The Business of Open Source

Alexander Krüger is the Co-Founder and CEO of United Manufacturing Hub, an open-source company that develops software for the manufacturing industry. Throughout our conversation, Alexander describes the unusual path he took in going from a services-based consulting company to a product-led company. He also describes the opportunities and challenges of selling open-source software to an industry that has historically been slow to adopt new technology, as well as his choice to hone a go-to-market strategy before exploring fundraising. Highlights:I introduce Alexander, and he gives some background on his company United Manufacturing Hub (00:22)How Alexander decided to develop open-source software for manufacturers (01:39)Alexander describes the early days of launching United Manufacturing Hub and how he got his first customers (04:06)How long it took to go from a consulting firm to a product-based company (06:57)Why it’s important to Alexander that United Manufacturing Hub is an open-source company (08:20)Alexander describes the go-to-market strategy at United Manufacturing Hub and how it impacts their fundraising efforts  as well as their monetization model (11:06) Alexander describes an interesting mistake he made and what he learned from it (19:10)How different it is to sell open-source software in the manufacturing space versus other industries (21:31) The biggest challenges facing United Manufacturing Hub today (22:35)Alexander describes the pros and cons of going from a services company to a product company (25:44)Where people can go to learn more about United Manufacturing Hub and connect with Alexander (29:38)Links:AlexanderLinkedIn: https://www.linkedin.com/in/alexander-krueger/Twitter:Company: https://www.umh.app/

27 Sep 202330min

This week I’m chatting with Steven Renwick, CEO of Tilores. As you’ll hear in the episode, we connected when I mistook Tilores for an open-source company. Steven graciously agreed to come on the show to discuss why they decided against making the product open source — which is actually a conversation worth having, and one that open source founders should probably have more often. There are a few options for companies building SaaS tools to solve problems for engineers and enterprises, from open source and open core all the way to completely closed source. In this episode, Steven and I discuss some of these options and why his company decided that going closed source would be the option that provided them the greatest opportunity for growth. Steven himself thought they would start the company as an open-source company, but upon further examination, realized they weren’t leaning in that direction for the right reasons. Listen to hear the journey from the beginning of their search for funding, to heading into the end of their second year in business as a closed-source company.Highlights:I introduce Steven, tell the story of how we met, and he fills us in on the origin of Tilores. (0:32)Steven delves deeper into how Tilores started and why they decided against open source. (1:47)Steven and I discuss how companies sometimes get into open source before they fully understand all of the licensing options and how it will effect their business. (6:05)I point out that transparency is a commonly appreciated value in open source projects and Steven agrees that while it hasn’t been an issue so far, that is something that may push Tilores to open source in the future. (8:58)In seeking funding for Tilores, Steven found investors hesitant to buy into an open source company, so he explains why he thinks that is. (10:37)Steven and I discuss the many reasons going closed source keeps things simple. (14:27)Steven and I debate the idea that being open source implies a grander vision or hope of becoming the standard of service. (16:01)I mention that companies have gone from open source to closed source, which leads us to how open source can make it difficult for a company to become profitable. (19:43)We then dive into what the difference in vision between making boatloads of money, hoping to become the standard of service, and hoping to serve a particular niche. (21:06)If you don’t have a really good reason to go open source, maybe you shouldn’t. (24:15)Steven recalls a mistake in the early development of Tilores. (27:12)Steven shares his advice for folks making a product for engineers. (29:22)Steven reviews Tilores’s biggest challenge now. (30:58)Steven shares some final thoughts on open source. (34:07)Links:StevenLinkedIn: https://www.linkedin.com/in/stevenrenwick/Twitter: @Major_GroovesCompany: tilores.io/

20 Sep 202336min

Philippe Humeau is the CEO and Co-Founder of CrowdSec, an open-source security company with a very unique business model that doesn’t fit the usual open source patterns. Philippe talked about how to focus on providing a fair exchange of value between maintainers / open source companies and users, and how to monetize a project that is providing value for free.Philippe also talked about why he thinks open-source founders are under more pressure to get their business model right at the start, tips on making the right hiring decisions, and how to communicate with the community in an effective and transparent way. I also liked Philippe’s cynicism: why he views open source as primarily a pragmatic choice for his business, given the type of company he wanted to build. Philippe also shares the logic behind his uncommon view that only making certain features available to paying customers isn’t a truly open-source business strategy. Highlights:I introduce Philippe, who gives some background on his career journey and what he does at CrowdSec (00:22)Philippe explains why it seems that security companies are underrepresented in the open-source space (03:19)The most common mistake Philippe sees when people start an open-source business (05:03)Why Philippe believes that open-source companies are under more pressure to get their business model right the first time (09:26)How Philippe came up with Crowdsec’s unique business model (16:15)The pushback that Philippe got when he presented his business model initially (19:33)Why Philippe views open source as a means to an end, and how that has affected his choices at CrowdSec (25:10)The most interesting mistake Philippe has made since starting CrowdSec (27:28)Why Philippe believes open source business models are more promising than closed source (31:19)The advice that Philippe would give to an open source founder who is looking to build a successful company (34:11)Why Philippe feels that having certain features behind a paywall is not a truly open-source business model (35:53)Where you can learn more about Philippe and connect with CrowdSec (40:11)Links:PhilippeLinkedIn: https://www.linkedin.com/in/philippehumeau/Twitter: https://twitter.com/philippe_humeauCompany: https://www.crowdsec.net/

13 Sep 202340min

Samuel Stroschein is the CEO and Founder of inlang, an open-source company that is looking to not only make localization easy for developers, but also to help companies achieve revenue growth through localization. I was particularly excited to talk to Samuel because, back in my way back past, I was a translator, so I’m always interested in solutions that exist to facilitate translation; but also because localizing software is a good example of the intersection between business problems and technical problems. Inlang also strikes me as a company that could see its primary market as developers, or could see its market as CMOs — because of the way localization is both a technical and business problem. And Samuel is clear about this: He says “What we're basically saying is if you want to make more money, you've got to localize.”Lastly, another thing that stuck out to me about our conversation was that, as we talked about Inlang’s future monetization strategy, Samuel said he thinks that it will likely be around services — which I hadn’t heard from anyone before. His reason: That the software will ultimately become commoditized.  Listen in to learn why localization is such a challenge for developers, what impact it has on revenue growth, and how Samuel took inlang from an open-source project to an open-source company.Highlights:Samuel introduces himself, describes his background and explains what inlang is solving for (00:37)Why localization is such a challenge and how it led Samuel to create inlang (01:21)The circumstances that pushed Samuel to turn inlang into an open-source project (04:30)Why Samuel decided to take inlang from an open-source project to an open-source company (05:43)Samuel explains how localization is a growth opportunity, and how that impacts inlang’s market (09:00)The way Samuel and his team are thinking about monetizing inlang (13:22)Why being an open-source company is important to Samuel (15:15)The collaboration that open-source brings and why it’s so valuable to Samuel (19:00)How financial stability, problem-solving, and the nature of building software all contribute to the success of open source in tech (26:06)Samuel explains how he views mistakes as stepping stones to positive outcomes (28:41)The learnings that Samuel has gathered when hiring for inlang (30:13)How you can connect with Samuel and learn more about inlang (31:22)Links:SamuelLinkedIn: https://www.linkedin.com/in/samuelstroscheinTwitter: https://twitter.com/samuelstrosCompany: https://inlang.com/

6 Sep 202332min

Kevin Muller is the CEO and co-founder of Passbolt, a security-first, open-source password manager, and he joined me to talk about the risks of having too much time and money, the value of getting trashed on social media and why he values in-person interactions with the team. There were a lot of interesting pieces to pick apart from this episode. First of all, Kevin talked about the importance of not commercializing too early. I think he's the only founder I've ever heard say something along those lines, but he makes a good argument. (Also, Tim Chen and I talked about the timing of commercialization last week, my takeaway is that no one feels like they commercialized at precisely the right moment). Second, we had a good discussion about how the different priorities of European versus American investors can push companies to make different decisions. The subtext that we didn't address directly is make sure you are aware that your investors priorities are going to influence how your company evolves, choose your investors with that in mind. (and check out the episode with Markus Düttmann if you want more on the EU vs US investment environment for open source startups). Lastly, password managers have been in the news, and not in a good way — and how to best react to a super embarrassing situation for a competitor is not always obvious. So we talked about how Passbolt has tried to steer the conversation about password management in light of recent high-profile hacks in the ecosystem. Highlights:Kevin introduces himself and describes his work at Passbolt (00:26)How Kevin got the idea for Passbolt and the story of how he brought his idea to life (01:07)The mistakes that Kevin and his co-founders made when launching Passbolt (05:03)What happened when Kevin and his co-founders officially launched Passbolt in 2016 (08:12)How Kevin and his co-founders decided to move from a purely open-source product to a commercialized product (09:32)Why Passbolt is a hybrid company and the value Kevin sees in having employees spend time in the office (12:41)Kevin describes why it was so important for Passbolt to be an open-source company (15:58)Why Kevin feels it’s important not to commercialize an open-source product too quickly (19:07)The different priorities of European VCs versus U.S. VCs (21:58)Why honest feedback is so valuable and how Kevin and his team evaluated the feedback they got at the launch of Passbolt (24:26)Kevin’s reaction to data breaches that happen to other password management solutions (27:09)The biggest challenges that Kevin and the team at Passbolt are working on currently (31:09)Kevin’s advice to open-source founders (32:47)Links:LinkedIn: https://www.linkedin.com/in/kevinmuller80/LinkedIn: https://www.linkedin.com/company/passbolt/Twitter: https://twitter.com/passboltCompany: https://www.passbolt.com

30 Aug 202335min

Tim Chen is a Partner at Essence VC and also the Co-Host of the Open Source Startup Podcast. Through these channels, he has the opportunity to speak with a broad variety of open source startups. Throughout our conversation, we explore the patterns that Tim sees in the open source startup space. Tim talked about how too many founders take the decision to build an open source company too lightly and the path that he would take if he were to start a venture-backed open source startup tomorrow. We also discuss the different monetization models of open-source startups and the true business value of an open source project. Highlights:Tim introduces himself and describes his role at Essence VC as well as his work as Co-Host of the Open Source Startup Podcast (00:22)The common patterns that Tim sees having worked with so many open source startups (02:25)Tim describes the landscape of open source and how it varies from open source projects to venture-backed, open source companies (06:48)What path Tim would take if he were to start a venture-backed, open source startup tomorrow (09:31)How Tim views different monetization models and their potential profitability (17:29)Tim’s views on the pros and cons of an open-core model (20:34)The business value of an open source project according to Tim (24:47)How Tim’s evaluation and investing tactics have changed as he’s worked with more open source startups (31:58)Where listeners can find more information about Tim and learn more about his work (37:47)Links:TimLinkedIn: https://www.linkedin.com/in/timchenTwitter: https://twitter.com/tnachenCompany: https://www.essencevc.fund/

23 Aug 202338min

Franz Karlsberger is the CEO of Amazee.io, an open-source platform that seeks to make developers’ lives easier by abstracting their day-to-day workload. Throughout our conversation, we explore what it means to join an open-source start-up as an external CEO, and why Franz put so much emphasis on go-to-market strategy. Franz also walks through the importance of knowing what open-source business model your company will follow, and how to measure the success of an open-source project.Listen in as Franz shares some of his most interesting mistakes, what he’d do differently if he could start over, and why Franz feels open-source is more than just a type of software, it’s a company ethos that affects everything down to the team culture. Highlights:Franz introduces himself and his company Amazee.io, which is a ZeroOps application delivery platform (00:50)How Amazee.io went from being a point solution to a platform solution (06:20)Why Franz was brought in as an external CEO for Amazee.io to accelerate growth (10:03)How Franz adjusted to working at an open-source start-up and what that learning curve was like for him (11:47)The importance of open-source at Amazee.io and why it is baked into their core values and ethos as a company (15:30)How the go-to-market model differs for Amazee.io’s cloud offering versus their managed offering (17:51)Franz describes some of the most interesting mistakes he’s made and what he’s learned from them (23:25)Franz’s views on measuring the success of an open-source project (26:29)How listeners can connect with Franz and learn more about Amazee.io (32:37)Links:FranzLinkedIn: https://www.linkedin.com/in/franzkarlsberger/Twitter: https://twitter.com/fkarlsbergerCompany: https://www.amazee.io/

16 Aug 202333min

It’s kind of a cliche, Vlad A. Ionescu, founder and CEO of Earthly, says, but his first attempts to build something really awesome focused on amazing technology. With hindsight, he doesn’t think it’s so surprising that those efforts weren’t successful. It’s not that passion doesn’t matter, but rather that he had to learn to build things that inspired passion from both the market and the builders. We also talked about:Leaving a job, blowing through his savings, going back to a job before finding entrepreneurial successRealizing that if he wanted to have the kind of impact on the world that he wanted to, he had to figure out a way to make it as an entrepreneur, because the alternative was climbing the corporate ladder and that didn’t sound like funWhy it’s important to be brutally honest with yourself and what you suck atHow Vlad finally found success at Shift Left (now Quiet.ai)I also really liked his ideas about cutting corners — that startups will always have to cut some corners, it’s just up to you to decide which ones to cut. Highlights:Vlad recounts lessons learned from early entrepreneurial failures. (2:31)Taking failure personally to overcome weaknesses (5:19)Vlad explains what led to his first success with Shift Left (7:40)Vlad shares his journey from Shift Left to Earthly (13:40)Why open source? (17:03)How Vlad and his team built Earthly based on what he learned from building Shift Left (25:07)Breaking a product down to its components to find more value (31:38)The Startup Hierarchy of Needs (34:02)Links:VladLinkedInTwitterEarthlyQwiet.aiPersonal Site

9 Aug 202342min