Making the Critical Pivot from Closed to Open Source with Federico Wengi

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Jan 31, 2024

Federico Wengi, Partner at SquareOne VC, talks about the uncommon pivot from closed to open source strategy. He shares the challenges businesses face and gives an example of a successful pivot. Open source won't solve all problems, but it's worth considering for change. They discuss the importance of discussing closed source decisions and the challenges of monetization and differentiation in open source. Valuable advice is shared for founders considering going open source and enhancing a product's unique selling proposition. The concept of open source companies providing free functionalities is explored using the example of Cal.com.

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ANECDOTE

Company Pivoted To Open Source

A company opened its core product to address lack of uniqueness and to unlock new use cases through open source.
This pivot aimed to disrupt competitors and develop new revenue-driving features on top of the open core code.

ADVICE

Prepare Thoroughly for Open Source

Before open sourcing, clean your code, remove secrets, verify ownership, and pick the right license.
Prepare clear community engagement and marketing to launch successfully; open source is not just a code dump.

ADVICE

Monetization and Community are Key

Have a clear monetization vision when open sourcing to maintain motivation throughout the process.
Invest effort in kickstarting the community; publishing code alone doesn't ensure engagement.

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Today I’m joined by Federico Wengi, who is a Partner at SquareOne VC. In this conversation, Federico sheds light on the conversations he’s had with many companies who consider making the pivot from a closed-source business strategy to an open-source strategy. Federico explains why it’s so uncommon for businesses to make that pivot, and lays out the challenges businesses face when they consider taking on such a change. Federico also gives a great example of a company that did successfully complete the pivot to open source, and the choices they made that led to their success. Federico and I discuss why this is one pivot you can’t take back, and also why it won’t solve all your problems. Despite all that, Federico shares his optimism for the value of open source and the importance of at least considering this strategy when you need to make a change.

Highlights:

Intro (00:00)
I introduce Federico, who is a Partner at SquareOne (00:59)
Federico describes his role at SquareOne and the areas of investment they focus on (01:28)
What Federico typically sees when companies move from closed source to open source (04:42)
How important conversations come up about business strategy and open source versus closed source (07:40)
Why many companies end up not pursuing an open-source strategy (11:17)
Federico tells the story of a company he worked with that made the leap from closed source to open source (15:03)
The most critical things businesses have to do in order to utilize an open-source strategy (16:23)
What decisions led to success in the company Federico helped shift from closed source to open source (18:09)
The psychological challenges leaders face when considering making a pivot to open source (23:54)
Federico shares the advice he would give to a founder who’s considering an open-source strategy (26:40)
How you can connect with Federico (31:40)

Links:

Federico

LinkedIn: https://www.linkedin.com/in/federicowengi/
Twitter: https://twitter.com/federicowengi
Company: https://squareone.vc/