Building a Business on Open Source

Building a Business on Open Source

What is open source software?

For the sake of unambiguity: Open source software (OSS) primarily means that the source code of the software is accessible and users are free to use the code as they please. Depending on the license, you might be expected to attribute the source code to the authors and / or commit code enhancements back. Note: It’s “free” as in “freedom” not as in “free beer”. 

opensourceneedsmorebalance

Open Source and Commercialisation?

The origins of open source did not entail commercialization thoughts. However, in the last 20 years a lot of things have changed, and open source projects have seen commercial successes – though not always by the creators and maintainers… Open source is in its core tied to a philosophy and value set for many people. Simplified: For the developer community by and large open source is considered to be “good”  versus proprietory source code is considered to be “evil”.

In any case, open source is one way to keep up an active vibrant developer ecosystem that empowers individual developers as well as startups and smaller players. Open Source is actually one piece of the IT ecosystem that helps balance the Big Tech and drive overall innovation. However, we also believe the open source ecosystem needs more balance to be successful longterm. If widely used open source repos cannot even sustain the half or full developer resource needed to maintain them, then there might well be a flaw in the system. If startups cannot build a business around their widely used open source code to sustain it longterm, it is to the disadvantage of the community, especially for the individual developers and SMEs. And likely, the learning at some point will be to keep the source closed instead.

In the following we will share, why we believe now is the unique opportunity to add fairness and balance for the value creators to the open source ecosystem to keep that ecosystem thriving and successful longterm.

What do we mean with “building a business on open source”?

In many talks with many people, we found there’s at least two diametric conceptions of building a business on open source:

1) using open source software for free and building something around it to earn money
2) developing a solution and open sourcing it or parts of it as part of the business model

In this article, we mean the latter and it inherently entails contributing a useful part of a solution to open source. For some open source enthusiasts a company needs to open source everything to be an open source company, and that’s ok. It is just our definition for this article.

A look at the market – the struggle of open source businesses

The Open Source Gold Rush: Success Stories

In the last years there have been many open source success stories, e.g. MongoDB, elastic, Cloudera all IPOd very successfully. There seemingly is a lot of money in open source businesses, e.g. a study by Fraunhofer concluded that “the EU economy is hugely benefiting from global OSS.” [1] Also, companies and big corporations are way more open to work with open source software, indeed 2020 was the first year where open source databases were on par with closed-source databases with regards to corporate adoption (see chart). [2]

And a recent (2021) report showed that across 17 industries, from 1,546 codebases 98% contained open source code. [3] There even is a bit of a hype that open source is the path to success. Now that it’s clear that it is possible to build a business with open source software, VCs also are more open to funding open source businesses. An Andreessen Horowitz report reveals that OSS companies have raised over $10B in capital with a trend towards bigger and bigger deals. [4] Annual invested capital in open-source and related dev tools has increased at around 10% CAGR over the last 5 years. [5] In the years 2018 and 2019 acquisitions, mergers, and IPOs from open-source companies generated over 80USD billion liquidity value according to Bessemer Venture Partners. [6]

The struggle of turning Open Source into a Business

GitHub Sponsorship fail Historically, open source companies have struggled with turning open source adoption into monetary success, “less than a decade ago open source was considered almost impossible to monetize.” [7] Sadly, that’s still a reality today for many open source maintainers and companies alike. Lots of open source maintainers with widely used open source code (“successful open source”), cannot get enough financial support to maintain the code. Of course, there are some successes, but in the end that might also be a question of ratios. For example, in 2020 GitHub reported having more than 190 million repositories. Even if only 10% of those do want to build a business on top of their code, how many of those see a financial reward? Gut feel: Far less than typical startup success odds. On top: What looks successful from the outside, might not really be a viable self-sustained business. Despite its many users, MongoDB spent $100M on development, and it took them more than 10 years to become profitable according to their own statements. [8] 

db-enginesMariaDBvsMySQL A lot of tech companies struggle with – and spend a lot of time on – all the decisions around an open source business model. It isn’t easy, read up how GitLab struggled with finding a business model, or look closer into the MySQL story, and the MariaDB journey (which is a MySQL fork by the founders and original authors of MySQL); look at blog posts from CockroachDB, MongoDB, or elastic on open source – and what you see is a constant re-positioning of open source strategies.

As Mike Volpi from Index Ventures noted at the Index Open Source Summit (2021): “It took Mongo DB 10 years to derive the business model they run now and monetize successfully…” Wow, 10 years to somewhat successful monetization – and that is one of the major open source success stories.

Open sourcing your main technology as a strategy

In this article, we take a deeper look at open source as a pro-active business strategy.

open-source-traction-growth-business Open Source to Build Traction

Traction is the most obvious reason to open source your product. It works like Freemium in the Mobile Games market – or more generally the Mobile Apps market. It’s a great way to evaluate product-market-fit and build traction. When you have that, you can think about monetization.

However, there is a big difference between giving something away for free and open sourcing it. If we stay in the mobile app world: Would open sourcing the app help with traction? Would it jeopardize the business model? Unless the main target users are developers, at least in the beginning likely not – less than making the app / game available for free in any case. However, once the app grows at amazing pace, open source availability could become a challenge in several respects.  

The most obvious would be fast followers entering with that same game and potentially much bigger marketing budgets and better customer access (e.g. on the apps store). Think what would have happened if WhatsApp would have open sourced all its code from day 1 on top of giving the app away for free? It is a legit hyothesis that a fast follower could have scraped some of the market, changing the whole story. On the other hand, if they would open source all their code base now, how much would it harm them? At some point, it beame all about the traction, brand, customer access, so, I would think, it wouldn’t harm them at all at this point. So, driving traction with open source is probably only a viable idea if you address developers or engineers. It’s clearly a phenomenon of the developer-led landscape, and acts as a developer distribution channel. This being said, the price of open source traction is commercialization. It’s a straight forward trade-off: The more open and free your license is, the harder it is to monetize later on. 

building-trust-open-source Open Source to Build Trust

Trust is something that is likely more important for certain software types (e.g. B2B and core tech).

ObjectBox is a database and with that it is a data-centric “core technology” / software infrastructure, sitting at the heart of a company’s solution. Anything that gets used at the heart of other companies or their solutions needs a lot of trust. Trust is easier to come by with size, “no one was ever fired for choosing SAP.” Being a small startup lies at the opposite on that spectrum for many decision makers. Open Source can be a way to overcome this specific challenge and build trust in three ways:

  1. Transparency: The freedom to verify what the code enables; the internal developer team can check the code and vouch for the solution 
  2. Risk-reduction: The freedom to change and maintain the code oneself gives independence from the authors and the success of the solution
  3. Quality: If an open source solution is actively used by a large number of developers quality inevitably goes up 

So, if you are looking for adoption from big players in heavily regulated or security-concerned industries, e.g. medical, manufacturing, automotive, anything with mission-critical networks, open source can help you overcome many of the adoption hurdles you are facing.

open-source-ip Open Source as an IP Strategy

Seems counter-intuitive, right? Well, if you are not aiming to patent your technology, you still might not want someone else (who has been working on the same problem) to patent the same technology harming your freedom to operate. You can protect yourself from that risk by open sourcing it. This can come in the form of a copyleft license, designed to encourage further innovation advancements to the benefit of all, but also limiting the commercial exploitation opportunities for everyone. Or, you can choose a more permissive license, allowing people with commercial interests to keep any advancements they make to themselves. 

Note: Open source code is not a blueprint with exact instructions; there are no obligations to provide clear docs or explanations. While a majority of open source projects strive to deliver a code base that is readable by others, it is not controlled. So, while open sourcing a technology harms patenting it, unfortunately, a way to still protect it, is making it hard to understand. On the other hand, a patent must have an extensive explanation. This makes it easily repeatable by others in the future, after the end of the patent protection, or as a basis for further research (and ways to tweak it in a novel enough way). 

Although it often feels like open source is on the other spectrum of patents, a patent has a limited timeframe and people can learn from it even before it expires. The deal is basically an exchange of knowledge (to be used in the future) for protection (for commercially exploiting it). Keeping it a trade secret has other risks, but could mean that an invention wouldn’t be shared with others for a truly long time. And of course the protection encourages big companies to invest big budgets in R&D too. Delayed open source actually has many similarities with a patent, in both cases the tech is only made available for advancements and unrestricted use after a certain time frame has ended. 

Open Source for the sake of it

There are a lot of ideas floating around open source, and some pressure from the developer community to open source everything. Among developers, open sourcing is considered to be good, social, fair, transparent, and worthy. While there are many advantages in open source, it has turned into a kind of “political tool”, and that’s a downside – and probably the opposite of the original idea. 

Consideration 1: How is a great software supposed to be maintained and advanced without anyone providing funds? When MMOGs (Massive Multiplayer Online Games) became a thing, people understood that there was a constant cost associated with it and were willing to switch from a one-off fee to monthly payments. Software typically needs to be maintained too. So, there are ongoing development costs associated with a piece of software, even if it is not hosted. So, who benefits from open source in the end, if the original creators cannot keep up their work (assuming they need to eat and sleep)? Before pushing everyone to open source, maybe read here, here, here, or here about open source maintainers struggling under the pressure and dealing with burnout.  On the flip side, if a company markets itself heavily as an “open source company”, they should give considerable parts of their own value creating solution back to the community. Using open source tools and building on top of open source code (and even committing back to these solutions) does not mean you are an open source company: If you want to reap the marketing benefits of calling yourself an “open source company” then you should truly be one and commit your value back to open source.

Consideration 2: Who benefits if another company pulls the repo, adds “sparkles”, maybe even some “missing features”, or merely a big “brand name”, or the “marketing budget” and makes a ton of money selling the solution? This is of course assuming a permissive license was used. Well, from an open source perspective that is perfectly fine, and part of the intention of open source. So, it’s great, right? We think, it is easy to understand that some authors who have put all their “free time” / unpaid time into that code struggle to accept when this happens, especially if they have a hard time supporting themselves. But we also understand that big companies with investors (stakeholders…) that have invested heavily in R&D and might or might not yet have reached profitability, don’t really like to see this happen. Unless you are really in it for the fun and driven by altruism and will be in perfect harmony with other people using your code to make money, you should look closely if and how you want to open source your code.

Open Source to save development costs

There is the idea floating around that you can develop your project for free using the open source community. We doubt it works out for many. Of course, if Google maintains a repo that is a base technology used by many developers, developers might want to commit something (anything really) for fame, to be part of it, maybe to get noticed. However, the “anything really” is already a problem: Someone needs to review the submission, respond, potentially rework it and so on… Most other repos will probably not get too many commit requests (let alone from the best tech talent around). Even then, onboarding a large community of unknown developers and letting them commit to your code has its challenges – especially if you are quality-conscious and / or trying to build a business. It creates a lot of work to review commits and reject / merge them. And on top of that from a legal perspective you need to have a waterproof contributors license signed by anyone committing. There clearly is some work involved in the process, maybe more than what it is worth sometimes. 

Also consider this: Most successful open source projects that turned into a business success have limited contributors and / or only internal (contracted) contributors. For example, SQLite 99% of the code was done by Richard Hipp (author and founder of SQLite), and MongoDB stated that about 98-99% of the code was done internally. Redis was almost exclusively coded by Salvatore Sanfilippo. In a presentation from Index Ventures (one of the most renowned open source VCs), one criteria for potentially successful open source businesses was that at least 90% of the code base was developed internally – and of course that the team owned all the IP. If you are after cheap development and external help with your project, maybe take a closer look if open source is the right path.

What open source business models exist? 

The following open source business models are common, but typically used in combination and not as pure models, e.g. most open source companies offer paid support, but rarely only paid support. Note: With time the examples may become wrong/outdated, because once you look into it, you will notice that companies adapt / change their model regularly. If you need to understand one specific company’s model you need to dig into it individually at that time.

There are three basic open source licenses to be distinguished: permissive, weak copyleft and copyleft.

A quick high-level note on the major license effects

Copyleft – major point is that derived works must be open sourced with a compatible copyleft license, meaning any advancements and changes to the work will be contributed back to the community and freely available for unrestricted use.

Weak Copyleft – the weaker copyleft refers to licenses where not all derived works inherit the just described copyleft effect; typically used in software libraries, e.g. a database library used in app development, so the library can be used in a mobile app without needing to contribute the whole app to open source; only changes to the database library itself would carry the copyleft effect.

Permissive – a permissive open source license allows you to do anything with the source code including keeping derived works to yourself and commercialising on it

Description Examples Note
Paid Support Providing paid support, trainings, certificates RedHat Where has this approach been working – as a pure paid support approach – ever since Red Hat?
Open Core The core product is free and open source, extra features are paid; have an open-source core and sell closed-source features on top of it SugarCRM,
MySQL
It is basically the widely successful freemium model just with open source; typically you expect the large majority of users to use it for free. The open source part of course enables anyone to build the same features as you
Dual Licencing The free open source sw uses a copyleft license, whereas the paid license is a commercial license without copyleft effects MySQL,
elastic
This kind of license enables you to monetize your commercial (typically bigger users) and still enables the community to expand the product landscape and innovate based on the code base
Delayed Open Source All code will be fully open sourced with a time delay (details and timings vary) MariaDB,
Cockroach DB
The effect depends also on the licenses used, but typically it protects you from competition for a given time frame, so only you can exploit your development commercially and gain market share / develop an advantage based on market entry time. At the same time it reduces the risk for adopters, because they know the code will become available to them
Open SaaS Offering the software open source and hosted as a service (SaaS), which is the primary source of revenue allowing anyone to do the same with the software with a permissive license (self-host or host for others) WordPress,
Sharetribe,
MySQL,
MariaDB
This model has been the major point of discussion in the last 3 years and is seen by many as the holy grail for monetizing open source software; it also triggered many companies to move away from an open source licensing model as large cloud providers can easily host an open source product at better rates
“Closed SaaS” Strictly speaking / officially not “open source”. Offering the solution open source and hosting it as a service (SaaS) while NOT allowing anyone to host it, often times unless they contribute the whole solution back to open source (copyleft effect)) MongoDB,
elastic,
Cockroach DB
The first license that built this specific copyleft-effect into its license was MongoDB (SPSL). The license has since been adopted by e.g. elastic, …. Since then similar licenses have been developed. OSI did not approve the license as an official open source license.
“Ad model” For lack of a better name, I called it “Ad model”; it’s really having so much reach and traction that companies pay for customer access through your solution or similar co-operations AdBlock Plus,
Firefox
Can take many variations: For instance, the open-source application AdBlock Plus gets paid by Google for letting whitelisted acceptable Ads bypass the browser ad remover.
Or, in 2014 Yahoo struck a deal with the Mozilla Corporation to make Yahoo the default search engine in Firefox

 

A look at the open source market

Name Founding Year Funding Summary Started with Open Source (license) Open Source Evolvement Devtool Open to contributions / CLA HQ* Notes / Story synopsis
MongoDB 2007

6 funding rounds with a total of $311M

IPO was in autumn 2017; valuation $1.6B

started with AGPL Created SSPL in 2018 causing much debate in the community. SSPL is not an open source license Database “we own 100% of the IP”; 99.9% developed in house and the few contributions accepted were from people who signed a CLA US-based According to statements fromMongoDB, adoption went up after the license change (15 mill dwlds, more than in the prior 10 years together). In 2016 they launched their database-as-a-service offering, which is considered the game changer w. regards to building a business. Until Oct 2017 MongoDb downloads were >30M with 10M from the prior 21 months.
Data Bricks 2013 Total funding 1.9B; last round: Series G; Feb 2021 $1B proprietary PaaS their main service is proprietary, but they use a lot of open source software and have a strong footprint in the open source community Backend NA US-based “Databricks is the original creator of some of the world’s most popular Open Source data technologies” – open source is a large part of their positioning and marketing. However, it seems their main offering, while based on open source, is proprietary. So, not an open source business as defined here.
elastic predecessor released in 2004; first elasticsearch released in 2010; incorporation only in 2012 Total funding $162M; last round was a series D; elastic did IPO in autumn 2018 started with Apache 2 for for elastic search (which was the original main product) Last license change in 2021: You can now choose between the proprietary elastic license or SSPL; so stritly spaking not open source anymore Devtool CLA US-based 2018: elastic IPO –> shares doubled the first day. Note: With so many different products (not a single product company), the open source strategy is harder to grasp.
Confluent 2011 Total Funding Amount $455.9M, last round: series E Unlike Apache Kafka which is available under the Apache 2.0 license, the Confluent Community License is not open source and has a few restrictions Kafka is open source,
Confluent isn’t
Devtool NA US-based “Founded by the team that originally created Apache Kafka” – the team behind Confluent contributed a lot to open source pior to Confluent, but the Confluent code itself isn’t open source as far as we understand. They heavily rely on other open source software for their tech stack though.
RealmDB 2011, before the founders did “TightDB” on which the Realm DB was based 4 investment rounds. Then MongoDB acquired them for $39M on Apr 24, 2019 started out closed; then open sourced the database and went for the open core model, then subsequently open sourced the Sync solution too, going for the hosted (SaaS) model from closed to open core to open SaaS; acquired by Mongo to push their backend offerings and complement with an edge and sync (serving Mobile and IoT better) Database looks like they accepted contributions Started in Europe, but HQ went to the US when joining YC 2014; it was since bought bei MongoDB The founders both left the company the year before it was acquired by MongoDB. The acquisition prize was a little less than what Realm had raised in the years before. The Sync solution is now tied to using the Mongo servers / cloud and a huge part of their push for the IoT market.
SQLite 2000 Bootstrapped Public Domain, which we always considered one of the most “open source” ways to open source but in the light of recent discussions around the SSPL license, strictly speaking it is at least not OSI-approved Public Domain, mainly monetize big corporates for being in a Consortium; also offers services and since xxxx? encryption (basically paid feature); our guess is that this is not really a repeatable business model Database Richard Hipp owns all IP, 99% is developed by himself; very limited outside support (2 part-time freelancers that we are aware of, both don’t have any rights to the IP) US-based (privately held by Hipp, Wyrick & Company, Inc (author: Richard Hipp and all stock held by his wife G. Wyrick; both work for the company)), HQ The company has always been and still is run by Richard Hipp and his wife; from a development perspective it is a one-man-show. Richard wrote SQLite himself, as far as we are aware they have no other employees apart from 2-3 part-time supporters for specific versions; very special Open Source Story.
Couchbase Lite 2009 – Couchbase, Inc. is a merger of Membase + CouchOne in 02.2011; both former companies were started 2009 and had funding 251 million USD total funding; 8 rounds with latest Series G for $105 million Apache 2 Delayed Open Source Database US-based (both entities were US-based already before the merger) Couchbase now mainly sells Couchbase Servers; Couchbase Lite is the smallest part of their business; in 2020 there seemed to be a shift towards the Sync Gateway and Edge Computing market in communication; however, the main business still seems be on the server side and based on cloud lock-in.
redis 2009 Total Funding Amount $246.6M redis the database itself is and always was BSD; redislabs is the company that has secured certain rights for redis and sells extensions and add-ons under several licenses, they changed from APGL to Apache 2.0 with Common Clause to a proprietary license called “Redis Source Available License” redis itself is BSD but features / extensions around it from RedisLabs are licensed uner prorietary licenses Database Any contribution needs a CLA that is provided by redislabs; we believe anything committed under this CLA could also be used in redislabs proprietary products (which typically is the same for anything committed under a permissive license, but which has attracted some criticism from the OSS community) Redislabs is US-based. Salvatore Sanfillipo (antirez) was always bsaed in Europe; redislabs originated in Israel RedisLabs is the commercial entity that markets redis; redis was largely developed by Salvatore Sanfilippo. He left redis as a maintainer in 2020.
RedHat 1993 bought by IBM in 2019 for $34 billion; before that they had raised $240.7M Linux, which was the core of the success of RedHat, is GPL (though of course not the company’s decision) RedHat is a huge company, definetely not a single product company, and thus also does not really fit into this matrix, however, it is THE example for successful commercialisation of open source and we feel the matrix would lack without it Backend / Data centric we believe you can contribute to most (all?) projects without a CLA US-based Read here why there will never be another Red Hat (and there is no “Red Hat Model”). Note that of course the Red Hat founders did not write Linux (on which the majority of their success is based), but at the very least they (as well as VA Linux) gave option shares to Linus Torvald out of gratitude (at lest not out of obligation). When both companies successfully IPOd, Linus made 20 Mill USD (in total) from both sales.
MySQL 1995 (development started already in 1994) Total Funding Amount $39.8M, sold to Sun in 2008 for 1 USD billion started out with AGPL; several license adaptions and changes in the open source business model over the years, e.g. for a long time they had a 2 year delay for the open source version, but changed that to no delay at some point. Dual Licencing and Paid Support Database Yes, even though called OCA (Oracle Contributor Agreement) Sweedish company until it was acquired by Sun Microsystems in 2008 (who then were acquired by Oracle) The founders forked the latest MySQL version when Oracle acquired it. Most of the original database code base was developed by Michael Widenius; with regards to database technologies a pattern emerges: Often the core / most of the base technology is developed by one person – as building a database is a rather huge endeavor that’s kind of striking, isn’t it? BTW: MySQL is named after Monty Widenius daughter (“My”)
Hyper 2010 (academic research project at TUM) undisclosed proprietary, not open source None Database NA EU-based; German “university spinoff” acquired by Tableau very early 2016: HyPer acquired by Tableau. Terms of the deal were undisclosed
ParStream 2011 acquired by CISCO in November 3, 2015 proprietary, not open source NA Database NA Originally EU-based (German), then moved to US in 2012, acquired by Cisco in 2015 Cisco ParStream is no longer offered as a stand-alone product. The functionality of Cisco ParStream is now part of Cisco Kinetic.
Cockroach DB 2015 Series E in Jan 2021 for $160M Apache 2.0, plus a proprietary license for enterprise features Started as open core, now a form of closed SaaS with delayed open source: They changed to a proprietary license in 2019, called BSL, which prohibits users from offering CockroachDB as a service (DBaaS, SaaS), and each release converts to an open source license after three years. CockroachDB is therefore officially not considered open sorce anymore Database CockroachDB received significant contributions from the community (“we have had over 1590 commits from over 320 external contributors across all our open source repositories” (2020)), CLA: Yes US-based In June 2019, Cockroach Labs announced that CockroachDB would change its license from the free software license Apache License 2.0 to their own proprietary license, known as the Business Source License (BSL), which forbids “offer[ing] a commercial version of CockroachDB as a service without buying a license”, while remaining free for community use.
Berkeley DB 1994 Acquired by Oracle in 2006 BSD and Sleepycat Public License (a permissive OSS license) Oracle changed to dual licensing with APGL and a commercial license Database NA US-based It is still used in many routers and gutfeel is that the market share in that specific area is good. Unfortunately, no numbers available.
GitHub 2008 In 2018 Microsoft bought GITHUB for $7.5 billion. proprietary, not open source NA Backend / Data centric NA US-based Microsoft bought GitHub for the developer access; that would not have changed if it would have been open source and I do wonder what would have happened to GitHub if it would have been open source; one thing is for sure: GitLab wouldn’t have been able to position themselves as the open source alternative; however: the closed source model worked for them well, even though it is a developer tool.
GitLab development started in 2011; incorporated only in 2014 $434.2M Series E completely open source (MIT license) Now: Open Core Model; Community Edition: MIT License
Enterprise Edition: Source-available proprietary software
Backend / Data centric Originally CLA, now dropped and instead the code must be committed under the same license as the feature is (mainly Apache 2.0) plus a DCO US-based (development was started in Europe, the founders incorporated in the US in 2014 when joining YC) GitLab used being open source as a strong positioning factor against GitHub (which was never open source). It was an odyssey to find a sustainable business model (and it seems it is not SaaS). Note: The pure service model and the donation model did not work for them. Again: The code base of the core system was by and large developed by one person.
MariaDB 2009 Total Funding Amount $123.2M Dual licenscing with GPL license, version 2 and a prorietary source available license for some parts They evolved their dual licensing approach to using the proprietary source avaiable license (BSL) Database Yes, and the CLA is shared under a creative commons license that allows you to use it as you like https://mariadb.com/kb/en/mca/ Sweedish company 10 years after it was forked, MariaDB has 20M users, a fast growing database business and has >€100m backing. Note: The pure service model as well as the donation model did not work for them.

Building an Open Source business Exec Summary – TL; DR

  • There is a lot of evidence that open source companies struggle with open source models and licenses – this is also true for successful companies
  • There is no “Red Hat Model” – just selling services has rarely worked
  • The donation model typically hasn’t worked for open source companies, e.g. GitLab and MariaDB, so it is not astonishing that GitHub sponsorships don’t work out great for most maintainers. Also note: GitHub sponsorships may put you in a bad legal position depending on where you are based
  • There is a trend from successful open source companies towards Source Available licenses instead of “official Open Source licenses”, e.g. MongoDB, elastic, CockroachDB, …
  • There is an indication that successful open source companies are US-based (even if founded / started in Europe), which we believe is due to the funding opportunities provided in the US: 1) the US provides generally more funding (more and bigger funding opportunities; there is lots of market research on that), 2) US VCs and Silicon Valley have the reputation to also fund at earlier stages, e.g. idea stage, and companies with traction (instead of revenue), investing in a longterm perspective. Traditionally, European investors don’t.
  • Public domain is strictly speaking also not considered to be an open source license 😮 (at least not if it needs OSI-approval; does it? 🤔) 
  • While Open and Closed SaaS seem at this moment to have been the most successful models, it is no holy grail and definetely does not work for everyone, e.g. it didn’t work as the sole business model for GitLab

Conclusion

The open source market lacks flexibility and transparency from a licencing / legal perspective, and ever more Source Available licenses don’t help: A “license stack” with building blocks like the Creative Commons would be helpful to mark software easily and clearly with regards to the main terms, e.g. “source available”, “free for commercial use”, “attribution necessary” etc. It would help maintainers and users alike, but needs bigger entities to drive this (like an OSI).

The open source market also needs more balance, at the very least more understanding and “love” towards maintainers. More finanical support as well as other ways of giving back to demonstrate the appreciation of well-maintained repos and great free software, will keep the ecosystem healthy and thriving. That’s a community effort; everyone can contribute.

Startup Sesame –  a field report

Startup Sesame – a field report

What is Startup Sesame?

Startup Sesame is a one-of-a-kind program that connects European founders to European event organizers, bringing startups to amazing events throughout the year. While the exposure to events is great on its own, what’s even better is the network, on-site intros and especially the team behind it: Ben Costantin and his crew (@startupsesame).

Why Startup Sesame?

As a startup, you usually cannot afford to go to many conferences; however, a well-planned event can give you media exposure, great connections, sales leads, new ideas and generally provides you with learning opportunities along the value creation chain of your startup (from customer experience, networking, to closing a deal). It also gives you a great “reason for reaching out”. Yet, filtering out tons of events and which to attend, researching and planning the event in advance, and then performing on site and catching up with everything afterwards is a lot of work. Having a partner like Startup Sesame that helps you navigate that jungle, getting in touch with people on site, and last but not least with the financial costs, is invaluable. Even more, Startup Sesame not only sponsors most event tickets, they also provide additional opportunities to make use of the occasion like e.g. competing in the pitching competition, having a booth.

How does Startup Sesame work?

First of all, you need to apply.

Then, if you are selected, you are invited to a starting weekend where you get to meet

Startup Sesame

Startup Sesame

Startup Sesame weekend 2018 (photo by Kara Ferguson)

Then during the weekend, you get educated about the current startup ecosystem, the events, trends and most importantly the opportunity to pitch and get feedback on your pitch.

Startup Sesame

Startup Sesame

 

Panel discussion at the Sesame Summit 2018

This weekend allows the Sesame team and the startup organizers to get to know you and your business. This way, they can learn how to best help you and make unique recommendations on events and competitions to apply to. It also gives you the opportunity to understand what VCs and event organizers are looking for in startup competitions and on-stage talks, which events make sense for you, and how to go about these opportunities to really make use of them for the business. It also helps you refine your pitch.

After the weekend, you receive additional feedback and mentoring and then, during the following year you are presented (actively!) with event opportunities that match your startup and personality. Also, they assign #rockstar #mentors to you that help you make the most out of your event attention on site.

 

Startup Sesame Cohorte Retreat

Every year is organized differently. In our 2018 cohorte the setting was special: We were spending the time all together in shared rooms in a youth hostel at the Valencian beach. Food and coffee was a bit restricted, so we all needed to share and pay attention to each other’s needs. This brought the cohorte closer together than I think would usually have been the case (also great for the more introvert people… :D).

Who is Ben?

Ben is the founder and leader of Startup Sesame. Ben’s superpower is connecting people, or rather the right people; people who can benefit from being connected. Ben has a big heart, is very kind, and I believe he truly enjoys helping founders — and this really is what shapes the spirit of Startup Sesame. I am grateful to be part of the Startup Sesame Family (#proudsesamer).

Is it worthwhile?

For ObjectBox the answer is Yes. Once the next applications open I can only encourage you to apply. Just one word of warning: They give you tons of opportunities and in all likelihood, you can’t handle them all. E.g.: We needed to be very selective due to time constraints and it was/is hard to see many great opportunities pass by unused. However, you can check out what the #proudsesamer of 2018 have achieved in the last months on @startupsesame — it’s impressive and entertaining. ?

These are the kind of events that you can attend as part of Startup Sesame. It was a great experience and lots of fun, but also added great value to our fundraising.

Or, if you are at dmexco 2018 or SaaStock 2018, you can join my talk on Open Source and Edge Computing. We can meet up there too 🙂