Open Source Startup Podcast

Emily Omier, Positioning Consultant for Commercial Open-Source Companies 2:53: Emily discusses the positioning of the 2 products OSS companies have: the OSS product & the paid product  5:30: Emily talks about her process & how she interacts with ‘super users’ to understand what they use the project for (hint: it’s often not what the project owner had in mind) 8:02: Emily digs into competition and how most OSS startups are competing with a manual process vs. other companies 10:09: The hard parts about positioning an OSS startup are discussed: resource challenges, focus, and engineers as challenging buyers 14:36: Emily talks about common mistakes OSS companies make 18:54: We dig into the right team set-up for OSS companies 21:10: Emily talks about the key areas OSS companies should think about when coming up with their positioning: expectations on what the product does and does not contain, expectations on related tools, competitors, and target users (type of app, workload, product, use case, etc.) 35:45: We talk about monetization and how to think about targeting the right customers 37:50: Emily ends on advice for early-stage OSS founders: don’t try to create a completely new category, bring well-understood concepts together, and position as the best option for a small market early-on

Joe Beda, Founder & CTO, Heptio 2:00: Developing the Kubernetes project at Google & deciding to open-source it 4:48: The origins of Heptio & building a company around Kubernetes 13:29: Open-source business models & 'open extensibility' as the new model 24:36: Scaling open-source businesses: metrics to track & interacting with the community 31:55: Good areas for successful open-source products & advice for founders

Joe Duffy, Founder & CEO, Pulumi 1:17 - Background on Joe & Pulumi - the company was started to give infra engineers tools to help them innovate faster. 3:05 - Why OS as a core part of Pulumi’s strategy - getting community buy-in was important as it created trust and authenticity. Joe also saw the power of open source when he was at Microsoft and they started exploring an OS strategy. 5:29 - Pulumi launched as a company and OS project at the same time. The benefit of this was they could be thoughtful about the business model from the get-go instead of it being an afterthought. 9:53 - The SaaS attach rate was insanely high - 2/3 adopted the SaaS. It was the default experience that developers opted out of if they wanted to. The business model was close to what AWS offers - a full managed service. 12:13 - Finding product-market fit with the OS project and business at the same time was tricky. It took over a year to release the OS project, however they had their first paying customer before they open-sourced anything. 14:28 - They decided to charge for enterprise features only (identity, policy enforcement, webhooks, team management, etc.). 20:25 - When measuring the health of the open-source, they focused on engagement over growth metrics. They wanted end users to be really successful. Joe continues to be baffled about investor conversations that center on stars - it’s one light measure of momentum but there are much stronger signals around health from Stack Overflow, Hacker News, Reddit, etc.  25:20 - Joe took on the role of the developer advocate himself early on. In fact, he did parts of every function before hiring for them to make sure he understood all parts of the business.  26:53 - In raising money for an OS company, focusing on typical SaaS metrics as well as OS metrics is important. Both need to be worked on in tandem. 28:55 - Early on, the focus was on building the OS community over the SaaS product. The ratio was 10:1 for people working on the OS vs. SaaS. 31:10 - Advice Joe has for OS founders - don’t sweat monetization too soon as once it’s introduced it averts focus away from top of funnel OS growth. 33:05 - Joe wishes investors understood developers more. They’re a tough group to make happy and the tech changes rapidly. It’s not just about momentum metrics but solving big problems for the community (TensorFlow is a good example). 35:08 - Joe’s final piece of advice is focus on making developers happy and starting in a niche vs. making a solution too broad at the start. 

Max Schireson, prev. CEO, MongoDB 1:20: Max started his career at Oracle where he became frustrated with the limitations of relational databases. He then moved to MarkLogic where he discovered XML databases and the flexibility of that format got him excited about the potential for new databases. From there, he moved to MongoDB as CEO just as NoSQL started to take off. There, he was exposed to the distribution potential of open-source. With an open-source business, people used your product well before you sold it to them. The company was very early when he joined. There were 20 employees and $10Ks - $100Ks of revenue. However, they already had a fair amount of open-source adoption. 7:40: Technical support became incredibly challenging at MongoDB since users were so sophisticated. 11:50: The transition away from support as a business model was necessary as users were finding fewer issues with the product. Max walks through the shift towards an open core model bifurcating free and paid functionality.  13:40: Deciding between paid and unpaid features was challenging. They discovered that paid features were good for operating at scale, and while they could have made more money by charging for additional support, they felt that having the best free open-source product on the market should take priority.  17:50: They didn't focus on stars as a core metric as it is only a rough measure of momentum. Instead, they focused on things like Google Trends (how often people searched for MongoDB), how often someone would put MongoDB on their LinkedIn as a skill, and if MongoDB was posted on Indeed in job recs. 22:20: Marketing and community came in the form of grassroots efforts and informal presentations. These included 'Mongo Days' where they organized engineering events across the country. Developers liked the honest and genuine nature of how MongoDB was sold to them with the sales team using phrases like “people use Mongo because the alternatives suck”. 25:30: MongoDB used an incremental approach to monetization (support then additional product functionality). They could have prioritized monetizing more sooner but instead focused efforts on the open-source. 27:15: A piece of advice from Max to open-source founders: focus on production workflows for monetization where you'll see real volume. 29:50: Open-source works best in a cloud delivery model. If someone downloads your open-source and uses it on-prem, it’s hard to track and fix issues since you don’t know who all is using the software (in a cloud model, you can fix issues for everyone at the same time). 32:05: Open-source can be seen as just a distribution method, but cloud products can have other great distribution methods. 36:15: A common mistake when building an open-source company is focusing on open-source adoption OR monetization instead of both.  38:20: Open-source licenses are important to protect your IP. MongoDB had a specific license that restricted how developers could use the product, which was risky since it added friction, but it didn’t end up hurting adoption for them.  43:10: At MongoDB, the greatest ‘growth hack’ was having a great product experience from the get-go; implementation was quick and users saw value very early.

Marco Palladino, Co-founder & CTO, Kong 0:50: Kong's origin story 5:48: How Kong’s underlying open source project generated early adoption 9:37: Shifting from open source adoption to commercialization 16:09: What enterprise features Kong prioritized building first 21:37: Hiring the early team balancing open-source and commercialization expertise 24:48: How to think about protecting your open-source IP 30:00: Marco's advice for open-source project owners who want to start a company

Todd Persen, Co-founder & CEO, Era Software (prev. Co-founder & CTO, InfluxData)  In this episode, we'll dig into the InfluxData founding story as well as Todd's decision to make his new company, EraDB, closed source. We'll also discuss the metrics to determine if an open-source project is a success, what features users will pay for, and the benefits (and drawbacks) of having an open-source component at a startup.