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Comment by hdkekbro | Hacker News Reader

Who are these imaginary foes who are presenting their business model to investors with simply the words “Open Source” on a single slide?

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Early stage investor here. You’d be shocked. It’s extremely en vogue to start a company and have your value prop be “open source alternative to X,” without any regard for whether there is actually any logic to something being open source.

As an early stage investor do you outright reject "open source" projects or would you consider one that's already making some money? I've never considered putting it this way but I guess you could say the project I maintain is an `"open source" alternative to a specific Twillio product` and MRR is showing steady/strong growth. But being a solo maintainer is seeming to be a strike against me (ahem yc).

What are early stage investors' criteria for open source, in your opinion?

> Do you outright reject "open source" projects ... ?

No! I'm bullish on open source, I just think the current climate is weird. I have a small vc fund, currently 8 portfolio companies and almost half have at least some open source element to their product offering. I'd definitely look at something you're describing, and the fact that you're seeing steady MRR growth is a huge accomplishment, regardless of whether you ever choose to take vc money.

Happy to have a discussion on the topic if helpful, don't feel the need to be in sales mode. You can hit me up if interested: taylor at abstraction.vc

Awesome will reach out thanks.

If you look at it from the input-output financial perspective, where the effort in open sourcing it produces X amount of money, I'd agree its not viable. But if you look at it from the advertising perspective, there are other advantages:

- Appeal to potential employees for their exposure boost

- External contributors to fix minor bugs and do testing, along with online presence

- Availability after the entities maintaining it goes defunct. With any luck if the project has gained some momentum other companies will also have programmers using/wanting to maintain the same thing

- Free to 'on board' or filter candidates even before hiring

So I'd view it as a kind of branding strategy, helping spread good optics for the business. This in turn makes a system where it increases the pool of potential employees and external user support.

I was thinking about this recently. Everyone wants to replicate the success of Mattermost.

I think the reason Mattermost works is because the customer is an IT department. When you get outside IT, the value prop completely vanishes. Regular people buying software don’t know what open source is.

For every Mattermost, there's multiple RethinkDBs.

Most absurd open source alternative you have been pitched?

I’d feel a little bad calling any out bc it’s usually not too hard to figure it out if I gave that info even without a name :)

I'll read between the lines and assume that means you've heard some pretty absurd ones.

Haha I mean nothing that was obviously ridiculous, like “Applebee’s, but open source” or something. It was more just really hand-wavy logic around why their product needed something open source, with no really compelling answer.

I think "because everything should be open source" is a fine answer to why something should be open source, even if it doesn't answer the different and more important question about how the company will make money.

I care to disagree.

If someone is saying it ONLY to make someone give him money it is not good enough answer. My take on this is that a lot of those people just slap "Open Source" on their product to catch people who can invest and care about open source.

If someone does not really care about open source but is just throwing statements around to look good and get money from people, that is not the right way.

Open source isn't just a label. If the label is a lie and the product is not actually open source, that's a separate issue.

Assuming the product is actually open source, the important question to answer is the same as if it's closed: How do you plan to make money? As to why it's open/closed source, any answer just leads back to "and how will you make money?" Neither licensing model is inherently going to make money.

But I have to agree, an answer like "because 'open source' attracts investors" is a red flag. Investors are the means to an end, not the end itself.

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