6 ms·

I feel there's a few cases cited here to make a case that an entired business model is dying, but it doesn't look to me that this is an overall trend. You can't

by hannob 6y ago

I feel there's a few cases cited here to make a case that an entired business model is dying, but it doesn't look to me that this is an overall trend. You can't extrapolate from "5 projects didn't fare well with this, so it's not working". But there's more. I followed the MongoDB case a bit and it's not exactly how many make it sound like. MongoDB was doing fine as a company. It wasn't like they were unable to pay their programmers because AWS offered a hosted MongoDB. In the months before that controversial license change they got plenty of funding from investors. It looked all more like investors created expectations of future revenue and they became cold feet if they could meet those expectations. It remains to be seen how this will work out in the long run. I'd personally consider everything that depends on MongoDB to be toxic. With that license it won't be shiped in standard linux distros, other projects are less likely to build on it.

joejoebags 6y ago
I wrote it last night; I didn't have time to research every "open core" company I could think of to figure out a chronology of their licensing strategy. I decided to publish it based on a limited number of case studies to gin up discussion and hopefully learn from other people about counter-examples. Do you know of any?
- hannob 6y ago
  Of course by mentioning any name here I risk that they might be a future candidate of closing down and you say "gotcha" :-) Not all of them are "open core" in the sense that they have a core product and proprietary extensions (some just opensource everything they make), but a number of relevant companies around FOSS products: Gitlab, MariaDB Corporation, Blindside Networks (Big Blue Button), Qt Company, Mattermost Inc.
  - joejoebags 6y ago
    Thanks, those are great examples. I've considered writing about Mattermost before, as I think it's a fascinating pattern that I haven't seen much elsewhere. Attack an existing, high-profile app by cloning it in the open but then additionally build a for-profit company around the clone. Truly a galaxy brain strategy.
    - paulgb 6y ago
      I’ve been interested in this pattern as well. I’d contend that GitLab is another good example, and even argue that Automattic is too (IIRC Movable Type was already a successful proprietary blogging platform when WordPress came along) Which is all to say, if you write that post, I for one will read it :)
      - evanelias 6y ago
        I don't think Automattic really fits the same pattern. Although Movable Type was one of the earliest and most successful source-available blogging platforms, there were a bunch of others soon after. They all had similarities in functionality, by nature of being blogging software, but they weren't exactly "clones". WordPress was actually a fork of another early blogging software, b2/cafelog. When Six Apart made Movable Type's license more restrictive in 2004, a portion of the userbase jumped over to WordPress. Another thing in WP's favor was ease of hosting, due to being written in PHP, vs Movable Type's Perl. This all led to a lot of momentum for WP; Automattic was founded after that, in 2005.
        paulgb 6y ago
        Thanks for the context. I wasn’t really involved in WordPress until a few years after, so the early history is foggy to me.
  - joejoebags 6y ago
    Also--thanks for going on the record. You are right that you might be criticized in the future by nit-pickers, but it's much more satisfying to take public stances and find out what you're made of (in my opinion).
  - pletsch 6y ago
    Big Blue Button is outstanding for any educators looking for tools. Full disclosure that it was built at the school I attended, we had a lot of profs use it and it was by far my favourite way to do distance learning.
  - vngzs 6y ago
    I'll name some more, with the same disclaimer: Confluent (Kafka), Redis Labs, Eucalyptus Systems Inc. (AWS clone, acquired by HP), Instructure (Canvas)
- JKCalhoun 6y ago
  I'm stupid in this space, but as an outsider, is this "the end of an era" because it looks like MapBox is simply pulling the tried and true "bait and switch" which has been around forever. In that regard, "open core" (or open source for that matter) was never a business model — the business model always was bait and switch. Open was the bait. But likely I have always been a little suspicious of "open source" and likely I am now over-simplifying.
  - eikenberry 6y ago
    "Open source" was created as a marketing term and companies using it as such shouldn't come as a surprise.
- skrtskrt 6y ago
  Hashicorp
- jayparth 6y ago
  Literally tons within the data ecosystem. dbt, Great Expectations, Dagster, Seldon. The list goes on. My employer Tecton has an "open core" called Feast and we are doing great. Mattermost, PostHog also come to mind. Databricks has shown that you don't need a crazy license to win. I disagree with this article from my personal experiences and my industry experience but I respect you writing it. The business model is clearly alive though. Those companies that I listed have raised 100-200M in the past year at high velocities.
  - deleted 6y ago
    [deleted]
  - lmeyerov 6y ago
    vc $'s may be seriously clouding the analysis here. in terms of revenue justifying big valuations, how many healthy companies are there, really? ("spend $20M to make $3M..." = not healthy) What about ratio of OSS successes vs closed successes, esp w/ efficiency? e.g., the biggest co there is databricks (and i continue to root for them!), and contrast w/ snowflake who started in a similar period, grew 10-20X bigger, and started more simply (get a clone of redshift without doing business w/ aws). worse, databricks took a lot of phd students many years with a lot of big corp funding before the vc's got involved: that's a high bar an oss co must hit vs not for adjacent high-growth spaces. the good news for oss founders is VC's are warming to investing here, and sometimes, even before OSS traction. irrespective of profitability, the founders have a better chance of flipping it to be someone else's problem. not necessarily as clear cut for community-minded co's though that want to be financially healthy for their community. it seems the bigger and more numerous successes are non-oss, and despite the many oss attempts, the big sustainable oss successes have to doubly succeed at what is already hard. If going OSS increased chance of success -- and didn't actively challenge success -- I'd expect relatively more successes by now. I wish all this wasn't so but it's hard to unsee...
TAForObvReasons 6y ago
Based on HN's cheerleading when some projects abandon open source (for example the top comment of https://news.ycombinator.com/item?id=19488642 https://news.ycombinator.com/item?id=19488642 ), the overall trend may be the user base not caring about open source in the same way people cared 5-10 years ago
- warpech 6y ago
  When we at Handsontable switched to a proprietary license, it wasn't met with much enthusiasm from the existing open source users. But it helped us to get better deals. We invested part of the proceeds in another open source project - HyperFormula. The ideology is still in our blood and we keep the open source circle of life running. But I am happy that this new open source project is not on a collision course with revenue.
  - julianmarq 6y ago
    > The ideology is still in our blood and we keep the open source circle of life running. I'm curious about what exactly you mean by these two sentences. Particularly the second one. Is this circle you speak of the one where a company announces an open source product and once the goodwill—that open source development gives it—ensures a number of contributors and early adopters, helping the project grow until the company thinks it's good enough to monetize, at such point they close it down and start charging everyone; then they start a new open source product with the extra money, rinse and repeat?
    - warpech 6y ago
      I hope this does not sound cynical. When we release a new open source project, we are not sure what the project will turn into. We put it out, hoping to get some reaction from the world. If there is no reaction, we will only invest a bare minimum for our own use. When there is some reaction, the community might find its sweet spot. When there is huge enthusiasm, which is the least likely, we might decide to seek ways to invest more and get our returns. Keep in mind that for projects like that, even if they are open source, the vast majority of contributions come from the primary investor. And other contributors can always fork. It is not anything special about open source. For any product, early adopters are almost expected to get hurt or lose interest as the product matures. It's a part of the product's life cycle that's in any startup book. Crossing the chasm is hard not only for the business but also for the original user base. Yet, successful businesses are destined to do it. I am sorry for the ones that become dissappointed, but they too get something out of it along the ride.
gumby 6y ago
> It looked all more like investors created expectations of future revenue and they became cold feet if they could meet those expectations. More likely MongoDB promised future revenue in order to attract those investors and then couldn’t figure out how to get there.
x0x0 6y ago
> In the months before that controversial license change they got plenty of funding from investors. Getting funding from investors sucks. It comes with expectations of growth. Mongo still hasn't turned a profit. To the extent that they are a saas business with saas economics that's common, but still. They clearly read the writing on the wall and declined to fund AWS's R&D costs for free.
infinity0 6y ago
I wish there was a FOSS license with a clause along the lines of: - if your company makes >X revenue a year, give us some of it. Ofc, they (FSF/OSI/DFSG) would have to relax their FOSS definition(s), but with more projects dying in this way hopefully more FOSS organisations will take heed and think about this. Ofc, the wording of the license has to be precise enough to avoid something like fobbing off the servers to technically be controlled by subsidiaries with 0 revenue. Ofc, the license would have to figure out how to share revenue with major contributors too. Contributors already contribute to for-profit open source projects without themselves getting paid, so this license would make the situation strictly better for them.
- deleted 6y ago
  [deleted]
- insertnickname 6y ago
  You can write such a license if you want (or hire a lawyer to write it), but it's not FOSS and it never will be. Why is it important to you that such a license is recognized as FOSS?
  - infinity0 6y ago
    Like laws, definitions change with changing times and circumstances. I am a Debian Developer and very happy to discuss this with other members of the community. Why is it important to you that such a license is not recognised as FOSS?
    - cycloptic 6y ago
      I can't imagine it would go down well at all with Debian users if random packages (in the free or the nonfree repo) came with clauses saying you now owe royalties to random parties. If you installed 10 packages on your company's server that each ask for 20% royalty, your company now would owe 200% royalties. It would just make the distro unusable by companies.
      - 6y ago

by hannob 6y ago

joejoebags 6y ago

I wrote it last night; I didn't have time to research every "open core" company I could think of to figure out a chronology of their licensing strategy. I decided to publish it based on a limited number of case studies to gin up discussion and hopefully learn from other people about counter-examples. Do you know of any?

hannob 6y ago
Of course by mentioning any name here I risk that they might be a future candidate of closing down and you say "gotcha" :-) Not all of them are "open core" in the sense that they have a core product and proprietary extensions (some just opensource everything they make), but a number of relevant companies around FOSS products: Gitlab, MariaDB Corporation, Blindside Networks (Big Blue Button), Qt Company, Mattermost Inc.
- joejoebags 6y ago
  Thanks, those are great examples. I've considered writing about Mattermost before, as I think it's a fascinating pattern that I haven't seen much elsewhere. Attack an existing, high-profile app by cloning it in the open but then additionally build a for-profit company around the clone. Truly a galaxy brain strategy.
  - paulgb 6y ago
    I’ve been interested in this pattern as well. I’d contend that GitLab is another good example, and even argue that Automattic is too (IIRC Movable Type was already a successful proprietary blogging platform when WordPress came along) Which is all to say, if you write that post, I for one will read it :)
    - evanelias 6y ago
      I don't think Automattic really fits the same pattern. Although Movable Type was one of the earliest and most successful source-available blogging platforms, there were a bunch of others soon after. They all had similarities in functionality, by nature of being blogging software, but they weren't exactly "clones". WordPress was actually a fork of another early blogging software, b2/cafelog. When Six Apart made Movable Type's license more restrictive in 2004, a portion of the userbase jumped over to WordPress. Another thing in WP's favor was ease of hosting, due to being written in PHP, vs Movable Type's Perl. This all led to a lot of momentum for WP; Automattic was founded after that, in 2005.
      - paulgb 6y ago
        Thanks for the context. I wasn’t really involved in WordPress until a few years after, so the early history is foggy to me.
- joejoebags 6y ago
  Also--thanks for going on the record. You are right that you might be criticized in the future by nit-pickers, but it's much more satisfying to take public stances and find out what you're made of (in my opinion).
- pletsch 6y ago
  Big Blue Button is outstanding for any educators looking for tools. Full disclosure that it was built at the school I attended, we had a lot of profs use it and it was by far my favourite way to do distance learning.
- vngzs 6y ago
  I'll name some more, with the same disclaimer: Confluent (Kafka), Redis Labs, Eucalyptus Systems Inc. (AWS clone, acquired by HP), Instructure (Canvas)
JKCalhoun 6y ago
I'm stupid in this space, but as an outsider, is this "the end of an era" because it looks like MapBox is simply pulling the tried and true "bait and switch" which has been around forever. In that regard, "open core" (or open source for that matter) was never a business model — the business model always was bait and switch. Open was the bait. But likely I have always been a little suspicious of "open source" and likely I am now over-simplifying.
- eikenberry 6y ago
  "Open source" was created as a marketing term and companies using it as such shouldn't come as a surprise.
skrtskrt 6y ago
Hashicorp
jayparth 6y ago
Literally tons within the data ecosystem. dbt, Great Expectations, Dagster, Seldon. The list goes on. My employer Tecton has an "open core" called Feast and we are doing great. Mattermost, PostHog also come to mind. Databricks has shown that you don't need a crazy license to win. I disagree with this article from my personal experiences and my industry experience but I respect you writing it. The business model is clearly alive though. Those companies that I listed have raised 100-200M in the past year at high velocities.
- deleted 6y ago
  [deleted]
- lmeyerov 6y ago
  vc $'s may be seriously clouding the analysis here. in terms of revenue justifying big valuations, how many healthy companies are there, really? ("spend $20M to make $3M..." = not healthy) What about ratio of OSS successes vs closed successes, esp w/ efficiency? e.g., the biggest co there is databricks (and i continue to root for them!), and contrast w/ snowflake who started in a similar period, grew 10-20X bigger, and started more simply (get a clone of redshift without doing business w/ aws). worse, databricks took a lot of phd students many years with a lot of big corp funding before the vc's got involved: that's a high bar an oss co must hit vs not for adjacent high-growth spaces. the good news for oss founders is VC's are warming to investing here, and sometimes, even before OSS traction. irrespective of profitability, the founders have a better chance of flipping it to be someone else's problem. not necessarily as clear cut for community-minded co's though that want to be financially healthy for their community. it seems the bigger and more numerous successes are non-oss, and despite the many oss attempts, the big sustainable oss successes have to doubly succeed at what is already hard. If going OSS increased chance of success -- and didn't actively challenge success -- I'd expect relatively more successes by now. I wish all this wasn't so but it's hard to unsee...

TAForObvReasons 6y ago

Based on HN's cheerleading when some projects abandon open source (for example the top comment of https://news.ycombinator.com/item?id=19488642 https://news.ycombinator.com/item?id=19488642 ), the overall trend may be the user base not caring about open source in the same way people cared 5-10 years ago

warpech 6y ago
When we at Handsontable switched to a proprietary license, it wasn't met with much enthusiasm from the existing open source users. But it helped us to get better deals. We invested part of the proceeds in another open source project - HyperFormula. The ideology is still in our blood and we keep the open source circle of life running. But I am happy that this new open source project is not on a collision course with revenue.
- julianmarq 6y ago
  > The ideology is still in our blood and we keep the open source circle of life running. I'm curious about what exactly you mean by these two sentences. Particularly the second one. Is this circle you speak of the one where a company announces an open source product and once the goodwill—that open source development gives it—ensures a number of contributors and early adopters, helping the project grow until the company thinks it's good enough to monetize, at such point they close it down and start charging everyone; then they start a new open source product with the extra money, rinse and repeat?
  - warpech 6y ago
    I hope this does not sound cynical. When we release a new open source project, we are not sure what the project will turn into. We put it out, hoping to get some reaction from the world. If there is no reaction, we will only invest a bare minimum for our own use. When there is some reaction, the community might find its sweet spot. When there is huge enthusiasm, which is the least likely, we might decide to seek ways to invest more and get our returns. Keep in mind that for projects like that, even if they are open source, the vast majority of contributions come from the primary investor. And other contributors can always fork. It is not anything special about open source. For any product, early adopters are almost expected to get hurt or lose interest as the product matures. It's a part of the product's life cycle that's in any startup book. Crossing the chasm is hard not only for the business but also for the original user base. Yet, successful businesses are destined to do it. I am sorry for the ones that become dissappointed, but they too get something out of it along the ride.

gumby 6y ago

> It looked all more like investors created expectations of future revenue and they became cold feet if they could meet those expectations. More likely MongoDB promised future revenue in order to attract those investors and then couldn’t figure out how to get there.

x0x0 6y ago

> In the months before that controversial license change they got plenty of funding from investors. Getting funding from investors sucks. It comes with expectations of growth. Mongo still hasn't turned a profit. To the extent that they are a saas business with saas economics that's common, but still. They clearly read the writing on the wall and declined to fund AWS's R&D costs for free.

infinity0 6y ago

I wish there was a FOSS license with a clause along the lines of: - if your company makes >X revenue a year, give us some of it. Ofc, they (FSF/OSI/DFSG) would have to relax their FOSS definition(s), but with more projects dying in this way hopefully more FOSS organisations will take heed and think about this. Ofc, the wording of the license has to be precise enough to avoid something like fobbing off the servers to technically be controlled by subsidiaries with 0 revenue. Ofc, the license would have to figure out how to share revenue with major contributors too. Contributors already contribute to for-profit open source projects without themselves getting paid, so this license would make the situation strictly better for them.

deleted 6y ago
[deleted]
insertnickname 6y ago
You can write such a license if you want (or hire a lawyer to write it), but it's not FOSS and it never will be. Why is it important to you that such a license is recognized as FOSS?
- infinity0 6y ago
  Like laws, definitions change with changing times and circumstances. I am a Debian Developer and very happy to discuss this with other members of the community. Why is it important to you that such a license is not recognised as FOSS?
  - cycloptic 6y ago
    I can't imagine it would go down well at all with Debian users if random packages (in the free or the nonfree repo) came with clauses saying you now owe royalties to random parties. If you installed 10 packages on your company's server that each ask for 20% royalty, your company now would owe 200% royalties. It would just make the distro unusable by companies.
    - 6y ago