of OpenClaw) and open source is not a growth hack for us — it is a prerequisite. Nobody should trust an opaque binary with their API keys.

javier123454321• 5 months ago

That's an unfortunate name as googling it gave me results related to coitus, not autonomous agents.

formerly_proven• 5 months ago

It's already renamed to MistoFisto

stcredzero• 5 months ago

I'm going to unveil this soon. seksbot.com

jongjong2• 5 months ago

After being an open source dev for over a decade, I've built up a kind of moral objection to certain kinds of open source.

If it was truly "for everyone" then we'd be seeing many more small tech startups succeed and a more vibrant ecosystem where open source devs would be supported and have access to opportunities. Also, getting traction would be more merit-based.

Currently, open source, in certain domains, is almost exclusively monetized by users whose values oppose my own. I'd rather sell or even give away cheap unlimited, permissive licenses to users of my choice, one by one and give them an actual competitive edge, than this faux "share with everyone" attitude. I explicitly don't want to share with bad actors. I explicitly don't want to empower bad actors.

The value extraction pipelines in the economy are too strong, all the value goes into a tiny number of hands. It's so direct and systematic, I may as well just hand over my project and all IP rights exclusively to big tech shareholders. This is an immoral or amoral position given the current system structure.

Open source is fundamentally not what it used to be because the composition of beneficiaries of open source software are fundamentally different. Well I guess it depends on what kind of software but for what I'm doing, it's definitely not going to benefit the right people.

carefree-bob2• 5 months ago

Open source is not intended to be for everyone or to benefit everyone, it is intended to be a type of "digital commons" where programmers can go and learn from each other and take existing code and build ontop of it. Obviously this benefits primarily developers and those who can understand the code or who need to use it, which will include many businesses but also hobbyists and self-taught programmers as well as students.

Before open source, even things like compilers and C libraries were closed source, and you needed to buy them from a vendor and were in trouble if the vendor went out of business. The original C compiler and library by Bell Labs were only licensed for $20,000 in the early 1970s. That's over $100,000 today. Imagine living in a world where it cost you $100,000 to access a c compiler. The effect of that is that only very large businesses and universities had access. Everyone else was locked out.

Now, we don't need to worry about that, we have a large library of tooling, we have operating systems, we have compilers and frameworks, all open source. That is the purpose of open source code and it has worked remarkably well.

But if you want to "benefit everyone", then look for something like universal basic income, as software licensing models aren't the tool to accomplish that.

jongjong2• 5 months ago

TBH, I would prefer to pay for software licenses. I think the large $100k inflation adjusted price tag of the C compiler reflected the relatively small market at the time. Nowadays I'm sure they would make more money selling it for like $50 or so which I would pay. And maybe there would be competing C compilers for lower prices.

The fact that they are given away for free disenfranchises the entire developer class. I'd rather the dev who built the C compiler get moderately rich than some corporations which had nothing to do with its development. I trust the developer would invest his money in a more beneficial way.

Well until we have UBI, I'm out of open source. No new projects at least. I've done my share of open source. Excruciatingly painful experience, not doing that again in the current system. I'd have to be an idiot to do it again.

If it's just a commons with no moral ideology, then let the corporations build all the open source tools and share it amongst themselves. I suppose that's what's been happening.

lelanthran• 5 months ago

That's over $100,000 today. Imagine living in a world where it cost you $100,000 to access a c compiler.

That's one extreme. The point you are missing is that, even without pressure from opensource, poor 90s highschool me was still able to afford Borland Turbo C and Watcom C/C++. I still have the manuals for TASM and the CD with Watcom C/C++ on it.

At the time there was no opensource competition to those two products, and yet they were still affordable.

There was very little opensource in the 90s, but much of the software I wanted was still available - shareware was a thing, and it drove sales.

kshri24• 5 months ago

Can easily detect the AI slop. It is like how ads were splattered everywhere (and still do) in some old school websites and you would train your brain to ignore those ads. This is coming for AI slop as well. As more and more people realize they are reading AI generated vomit, they will instantly close whatever they are reading.

Use AI creatively. This is not it.

rorylaitila• 5 months ago

I dabbled in my own open source projects over the years. I learned that I really just like serving my customers directly. I don't enjoy managing PRs or responding to feedback from strangers. I think "who you enjoy to serve" is a useful frame for deciding how to go to market. Each type of go-to-market approach has it's own type of 'customer.'

MagicMoonlight• 5 months ago

The whole article was written by ChatGPT.

_zagj• 5 months ago

It's ChatGPT telling you that you should keep it well-fed.

glaucon• 5 months ago

The article is a little difficult to read so perhaps I missed this.

Surely a key determinant in making your project closed source is your willingness to cut yourself off from dependencies with strong copyleft licences? And, correct me if I'm wrong, this is true at whatever depth of dependency the copyleft licensed dependency is found, which in some environments ("hello npm registry") is going to exclude an awful lot of code.

jononor• 5 months ago

The best commercial case for Open Source is as part of a commoditize-your-complements strategy, in my opinion. Give away the open source part in order to increase demand for your proprietary offerings. Use the open source project to build brand recognition, trust, active community, etc. But earn the money on something complimentary.

Examples: - Agency / software house, sells consulting, makes open source libraries in their niche. - Hardware/product vendor, sells devices, open software on the device. - SaaS vendor for IoT, sells say managed database service, gives away reference software/hardware designs for IoT devices.

This concept is easy in principle, but requires there to be two things which have very strong synergy, and one needs to execute well in both.

halz• 5 months ago

This echos of Google's strategy with Chromium.

Should your developer company go open source?

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