4 ms·

I am working on a Free Software startup. What I think makes it unique is it caters to an underserved market, and customers in that market usually don't have the

I am working on a Free Software startup. What I think makes it unique is it caters to an underserved market, and customers in that market usually don't have the resources to implement our solutions themselves. Of course, respecting our (potential) customers' freedom and not withholding knowledge means we have to be innovative in areas other than technology such as marketing, sales, and support. And if we cannot keep customers happy, another company can eventually come in and compete with us by offering better service and/or lower prices. Edit: fixed a typo.

davidw 12y ago
> means we have to be innovative in areas other than technology such as marketing, sales, and support. And if we cannot keep customers happy, another company can eventually come in and compete with us by offering better service and/or lower prices. Building a company is hard enough even if things are "simple" in that someone pays for a good or service. It becomes much harder if you have to innovate in multiple ways. That is why it is so difficult to do open source companies.
- ralmidani 12y ago
  Paul Graham advises companies to do things that don't scale: http://paulgraham.com/ds.html http://paulgraham.com/ds.html Respecting your customers and building meaningful relationships with them can, in some industries, be disruptive. For a company truly committed to user/customer Freedom, the respect part should come naturally. And if you view Freedom-respecting technology as being part of an ecosystem rather than something developed in a silo, it is easier to overcome the apparent efficiency and simplicity of the proprietary business model.
  - davidw 12y ago
    "Doing things that don't scale" is great advice for people whose first inclination is to automate everything with code, and not do 'people' stuff. Ultimately, though, you've got to be able to work "on" the business, and not in it, as they say. And that means doing things that "scale" in some sense. If you aim to keep the business small, it means doing things that let you remove yourself from the day-to-day operations of the company.
    - andrewstuart 12y ago
      This is a common misinterpretion IMO of PG's "do things that don't scale" quote. PG is not generally suggesting you should just willy nilly "do things that don't scale" - that would be stupid. He is not generally valuing the concept of unscalable activities. He is saying "build your initial customer base in any way you can, including in ways that aren't scalable but will get you users, and then treat your first users well in ways that would not be practical if you had thousands of millions of users". That's way I read it anyway.
      - vidarh 12y ago
        I think you're right. I see it as how in my first startup, I did phone sales despite being a tech guy, because we had to figure out how to sell our services and wouldn't have known what to tell someone about how to sell them if we didn't. And how all of us took tech support calls because we needed to understand what problems our users had (I learned to troubleshoot Trumpet Winsock setups over the phone "blind" without even once having run the program that way, as we didn't have any Windows machines...) before we could automate things and before we could write better instructions to try to eliminate the problems. It wasn't that anything we did couldn't be scaled - we eventually outsourced our consumer sales, and wrote detailed installation instructions and automated parts of our setup with scripts - but the easiest way of learning how to do that was to do things in ways that couldn't scale first. It also helps you recognise potentials for scaling things that potential competitors may take a long time to realise can be scaled, and that they thus may decide to stay away from because of that belief. I'm deeply asocial, and hates phone calls, but doing phone sales and taking support calls have provided most of the best lessons about customer needs and opportunities I've ever gotten.
mikekchar 12y ago
This is probably my most shared link: http://www.oreilly.com/openbook/opensources/book/tiemans.html http://www.oreilly.com/openbook/opensources/book/tiemans.htm... My favourite quote from that link: "At first I tried to make my argument the way that Stallman made his: on the merits. I would explain how freedom to share would lead to greater innovation at lower cost, greater economies of scale through more open standards, etc., and people would universally respond "It's a great idea, but it will never work, because nobody is going to pay money for free software." After two years of polishing my rhetoric, refining my arguments, and delivering my messages to people who paid for me to fly all over the world, I never got farther than "It's a great idea, but . . .," when I had my second insight: if everybody thinks it's a great idea, it probably is, and if nobody thinks it will work, I'll have no competition!" My favourite free advice (worth what you paid for it): similar to what the original article stated, the "innovation path" is for the gold prospectors going out to make it rich. Trying to make a differentiator and then get paid multiples on your good idea won't work for free software because everybody gets to use your good idea. Free software business models require you to execute at a level higher than anyone else can execute. Usually if you are the person who built that infrastructure, you have an edge, but it really is all about building a viable business, not building crazy software. In that way, I think free software businesses are inherently less risky. Often you don't need VC, because if you can't get people to pay for your services, you are SOL anyway. From your short message, you seem to understand this. I wish you good luck!
- bjelkeman-again 12y ago
  An interesting aspect of the discussion here is that the opinion is that there seems to be only a few options for funding an open source organisation: venture funded or organic growth. Venture funded is challenging, as it is all about gold digging. Organic growth is generally a slow and hard path. If you have other goals than just money, there is actually quite a lot of opportunity to work on open source software, with viable business models and interesting things to work on.

davidw 12y ago

> means we have to be innovative in areas other than technology such as marketing, sales, and support. And if we cannot keep customers happy, another company can eventually come in and compete with us by offering better service and/or lower prices. Building a company is hard enough even if things are "simple" in that someone pays for a good or service. It becomes much harder if you have to innovate in multiple ways. That is why it is so difficult to do open source companies.

ralmidani 12y ago
Paul Graham advises companies to do things that don't scale: http://paulgraham.com/ds.html http://paulgraham.com/ds.html Respecting your customers and building meaningful relationships with them can, in some industries, be disruptive. For a company truly committed to user/customer Freedom, the respect part should come naturally. And if you view Freedom-respecting technology as being part of an ecosystem rather than something developed in a silo, it is easier to overcome the apparent efficiency and simplicity of the proprietary business model.
- davidw 12y ago
  "Doing things that don't scale" is great advice for people whose first inclination is to automate everything with code, and not do 'people' stuff. Ultimately, though, you've got to be able to work "on" the business, and not in it, as they say. And that means doing things that "scale" in some sense. If you aim to keep the business small, it means doing things that let you remove yourself from the day-to-day operations of the company.
  - andrewstuart 12y ago
    This is a common misinterpretion IMO of PG's "do things that don't scale" quote. PG is not generally suggesting you should just willy nilly "do things that don't scale" - that would be stupid. He is not generally valuing the concept of unscalable activities. He is saying "build your initial customer base in any way you can, including in ways that aren't scalable but will get you users, and then treat your first users well in ways that would not be practical if you had thousands of millions of users". That's way I read it anyway.
    - vidarh 12y ago
      I think you're right. I see it as how in my first startup, I did phone sales despite being a tech guy, because we had to figure out how to sell our services and wouldn't have known what to tell someone about how to sell them if we didn't. And how all of us took tech support calls because we needed to understand what problems our users had (I learned to troubleshoot Trumpet Winsock setups over the phone "blind" without even once having run the program that way, as we didn't have any Windows machines...) before we could automate things and before we could write better instructions to try to eliminate the problems. It wasn't that anything we did couldn't be scaled - we eventually outsourced our consumer sales, and wrote detailed installation instructions and automated parts of our setup with scripts - but the easiest way of learning how to do that was to do things in ways that couldn't scale first. It also helps you recognise potentials for scaling things that potential competitors may take a long time to realise can be scaled, and that they thus may decide to stay away from because of that belief. I'm deeply asocial, and hates phone calls, but doing phone sales and taking support calls have provided most of the best lessons about customer needs and opportunities I've ever gotten.

mikekchar 12y ago

This is probably my most shared link: http://www.oreilly.com/openbook/opensources/book/tiemans.html http://www.oreilly.com/openbook/opensources/book/tiemans.htm... My favourite quote from that link: "At first I tried to make my argument the way that Stallman made his: on the merits. I would explain how freedom to share would lead to greater innovation at lower cost, greater economies of scale through more open standards, etc., and people would universally respond "It's a great idea, but it will never work, because nobody is going to pay money for free software." After two years of polishing my rhetoric, refining my arguments, and delivering my messages to people who paid for me to fly all over the world, I never got farther than "It's a great idea, but . . .," when I had my second insight: if everybody thinks it's a great idea, it probably is, and if nobody thinks it will work, I'll have no competition!" My favourite free advice (worth what you paid for it): similar to what the original article stated, the "innovation path" is for the gold prospectors going out to make it rich. Trying to make a differentiator and then get paid multiples on your good idea won't work for free software because everybody gets to use your good idea. Free software business models require you to execute at a level higher than anyone else can execute. Usually if you are the person who built that infrastructure, you have an edge, but it really is all about building a viable business, not building crazy software. In that way, I think free software businesses are inherently less risky. Often you don't need VC, because if you can't get people to pay for your services, you are SOL anyway. From your short message, you seem to understand this. I wish you good luck!

bjelkeman-again 12y ago
An interesting aspect of the discussion here is that the opinion is that there seems to be only a few options for funding an open source organisation: venture funded or organic growth. Venture funded is challenging, as it is all about gold digging. Organic growth is generally a slow and hard path. If you have other goals than just money, there is actually quite a lot of opportunity to work on open source software, with viable business models and interesting things to work on.