44: Exploring the Open Source Business Model

Rob Walling, co-founder at Drip, MicroConf organizer, and host of the Startups For the Rest of Us podcast, continues to co-host with Derrick while Ben is in Hong Kong. Rob is becoming a believer in 3 to 6 hour work days; he is more productive and has more motivation to get things done.

As for Derrick, he read an article titled, After 5 years and $3M, here’s everything we’ve learned from building Ghost, which relates to the business model he is following for his Level product. Ghost is using the open source core product and it’s bootstrapped, which can be difficult. in this episode, Derrick pulls out a few pieces of the article that are relevant to share.

Today’s Topics Include:

• Piece 1: Competing on convenience with centralized platforms was a mistake; took too much time and made it a difficult experience for end users
• Level customers will either pay or go to the open source version; if they find that self-host vs. buy does not work out, there will be a transition path
• Piece 2: Building a distributed team is both easier and harder than imagined; the biggest challenges came from human problems, not business problems
• Drip experienced similar issues with a distributed team; Level will probably have a distributed team to find talent but not be able to compete with bigger companies
• Pros and cons of remote- vs. office-based teams, such as building camaraderie
• Piece 3: Open source development is more broken than ever; you are criticized for not doing something or meeting certain standards
• Derrick plans to set expectations up front and promote opportunities for integration; be transparent and provide value
• Brand is recognition within a group of people; brand association can be positive when they trust you, but negative if the brand treats them badly
• Drive word of mouth; it is one of the biggest attraction channels for companies

Links and resources:

Rob Walling on Twitter
Startups for the Rest of Us
Derrick Reimer Website
Derrick Reimer on Twitter
Ben Orenstein Website
Ben Orenstein on Twitter
MicroConf
Drip
After 5 years and $3M, here’s everything we’ve learned from building Ghost
Build Your Saas Podcast
SaaStr