I'm all for open source software but this feels like an awfully contrived way to make a profitable business.
18-36 months between each stage? This feels perhaps tenable for VC backed corps but for anyone bootstrapped, this is a long, long road.
I'm not remotely convinced that these steps feed into each other in a more pragmatic way than... I guess any other way? Couldn't you start with enterprise sales and move backwards, releasing your stuff as OSS once you're running a stable business?
The thesis seems to be that without community and a proven track record, you can't make money organically, which is patently false and proven by hundreds of businesses that don't have OSS/communities. Also, SaaS seems tangential to Enterprise sales in many cases, they're often times different segments (i.e. I won't consider your SaaS since I must be on-prem) -- if you only serve one segment, you're only missing out on the other segment, not cannibalizing? This is all hand-wavey of course, but I posit that this is a way to maybe build an open source business, but I'm not sure it's a solid, proven recipe by any means.
Maybe once Ockam knocks it out of the park in their IPO we can look back on this with greater confidence.
I run a company that organically reached self service SaaS and inside sales. We make borerline developer tools and an open source strategy is very tempting because selling horizontally (Not to a specific vertical) is really hard. Here's a long rant on my thinking about this ( a topic that's been on my mind a lot)
In our case, we make NLP tools, loads of companies have text and data scientists and our tools should be a good fit. But during a potential customers development journey, the buying window is small, they need to know they have the problem we solve, know about us and also not have found or planned an alternative solution yet.
That in turn makes things hard, because often times potential customers come to us too early in their journey to derive value from our product (we make sense when you have N>3 people doing stuff). It makes onboarding and first impressions really hard, because the user knows they might need this one day but isn't in a state to reach wow right now and leaves with an underwhelming first impression.
Open source is very tempting because it looks like it can circumvent those problems. The entry point into an organization becomes the mind of developers and practitioners (as opposed to our slightly more senior buying persona).
The aha moment for that persona is different, and because the persona is a developer and the product is a developer tool the aha moment is easier to convey in an open source setting.
Said differently, in developer tools the buying persona and user persona are different. Often you can reach the using persona but targeting the buyer from day 1 will lead to underwhelming results. Open source let's you capture the minds and hearts of your users, which god willing, will champion your product to the buying persona of the org.
I completely agree with the buyer v user persona distinction. If I were on a podcast and someone flipped a coin...heads I argue that Ockam is a B2C company, tails I argue that Ockam is a B2B company - I could do both.
"Freemium" is a good product model in this case, regardless of the OSS part, because "freemium" isn't a pricing model, it's a customer acquisition strategy.
Thanks for the note and for partaking in this discussion!
The intent of this post was to share our route. There are all sorts of routes to multiple destinations. This is the flight plan we are choosing for our specific objectives.
IMO very few things our zero-sum. Just because we pick this path doesn't mean that others are wrong or invalid. This route is based on my past experiences, which heavily influence my assumptions.
18-36 months between each stage? This feels perhaps tenable for VC backed corps but for anyone bootstrapped, this is a long, long road.
I'm not remotely convinced that these steps feed into each other in a more pragmatic way than... I guess any other way? Couldn't you start with enterprise sales and move backwards, releasing your stuff as OSS once you're running a stable business?
The thesis seems to be that without community and a proven track record, you can't make money organically, which is patently false and proven by hundreds of businesses that don't have OSS/communities. Also, SaaS seems tangential to Enterprise sales in many cases, they're often times different segments (i.e. I won't consider your SaaS since I must be on-prem) -- if you only serve one segment, you're only missing out on the other segment, not cannibalizing? This is all hand-wavey of course, but I posit that this is a way to maybe build an open source business, but I'm not sure it's a solid, proven recipe by any means.
Maybe once Ockam knocks it out of the park in their IPO we can look back on this with greater confidence.