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It's true that free software is eating into everyone's margins, especially unsustainable business models that run entirely by burning cash and continually raisi

It's true that free software is eating into everyone's margins, especially unsustainable business models that run entirely by burning cash and continually raising more and more money in hopes a giant will come and swoop it off it's feet. However, I think there's a problem with attempting to take the assumptions from macro view and drilling it to individual companies and startups. Plenty of awful software with awful websites sell like hot cakes. The age of these companies are ancient, started in mid 90s to mostly early 2000s. The people buying their software don't know what open source is, rather if they see something as free, these are the type of people that think there's something wrong with it. By the articles explanation, they shouldn't exist or they should be fending off attacks from left and right but in reality, the software part of business is actually very small. The fact is, it's a business and the people that make up the customer base. So while it is true that some industries may face fierce competition from "free software" it varies from a spectrum where one end is little to no innovative destruction mostly because of the customers to the other end which this article talks mostly about where ALL software companies are threat. There are still industries where the establishment form coalition and invent complicated "industry standards" to prevent anymore innovation happening. These are business strategies aimed to raise the cost of entry among other tactics that's harmful for the industry but great for the stakeholders. Having said that, the article isn't without merits, there are some very important truths in there. Like almost all advices, take it with a grain of salt.

nickpsecurity 11y ago
WinRAR was a good example. There were free utilities to compress files. Yet, theirs had better interface, features, and performance. The file splitting feature was particularly compelling when dialup, floppies, and CD-R's were common. So, people kept buying them. They've declined quite a bit and we have excellent alternatives such as 7-Zip today. Yet, the product is still selling because they do a job well for a reasonable price.
- x5n1 11y ago
  That's the thing about reading articles like these, they are massive generalizations that apply to big league players. There are still plenty of opportunities to be had for many other players.
  - nickpsecurity 11y ago
    That's my take. Funny that it attracts agreement on HN despite counterexamples showing up here regularly. Last one was AeroFS: a private, safer Dropbox for a monthly fee. At the moment, that one use case can (and probably does) have dozens of successful vendors whose sales teams were first to get to customer. Once deployed, they're usually hesitant to switch and have related requirements. That's both increased odds of long-term revenue plus opportunity for profitable, custom work. That's just one out of a zillion scenarios where potential customer is unlikely to use FOSS or "The Cloud." There's also several attributes outside cost and some business models that almost nobody is pushing hard in software industry like we saw in other industries. Especially retail, which adapted like crazy all over. Anyone spotting these and jumping on them in the right way might make a killing.

nickpsecurity 11y ago

WinRAR was a good example. There were free utilities to compress files. Yet, theirs had better interface, features, and performance. The file splitting feature was particularly compelling when dialup, floppies, and CD-R's were common. So, people kept buying them. They've declined quite a bit and we have excellent alternatives such as 7-Zip today. Yet, the product is still selling because they do a job well for a reasonable price.

x5n1 11y ago
That's the thing about reading articles like these, they are massive generalizations that apply to big league players. There are still plenty of opportunities to be had for many other players.
- nickpsecurity 11y ago
  That's my take. Funny that it attracts agreement on HN despite counterexamples showing up here regularly. Last one was AeroFS: a private, safer Dropbox for a monthly fee. At the moment, that one use case can (and probably does) have dozens of successful vendors whose sales teams were first to get to customer. Once deployed, they're usually hesitant to switch and have related requirements. That's both increased odds of long-term revenue plus opportunity for profitable, custom work. That's just one out of a zillion scenarios where potential customer is unlikely to use FOSS or "The Cloud." There's also several attributes outside cost and some business models that almost nobody is pushing hard in software industry like we saw in other industries. Especially retail, which adapted like crazy all over. Anyone spotting these and jumping on them in the right way might make a killing.