ATO Special Episode on Product Strategy with Elias Voelker
Nov 26, 2024
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Elias Voelker, VP of North America for CheckMK and an expert in IT infrastructure monitoring, shares invaluable insights on product strategy for open source firms. He discusses the crucial distinction between features in open source and commercial versions, stressing that clear differentiation is key to survival. Elias also emphasizes the importance of the 'why now?' question in sales to understand customer readiness. Additionally, he compares cultural sales dynamics between North America and Germany, offering tips for European companies entering the U.S. market.
CheckMK's success hinges on a well-defined product strategy that clearly differentiates features between the open-source project and the commercial version.
Understanding customer motivations through the question 'why now?' is crucial for sales success in the competitive landscape of open-source software.
Deep dives
Understanding the Open Core Business Model
CheckMK operates on an open core business model, offering a free and open-source version called CheckMK Raw, alongside an enterprise version with added support and features. This approach necessitates strategic decisions regarding feature deployment—determining which enhancements should be available in the free version versus the commercial edition. Generally, features that have broad utility are included in all versions, while those that cater specifically to enterprise needs, like integrations with IT service management tools, are reserved for paying customers. Notably, security features are considered essential and are made available across all versions, emphasizing the commitment to user safety.
Navigating Customer Relationships and Competition
In sales discussions, CheckMK often faces unique challenges, particularly competing against their own free product that clients have been using for years. Many customers seek additional support as teams downsize, leading them to consider the commercial offerings that include automation and integration benefits. The key for sales representatives is to uncover the motivations behind the change, assessing whether it's time efficiency, new integration needs, or simply the desire for support. Despite this competition, the company emphasizes a welcoming approach to all users, allowing open-source users to opt-in to commercial services on their own terms.
Strategies for Community Collaboration
Collaboration with the community poses a distinct challenge for open source companies like CheckMK, especially in balancing community contributions with the company's developmental goals. The need for collaboration requires clear guidelines regarding pull requests, ensuring that contributions align with the company’s long-term standards and can be maintained effectively. Providing constructive feedback helps build positive relationships, encouraging future contributions while maintaining quality and direction. This approach has led to increased involvement from senior developers to enhance the community's effectiveness while supporting shared project goals.
In this last special episode of The Business of Open Source recorded at All Things Open, I spoke with Elias Voelker, VP North America for CheckMK. We talked a lot about product strategy; when CheckMK decided that they needed a clear strategy for deciding which feature goes in the open source project and which goes in the commercial version. Elias finished up the conversation by circling back on this issue: As an open source company, if you don't have a big enough difference between the value customers get from project and what they get from the commercial relationship... you won't survive.
Since Elias works in sales, we also talked about sales for open source companies. He said one of the most important questions in the context of open source is “why now?” Since many customers have been using the open source project successfully for years, this question is really important for uncovering what’s changed and why they are ready to buy at the moment.
We also talked about some cultural differences between selling in North America and selling in Germany, since while Elias is German (as is CheckMK), he leads sales in North America and therefore has some advice for European companies moving into the North American market.
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If you’re struggling to figure out your product strategy as an open source company, you might want to consider working with me. I help open source companies figure out how to differentiated themselves in the market, how to differentiate the product from the project and how to take advantage of the opportunities specific to being to a open source company.
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