The Business of Open Source

In this episode of the Open Source Founders Podcast, I talked with Frank Karlitschek, CEO and founder of Nextcloud. Frank is going to be talking specifically about lead generation at Open Source Founders Summit, but in this episode we took a slightly wider view and talked about go to market, for open source companies in general and specifically for Frank’s experience at Nextcloud. A couple other things to pull out as takeaways. First of all, Frank talks about how he originally planned to target big companies who wanted to keep their data private — but as it turned out, most big companies don’t really care deeply about keeping their data private. On the other hand, the public sector and universities really do care, and those have ended up being a huge part of Nextcloud’s customers. Frank also talked about the rather obvious differences in needs between home users and big organizations. Nextcloud has some customers with millions of users — their needs are different from a home user. And as far as home users go, Frank says these users are obviously never going to pay Nextcloud anything. On the other hand, they have built mechanisms into the software to nudge open source instances with over 1,000 users to get in touch to talk about a commercial relationship. He also talked specifically about the importance of really talking with your customers and your users — and incorporating their feedback into your product roadmap. For open source companies, you have so much more information and feedback than proprietary companies, and you should take advantage of that to inform your go to market strategy. We also talked about how the millions of home users who will never pay Nextcloud are still extremely valuable to the company — and why Frank think it’s really wrong to think of pure open source users as just leads to be converted. And much, much more. If you’re the founder or leader at an open source company, and you want to be a part of more discussions like this, join us at Open Source Founders Summit May 27th and 28th in Paris!

22 Feb 202430min

This week on The Business of Open Source, I spoke with Percona CEO Ann Schlemmer. This episode was recorded on site at State of Open Con in London, outside in a van! There’s a ton of great info in this episode, too. First of all, Ann talked about being a ‘suit’ in a geek’s world and her career trajectory that led her to lead Percona. She also set the stage around the constraints that Percona has chosen for itself: To be completely open source and only sell services, and to be completely bootstrapped. And what the ramifications of those decisions are for the business. Here’s some concrete takeaways:The key to thinking about managing the tension between creating a project that’s high quality and still being able to sell services on top of that is to ensure that the services really create valueThere’s a difference in profile between happy anonymous users and happy customers — often customers are operating at scale or are working in companies that simply always have to have support for critical software. But just as importantly, customers are often not database experts —they just need a database that works, and can turn to Percona to be their database experts. Founders are often more emotionally attached to aspects of the company that a non-founder CEOs like Ann can sometimes be more analytical about what’s working and what isn’tCollaboration isn’t automatic, and how to make it actually happenHow Ann decides what problems to collaborate with others on, what they don’t collaborate on and when in the project / feature lifecycle they look for collaborationWe also had a bit of a random conversation about controlling status in relationships — the book we talked is Impro: Improvisation and the Theatre. And talked about how founders who are ready to step down as CEO can find a replacement and manage the transition. Ann’s links:LinkedInPercona

21 Feb 202430min

In this episode of The Business of Open Source, I talked with four-time entrepreneur Mike Schwartz, CEO and founder of Gluu as well as the host of Open Source Underdogs podcast, about his long career in entrepreneurship. Here’s some particularly interesting things to take out of this episode:“Beware an entrepreneur’s second company.” — Mike says his second company was a disaster because he tried to apply the lessons from the first company in the second, and often those lessons aren’t right for the new businessGoing all in on being a product company — the toughest year in Gluu’s history was when they decided to stop consulting and make it or break it as a product companyWhy it’s a good idea to look at the market analytically and start a company in a market you’ll be able to compete in without a huge number of featuresWhy Gluu actually has more features in the open source version than the enterprise edition — because the open source distribution gets features that are in beta whereas the enterprise customers need a product that is 100% fully baked. Why Mike doesn’t believe in making the enterprise product more ‘scaleable’ — the open source project should be just as scaleable as the enterprise productThis episode was recorded on site at State of Open Con 24, outside in a media van!

14 Feb 202434min

As part of the preparation for Open Source Founders Summit, I’m interviewing both our speakers and our attendees for a special podcast that’s hyper focused on one thing. In this episode I spoke with Peter Zaitsev, founder of Percona, about sales. We talked about the specifics of sales as a bootstrapped company — which means sales are exceptionally critical from the beginning, and how sales changed as the company moved from a consulting model to a support model on the open source software that Percona creates. Also, this episode was recorded on site at OpenUK’s State of Open Con! Here’s the concrete takeaways from this episode: Even before starting the company, Peter had built up a personal brand as a MySql expert — this is what made it possible for him to get consulting gigs pretty much immediatelyPeter’s personal brand wasn’t just around MySql in general, but was very specifically focused on MySql performance optimizationHow a growing team meant that the sales process had to get much more disciplined — and deal sizes had to get bigger so that it’s worth the sales team’s time How to align sales incentives with your business goals — how it’s important to adjust sales quotas and incentives so that sales people don’t oversell, which can hurt your reputation long-term, and don’t sell long-term agreements at too much of a discount. Why it’s important to separate out your revenue that comes from new customers and your revenue that comes from customer renewals, and how to do so in the organizationIf you want more opportunities to go in-depth on sales for open source companies — and to discuss sales and other aspects of business development with other founders, join us May 27th and 28th in Paris at Open Source Founders Summit.

12 Feb 202433min

Garima Kapoor, COO and co-founder of MinIO, joins me to share her journey from investor and advisor to co-founder of MinIO and the wealth of knowledge she’s amassed along the way. In this episode, Garima explains how her experience in finance and belief in the power of open source helped MinIO to break into the data storage market. She also reviews the challenges she faced as a first-time founder and what others can learn from her mistakes and take away from some of their own. Since Garima started her journey with MinIO as CFO, she outlines that role for me and explains how she thinks a CFO should operate in an open source company. In reviewing mistakes she’s seen from other founders, Garima states some principles that create the “foundation for any open source business.”  - “You should always be very honest to your community. You should always be very transparent to the community”Highlights:Garima introduces herself and explains why she and her co-founders started MinIO (1:31)Garima describes how the MinIO founders honed in on a problem they wanted to solve (3:55)How the MinIO founders used open source crack the market (6:37)What triggers a user to purchase a commercial license for the product (10:33)Garima explains why she and her cofounders were set on their open source strategy from day one (11:35)Garima explores the differences between being an investor and advisor for other companies and starting her own. (13:25)Garima shares go-to-market advice for other founders (15:21)Garima outlines her strategy for building on small successes (18:38)Garima explains why she started as CFO for MinIO and breaks down the role a CFO can play in a new company (21:46)Why Garima thinks a CFO’s role remains the same in an open source company as compared to a proprietary company (27:17)How to avoid competing with your open source product when you also have a commercial offering (34:06)Links:GarimaLinkedIn: https://www.linkedin.com/in/garimakap/Twitter: https://twitter.com/garimakapCompany: min.io

7 Feb 202439min

Today I’m joined by Federico Wengi, who is a Partner at SquareOne VC. In this conversation, Federico sheds light on the conversations he’s had with many companies who consider making the pivot from a closed-source business strategy to an open-source strategy. Federico explains why it’s so uncommon for businesses to make that pivot, and lays out the challenges businesses face when they consider taking on such a change. Federico also gives a great example of a company that did successfully complete the pivot to open source, and the choices they made that led to their success. Federico and I discuss why this is one pivot you can’t take back, and also why it won’t solve all your problems. Despite all that, Federico shares his optimism for the value of open source and the importance of at least considering this strategy when you need to make a change. Highlights:Intro (00:00)I introduce Federico, who is a Partner at SquareOne (00:59)Federico describes his role at SquareOne and the areas of investment they focus on (01:28)What Federico typically sees when companies move from closed source to open source (04:42)How important conversations come up about business strategy and open source versus closed source (07:40)Why many companies end up not pursuing an open-source strategy (11:17)Federico tells the story of a company he worked with that made the leap from closed source to open source (15:03)The most critical things businesses have to do in order to utilize an open-source strategy (16:23)What decisions led to success in the company Federico helped shift from closed source to open source (18:09)The psychological challenges leaders face when considering making a pivot to open source (23:54)Federico shares the advice he would give to a founder who’s considering an open-source strategy (26:40)How you can connect with Federico (31:40)Links:FedericoLinkedIn: https://www.linkedin.com/in/federicowengi/Twitter: https://twitter.com/federicowengiCompany: https://squareone.vc/

31 Jan 202432min

How can we get founders of open source companies together to share ideas, share strategies and tactics and build a community not just of open source practitioners, but of open source business owners? We create a conference/summit/retreat to bring them together to learn and to work on their businesses together. At least that is the bet that Remy Bertot and I are makingIn this episode, I talked with Remy about Open Source Founders Summit, a summit they're organizing on May 27th and 28th, 2024 in Paris, France — we each shared our motivations for organizing the event, and talked about why we think it's important for people to come together in person. You should listen to the episode, but if you don't want to, the bottom line is that we think there needs to be a space for all open source founders (not just the DevTools, not just the VC-backed) can come together to share business ideas — a place where business, not tech, is the focus. Listen to the episode, and join us in May!

29 Jan 202412min

Ben Haynes, the Founder and CEO of Directus, created an open-source project while working at his own agency in 2004. In this episode, we explore how he went from maintaining an open-source project to building an open-source company with a solid product-led growth strategy, and how he’s achieved success in the enterprise segment even as a small organization. Ben expands on how he feels open-source is the best way to start a business, and also reveals why timing and transparency can be both your greatest assets and the areas where you have the most regrets if not done right. We also discuss the value of optimizing you product and business for working with government agencies as an open-source company. Highlights:Intro (00:00)I introduce Ben Haynes, who is the CEO and Founder of Directus (00:59)How the Directus platform has evolved over time (02:33)Ben tells the story of what happened after the initial release of the Directus project in 2004 (06:06)The strategy Directus has used to land enterprise customers as a small company (10:20)Ben and I discuss the importance of early-stage open-source companies optimizing to work with government agencies (13:59)Ben describes the SaaS business model that he chose for Directus (16:38)Why Ben feels that open-source is the best strategy for starting a company (25:19)How Ben landed on a product-led growth strategy for Directus (27:39)What Ben learned about mistakes he made in timing his product and company (31:23)The advice Ben would give to another open-source founder (33:52)How listeners can learn more about Directus and connect with Ben (39:32)Links:BenLinkedIn: https://www.linkedin.com/in/contactbenhaynes/Twitter: https://twitter.com/benhaynesCompany: https://directus.io/

24 Jan 202440min