Open Source Benefits & Challenges

Startup Benefits of Going Open Source

1. Community: Get feedback on what works and what doesn't. Create a direct line that has feedback to integrated back. Have collaborators working on their product before they join the company. Promoting work through public events: government officials, researchers and received government grants to finance the launch of the platform to the public.

2. User Growth: The use cost is typically lower than with proprietary equivalents. As software use cost < proprietary software use cost. This greatly expands access among those who do not have desire to pay:

   • Expanded access means customer goodwill
   • Prevents vendor lock-in: They may have information that is stored in file only compatible with that software. If users need a feature or customization:
     • Difficult or impossible to convince proprietary vendor
     • With open source, customers can create their own customizations or request help from the community
     • Direct and transparent user feedback

3. Talent Acquisition: Community-oriented nature of open source

   • Prior knowledge of the most talented candidates
   • Opportunity to review freely available OS code created by candidates
   • Opportunity for candidates to review your products as well
   • Open source is a powerful recruiting
     • Their open source programming, Facebook's open source software program positively contributed to working at Facebook
     • Onboarding is easier, staff is already familiar
   • High licensing fees: with open source, you can pick it up and learn a new technology, creating well-rounded developers to understand the whole developer stack. It is also important to use open source, but what to do with that.
   • Cost-effectiveness and optimization
   • Wide range of high-quality solutions in OS repositories
   • Account management solutions available in OS repositories (use OpenSSL toolkit for password protection)
   • Community standards mean high readability in OS code (must be clean and must be understood for all developers)
   • You could save as much as it costs to develop the software you need to build on top of. Due to high costs of proprietary software development (mostly from developer salaries and company infrastructure), it can actually save you quite a bit of money to use an open source base. For example, financial tech firm Pendo Systems saved $500K by using an open source calculation engine instead of developing their own proprietary version.

Challenges of Open Source Strategy

1. Community Maintenance: Network effect, which when is a product or service is better when there is a larger community using it. If the problem is not a common one, or pioneering something completely new, it's hard to find people onboard. It takes a long time to market, especially in places where open source isn't popular in your area.

   • More information is provided in Community Building section of this guide
   • Corporate communities: How to contribute from outside your team, in meetings you can have all the same team members in one room, and other meetings in other rooms, really need to think of flattening the teams of all developers and giving the same level of involvement in participatory meetings.

2. Customer Support: Some open source software (OSS)  doesn’t have documentation. As with a licensed proprietary software, sometimes it stops being maintained altogether. Whether to use OSS yourself and base your market strategy off it, it's best to think about:

   • How to ensure that there are active forums devoted to the software
   • How to ensure that you can provide continuous user support (don't want to grow the user base, and stop supporting them if you move on).
   • Is there a single financial backer of communities?: sometimes the communities focus on technical completeness and neglect technical documentation. Using Software as a Service (SaaS) strategy to establish an infrastructure for customer support.

3. Development costs (for OSS): Building and maintenance costs for OS are usually equal to those of proprietary software. Diverse sources of funding are available, especially for OS products for humanitarian purposes.

   • How can I convince an investor that my company, which would be giving software away for free, has any value worth investing in?
     • Convince people that it's not as risky as many believe, it's the expertise and the know-how that is more important than the open source code.
     • It's the collaboration in the work in development
     • Great feedback on the product, which you wouldn't know, if the product wasn't open source

4. Increased Complexity: with many contributors than just one person/team can build, it may be difficult for 1 person to understand all the pieces of it.

   • This is intimidating because the complexity may make group collaboration more difficult
   • There may be a need to invest a lot of time and effort to learn the open source development aspects (i.e., how to code, use, and then contribute to it).