American history is rife with success stories. History books, classrooms and the media are full of stories of people and businesses who have achieved great wealth and renown through their own sweat and tears. However, with the advancement of Internet technology, businesses of a nontraditional nature have emerged, and the “business” of shared knowledge has taken on new meaning. Open-source software projects are becoming full-time businesses of their own. Despite the emphasis on freely shared source code, project leaders and their communities are finding themselves increasingly reliant on traditional business models to sustain their projects and users. A new generation of enterprising people is faced with the challenge of applying successful business practices in new and innovative ways to turn their open-source projects into success stories of their own.
The Business of Open Source
The Business of Open Source
Open Source: Making Success Your Biggest Problem
Open Source: Step Back for Progress
Open Source vs. Business
At the beginning of any project is the idea, and whoever thinks of that idea is usually strapped with seeing it through to fruition. The leader of any open-source project will say that the beginning is lonely. With luck, there might be a partnership established early on to help share the workload, but more than likely the majority will fall on the person responsible for initiating the project. Very few have the resources to quit their day jobs, so an immense amount of work needs to be done on personal time. Relaxation, personal interests and even personal relationships may fall by the wayside for a time until the project is well established. This alone is often enough to halt a promising project before it has really begun. Few are willing to put in the hours, and few possess the diligence to see the project through. In time, however, successful project leaders are able to find a balance. A community takes shape, contributors come on board, and the project leader begins to reap the rewards of endless hours spent writing code by candlelight while the rest of the world slept snug in their beds.
Once a project really takes shape and contributors begin aiding its growth, the project leader often finds a new dilemma to face: finances. Eventually, everything comes down to money. If the project is really going to flourish, it’s going to need full-time attention. This is the point of no return for the open-source project: Will the project continue as is, or does a business need to be built around it? Is the project going to be forced to become a product? Some turn toward a dual-licensing approach, meaning that the product is free for personal use, but a licensing fee must be paid for commercial use. For many, a compromise has been made by building a business related to an open-source project. The open-source project remains free, while the business associated with it helps fund its growth. In either instance, a business approach is implemented. At first, the only full-time employee on staff may be the project leader; however, as the project grows, the leader will be faced with running a full-fledged business. That means making an early distinction between want and need. It’s far too easy to take the profit and run, but it’s vital that caution be exercised. The project leader must consider himself an employee, and pay himself accordingly. No company would ever pay its employees all its earnings. Progress is often unsteady, and one profitable year may be negated by the next year. If the project leader chooses to make the open source-related business his full-time career, he must carefully determine how much he needs to pay himself, and pay himself only that.
More on Open Source
ABC: An Introduction to Open Source
Free Code for Sale: The New Business of Open Source
The Enterprise Committer: When Your Employee Develops
Open-Source Code on the Company Payroll
In the meantime, take advantage of the free resources available to the open-source community while becoming educated about business ownership. The open-source community itself is an excellent supporter, and its viral atmosphere is a great tool for word-of-mouth advertising and spreading information. A number of free-distribution sources also exist, including SourceForge, Freshmeat and Newsforge, which will help others learn about and access projects. As the project and business grow, take the time to become educated on tax laws. Become an expert on tax shelters and reinvesting in the business to keep the funds where they’re needed. Outsourcing is also a viable option for cutting costs. When nonessential tasks are performed by others who can do so more efficiently, the business profits through saved time and resources, allowing mission-critical tasks more time and attention.
If an open-source project and its associated business are successful, growth is inevitable. Many take growth for granted, simply assuming it’s a good thing; however, if not wisely managed, too much growth can be the beginning of the end. Care must be taken to ensure that the business doesn’t outgrow itself, lest both the business and the project it helps support get left behind. The best approach is to allow both the project and the business to grow organically. As demand increases, increase the offerings and features available, and increase the size of the business accordingly. The worst thing for a business is finding that quality has been sacrificed, and this will quickly occur if growth isn’t kept in check. Don’t be overtaken by the excitement generated by interest and new users. A slow, steady approach is more manageable and sustainable.
Once steady growth is established, new employees will come on board; hire only as many as are necessary. Employees are people, with families and lives of their own. An employer has an obligation to its employees to do everything in its power to provide steady, gainful employment. Resources will need to be spent on adequate training, time will need to be spent answering endless questions, and management will need to continually evolve to meet the unique needs and situations each new employee brings. Be patient. Eventually, employees will come into their own. Unfortunately, new tasks, the ones the project/business leader didn’t have time for before the employees were hired, will now demand attention. The workload never really decreases; it just changes.
Financial stability. Sustainable growth. Talent pool. It seems success has been reached. Beware. Success is one of the biggest contradictions in the English language. One person’s success is another’s failure. Why? Because success is subjective, and very few are actually equipped to handle it. Success means more respect, and often more money. Along with that comes more responsibility, and sometimes an inflated ego. It’s easy to lose sight of the initial goal and become solely profit oriented, often hurting others in the process. Success also means the ability to fail; after all, everything that goes up must come down. One business’s failure leads the way for others to profit. A good dose of humility is more valuable than many realize. While everyone wants to be successful, take a moment to define it. It’s possible that “success” has more than one definition that will evolve along with the business. Maintain a practical approach that allows for growth while maintaining stability to avoid the pitfalls of success.
The beginning of every business is a gamble. While exciting, it’s also work intensive and stressful. Be realistic about the commitment involved, move forward cautiously, and keep a straight head about success. Most of all, be flexible. Growth means change, and without it nothing would advance. History’s success stories aren’t fairy tales. Take a good look at them and notice that each contains two stories: the obstacles, and then the success. Without obstacles, one loses sight of the goal. Keep that goal in sight, and enjoy the ride. Success can always come later.
JT Smith is a renowned open source guru and the president of Plain Black Corp., the developer and distributor of the WebGUI Content Engine. He speaks internationally on topics related to Web content management.