Ask HN: Are there startups that went open-source and succeed?

It would depend on your definition of "succeeded", but Docker (formally dotCloud) made a great transition after releasing docker and just raised a very nice round of funding.

"In 2013, recognizing the need for flexible, PaaS-like environments inside enterprises and across clouds, the company released much of its PaaS container technology as the open source Docker project. Docker is an open source engine for deploying any application as a lightweight, portable, self-sufficient container that will run virtually anywhere. By delivering on the promise “Build Once…Run Anywhere,” Docker has seen explosive growth, and its impact is being seen across devops, PaaS, and hybrid cloud environments.

The success of the Docker project led the company to change its name from "dotCloud, Inc." to "Docker, Inc." in October 2013 in order to reflect its focus on the new product. Docker, Inc. continues to run the dotCloud Platform, supporting thousands of containers running applications for a wide variety of businesses."[0]

[0] https://www.dotcloud.com/about.html

Your product is already succeeding. Why do you think open sourcing it will make it more successful? Are you sure you can make an open source project bigger than your company?

Why do you think these competitors matter if their own customers are telling you they're shit and you're great?

Why does HN matter to your startup? Are you sure it matters to theirs? One simple way to tell - do your competitors get on HN with stories about being a startup/engineer, or is their product itself interesting to HN? If HN isn't the best source of your customers then it shouldn't be a factor in any decisions or marketing/pr.

What about these conferences - are they closing deals and making money at these things, or are they just spending on them?

How about leveraging their marketing? Let them find unsatisfied customers and poach them straight from hn/twitter/linkedin/facebook/anything you can find.

A lot of companies seem to be using this model quite well. DataStax, Couchbase, Cloudera etc.

it seems to me open sourcing means more risks than upsides. Can't you raise funds based on your growth/customers and hire someone who will make the PR you hate? Sorry for not answering your question :-) +1 for the Docker example below

I'm not sure if you would consider it a startup anymore, but:

https://github.com/mongodb/mongo

NewsBlur[0] is open-source[1] and seems to be doing well.

[0]: http://www.newsblur.com/

[1]: https://github.com/samuelclay/NewsBlur

Sounds like you should sell the product to someone that wants to do the business side of things, and stay on as the head of product development.

It is doubtful to me that open sourcing it will make it well known unless it is a technical product and your customers are developers. Do your customers care if it is open source? Most people selling Asterisk installations never explained to the customers that technically the software was free. All that will be accomplished is that someone who likes marketing & PR can pickup your work and create competitor D, that has everything you have, but with someone that likes to sell. Better to get that person on your team after they pay you some money.

I don't see in any way how exposing your IP will make you bigger.

You say that your competitors are better at PR. Have you analyzed your growth and PR strategies?

What is your competitive positioning? Are you cheaper? Are there fundamental technological advances that you have that make you innately better?

Here is a cheat sheet that is sort of the standard when it comes to competitive strategy: http://en.wikipedia.org/wiki/Porter_five_forces_analysis

At the moment, no examples of start ups which started as closed source and went open, come to my mind.

However, there are a few open source startups out there which started open from the beginning, such as Drupal or WordPress. You could also have a look at NewsBlur which got some traction after Google shut down Reader.

Whether or not being successful depends on a few things:

First, will open sourcing really make the product better? From my experience people tend to overestimate the capabilities of the open source community. This community does not translate to "legion of free developers at your disposal" but require an proactive engagement and community management. Are you well prepared for that?

Second, the nature of the product and the audience: If you're selling server software, for example, such like RedHat, there will be those "private" and "small" users which take your product and use it on their own. But there are also corporate users who will buy SLAs and first and foremost want someone to blame for things that are not working. Second, there are products who benefit from centralization. NewsBlur for example may less valuable for individuals if it would not provide a "hosted service". The same goes for Facebook. Their asset is more the user base than the technology (even if that's, of course, also a huge stack).

Third, what is your "open source strategy". There are companies like Pentaho or Alfresco which offer an "open core" and sell additional features for that. I would consider that more as closed than as open source, in some way it is a bit like a "demo version".

I would love to hear what you've build so far, because open source in a commercial environment is a topic of interest for me.

There is an entire movement about open companies, among them

https://assembly.com/

https://gratipay.com/

https://www.balancedpayments.com/

There are a shitton of companies that are open source and don't succeed. Do what you're comfortable with. Are you more excited to nuture and manage a community rather than do marketing stuff?

Also, if you've stolen customers, and your marketing is non existent, then maybe you should just fix your marketing and not radically change your business model.

Reddit started out proprietary, and then became open source. Of course, their community is necessary for a site of that type to succeed.

>Open sourcing will make the product better, will make it well known and might even speed up our growth.

Open source by itself won't do any of those things.

The question is, what advantages would being open source give you over remaining closed source? Whether it is open or closed, you still have to do the promotion to make it well known. If you go open source, does that automatically mean you will open the development process as well, and if so, you'll have to consider the process by which you accept changes into your product, IE: will there be an open level and then a supported "commercial" one, for example? how will you build a team of community supporters?

Yes, there are obviously examples of open-source success in the world, but it isn't clear from your posting whether there is a strategic advantage or not.

What kind of product is it? If this is a SaaS application, I would not recommend open sourcing it.

If you are shipping software that runs on client hardware (e.g. a database) it might make sense.

Open sourcing doesn't necessarily mean the product will get better. There are often "fights" in the open source community, and you could spend a lot of time discussing what features to add or not add instead of implementing them. (This of course all depends upon the method in which you open source the project/product.)

If you like developing and dislike marketing, use some of that $50K and hire a marketer. You don't necessarily need lots of money to market, it just makes it easier. For example, you probably missed a good free marketing opportunity by not mentioning the name of your company or your site in this post. Try and find someone to help you become a bit more clever and tactical in your marketing efforts, and it will probably pay off much better than open sourcing. My $0.02...

How about Netscape? I think they've been reasonably successful with open source development and foundation governance.

Open source is a different business model - you won't be able to do SaaS and open source at the same time. You could try open core where open source would be your marketing channel, this one works - e.g. Talend or RedHat.

Instructure (the guys behind the LMS Canvas), are pre-IPO.

https://github.com/instructure/canvas-lms/wiki

http://www.instructure.com/

How is the commercial arm of Nginx doing? Nagios?

Define "succeed".

Anecdote time. The last open source company I dealt with worked in the big data space. They messaged themselves as a product company and listed 3 products on their page.

I was working for a company providing client tools and we were teamed together by a larger System Integrator on a contract proposal.

While working with them I got curious about their product (hey, maybe someplace cool to go work someday).

The conversation went something like this:

   Me: So you guys have some impressive software, you must have a heck of a dev shop

   Them: We do. The good news is that we got a nice head start using some open source stuff, hadoop, etc.

   Me: Oh. So what bits did you guys make?

   Them: Well we made this (points to web accessible management console) and did the glue work to pull together the open source bits

   Me: Oh. So is your value proposition then that you guys have tightly integrated this technology stack and...

   Them: *Right* and provide the technical expertise to run it. (sits up proudly) and all the work *we* did has been open sourced as well (goes to their github page).

   Me: so....if I were a customer and I bought x amount of product A from you, what exactly am I getting?

   Them: you're getting the integrated stack and our expertise and support.

   Me: Support available by contract?

   Them: Right.

   Me: So let's say I'm the customer...what's to prevent me from just downloading and compiling all the source code for your stack and your glue and just poaching a couple of your guys and saving myself a few million dollars in FTE hours?

   Them:Well that's highly unethical...poaching our people

   Me:okay, or I find a couple really good guys on most of this stack and give them 3 or 4 months to come to grips with it and your glue...same thing...what's your guys' value proposition to go with your company instead of just doing that?

   Them:...

They sold to another company a few months later and I've heard it was mostly for the customer contracts they already had in place. I'm not aware they were ever profitable or on a path to profit. Great success?

My point is, you have to really consider this kind of line-of-questioning and put together a rock solid value proposition to have a chance at succeeding. Because why pay you for whatever when I can get it free as in beer and use my own people who I'm already paying for?

To echo some sentiments already voiced, open sourcing a product is about more than simply publishing your source to Github. It is about building a community around that source code to evolve the product. Contributions can take many forms such as code, defect submissions, documentation, testing, etc. This community drives conference attendance, on-going media attention, and, most importantly, your company actually gaining market position from an open source strategy. Building such a community takes a fair amount of time and effort. Very few spring up like Docker. If you are committed to the long haul of building such a community then you could gain a tremendous amount. If you are expecting to simply publish the code and get immediate and long-term PR from the act of your company working in a public repository, then I think open sourcing will not only fail to meet that expectation, but likely be a critical distraction for your company.

> To really really beat them, we will need to inject some cash and start the PR channels, conference attending and spend a lot of time in marketing. I hate doing that. I am happy to develop the product. Very happy to meet customers and present the product, and strongly convinced the world deserve to know about our product.

Why would you compete directly against their strengths? It doesn't sound like you can outspend them. Play by different rules. Focus on being more creative, more targeted in your customer acquisition, more focused in your messaging, more good.

I'd also consider ways you can outsource components of your codebase instead of the full thing.

>> To really really beat them, we will need to inject some cash and start the PR channels, conference attending and spend a lot of time in marketing.

So far so good, standard business stuff.

>> I hate doing that.

Here lies the problem IMHO. To make your business a success, you need to do stuff you don't necessarily like, enjoy or are familiar with.

You think of "open sourcing" as a lazy marketing channel that will keep you in your comfort zone. It doesn't work like that.

You could either find a co-founder or hire someone to handle that stuff. Or, you could suck it up and do it yourself.

I am a bit biased, being the founder of a startup whose products are all Open Source. BUT... nonetheless, I'll say that I don't necessarily think that going Open Source is going to be a magic cure-all for you. And it could make things worse, depending on may details.

Remember, Open Source really is more of a development methodology than a business model. And being Open Source doesn't obviate the need to think about marketing, advertising, sales, etc.

If you wanted to go the OSS route because you believe in OSS ideologically, or because you think it's a way to make the world a better place, I'd wholeheartedly say "go for it". But if you want to do it just because you don't like marketing, I'd say you should consider giving the whole thing some more thought.

Basically, what d0m said is pretty much dead-on, IMO.

Sleepy Cat Software, the makers of Berkeley DB, went on with a fully open-source model for 10 years until getting acquired by Oracle in 2006. They however started the company around an existing open-source product, so it may or may not be relevant to your case.

[0] https://en.wikipedia.org/wiki/Berkeley_DB