Should I open source this project? If so, how do I do it successfully? A presentation explaining fundamental principles behind open source business models. For a prose accompaniment, see https://community.redhat.com/blog/2018/04/crafting-an-open-source-product-strategy/

2. RED HAT IS AN OPEN SOURCE COMPANY
We build Enterprise products from Open Source projects

3. We should open source XWidget
Why?
Because… we want a community
Why?
Because… community is good!

4. What is your goal?
Finding the “why”

5. Open Source is not a business model!
Open Source is:
● A way of developing software collaboratively
● A distribution mechanism that lowers cost of acquisition

6. Development model
● Enables collaboration with
others
● Lowers cost of engaging with
potential partners

7. Distribution model
● “Free” minimizes barrier to
adoption
● Allows small start-ups to “punch
above their weight”

8. The Economics of Open Source
3 basic microeconomic principles, and how they apply to open source business models

9. Economics 101: Demand Curve
● As price goes down, demand
increases (for most goods)
● Price includes money, time,
skills, ...

10. Economics 101: Substitute goods
● As price of a good goes
down, demand for its
substitutes goes down
● Open source can be used as
a competitive weapon
against expensive
alternatives
● Incumbents can be slow to
adapt - Innovator’s Dilemma
applies

11. Economics 101: Complementary goods
● As price for a good drops,
demand for its complements
goes up
● Open source business models
depend on finding compelling
complements

12. Strategic motivations to open
source
Understanding what you want to achieve

13. Strategic goals
● Increase sales of complements
○ Services, consulting
○ Other products (hardware, software, certified 3rd party software)
○ Subscriptions, ongoing support
○ Exchanging time for money (integrated solutions)
● Leverage wide adoption for adjacent goal
○ Encouraging adoption of standard
○ Drive market towards an ecosystem
○ Facilitate ecosystem engagement
○ Shared undifferentiated heavy lifting

14. Strategic goals (2)
● Adjacent market development
○ Seed new market segment/market education
○ “Paradigm shift” - change practices
○ Portfolio adoption - “foot in the door”

15. Defining and communicating strategy

16. Stakeholder identification
● Constituencies include engineering, product management, sales, support,
legal, brand, security teams, …
● Identify at least one key representative from each constituency
● Growing concentric circles

17. “Surprise is the opposite of engagement”
John Lilly, former CEO of Mozilla

18. Understand the Big Picture
● Start broad, work in
○ Organization
○ Product/market segment
○ Project
● Map the space
○ Competitors
○ Partners
○ Dependencies

19. Target audience
● Who will download and use the project?
● Who will buy the product?
● What problems do they have?
● Who do these people listen to?

20. Tailor a symbiotic relationship
● More precisely: mutualist
● Identify how project success feeds
product success, and vice versa
● Example: “Project creates popular
extension platform, and company
then enters into commercial
relationship with extension authors
to add value to product”

21. Differentiating between strategy and tactics
Strategy:
● Gain control of the center
● Mobile major pieces
● King-side attack
Tactics:
● “Fianchetto the King’s Bishop”
● Doubling the rooks
● “Sicilian defense”

22. In software: Strategy vs tactics
Strategy:
● Leverage open source to create ecosystem/extensions community
● Offer integration and certification for product customers of best
extensions
Tactics:
● Focus on growing user community
● Documentation for using APIs and creating extensions highest priority
● Medium- and High-Touch partner recruitment

23. Understanding and communicating strategy
● Strategy should be expressed in one sentence, explained in one page
○ Example: “RDO will dramatically grow the number of OpenStack users
on the Red Hat family of operating systems, showcase Red Hat’s work
in OpenStack, and create a center of gravity for OpenStack users on
CentOS”
● Create a mantra
○ Example: “Demonstrating the value of a Cloud Management Platform”
(ManageIQ)
● The strategy should affect action - trade-offs, budgeting decisions, feature
roadmap

24. Mapping strategy to action
Achieving objectives and tracking progress

25. Mapping the user journey
● Target audience
● First contact, adoption
● Engagement
● Retention
This is identical to a sales funnel

26. New user experience is critical
● First time experience
○ 15 minutes to “Hello, World!”
○ Prerequisites (knowledge, hardware, software)
● New user documentation, learning paths
● Troubleshooting experience

27. Defining goals

28. Be careful what you measure

29. Pivot in changing circumstances
● Circumstances change, your strategy should be able to change too
● Unintended consequences can be threats or opportunities
● Annual gut-check, executive review

30. Related talks
Title Speaker(s) Time, Place
How to Open Source an Internal Project VM Brasseur Today, 4:30pm, Kenwood 1
The Challenges of Creating a Sustainable Open
Source Business Model
Hasseb Akhtar, Chris Price Today, 5:10pm, Kenwood 1
Building Authentic Communities: Upholding
Developer Values while Delivering Customer
Value
Leslie Hawthorn Today, 5:10pm, Sonoma
Valley
Is there an Open Source Business Model: YES or
NO?
Jeffrey Borek, Stephen Walli Wednesday, 2:40pm,
Kenwood 2
The Ansible Project: A Case Study in Modularity
and Community
Robyn Bergeron Wednesday, 3:40pm,
Kenwood 1

31. In summary
1. Identify key stakeholders
2. Find your “why”
3. Measure progress towards success
4. Be prepared to adapt