How do I build a business model out of an open source project?

Sajmal Yousef
12 replies
An open source project run by us today has over 40 odd contributors. We'd like to understand what growth strategy needs to be used here. Does anyone have experience with this?


If it's something you normally host yourself, offer to host it for paying customers :)
I can highly recommend some related reading:
Mr Ethar Alali
IME there are a few main ways but this depends on your target audience and how abstract the OSS model is: 1. Get something like a Patreon page up. This is more suited to creative work, but other OSS monetization platforms exist. Do your research though 2. SaaS - The software may be OSS, but hosting is may not be. and are examples of this 3. Build consultancy around the Open Source library. This is something we are doing in our OpenPolicy initiative. The consultants are HR and board consultants. We give them the community driven policies for free. Gives them a value add and where it applies to us, we get cash from such an assignment 4. OpenCore initiative - Where the basic core functions are free, but building more complex systems, with greater simplicity, requires a paid version. Math.NET Numerics (which I personally once contributed to) uses such a model
Nicolas Laurent
It's hard to say without any further informations on your project, but you could get some inspirations from what Canonical does ( Even though they distribute Ubuntu (with is free and open source) they make money out of maintenance and help for deployment Hope this helped ;)
Sajmal Yousef This is the product , its in nascent stage in terms of users. But we do have a lot of contributions coming in
This is difficult for even the most successful open source projects. I should emphasize "successful" because an open source projects needs wide adoption before it can begin to monetize. There are a few avenues to pursue: - Sell ads on site (given you get enough traffic) - Corporate & private sponsors - feature them on site and social - Licensing - create different license tiers which you can sell to enterprise users - Hosting - depending on your product you can share the source but charge for hosting - Training - charge for consulting, webinars, courses, etc.
Markus de Haan
Hi Sajmal, Good question. I read the other day an article about this, and the guy said the first thing you need to do is build a community around it. The more community you have, the bigger visiblity you and footprint you have. Extending and building a community is I guess about adding value in some way to the members. I am furthermore intriged by hypergrowth strategies - being exponential growth and thus no-linear growth - and are applying this in my own initiatives. Two weeks ago for example, we were with 6 and me, and last Friday we were with 12 and me. I am splitting it into 2 teams, and heading both to 12 again so we have 24. And then again a split to 6 :) Cheers, you can always contact me to discuss such things further, Markus.
Sajmal Yousef
@makkus Thank you ! Would love to know more about your project . The exponential growth is impressive
Markus de Haan
@sajmal_yousef Thank you very much :) It is impressive, indeed and really cool to do. The 6 * X = Y, and dividing the Y again through 6 is a strategy that AWS also uses. I can recommend the book on it, their strategy and growth very much. It is 'Reaching Cloud Velocity': We can discuss my projects - I have multiple, and that is why I am scaling now with people horizontally as well as vertically - next week somewhere. I am not sure where and in what region you're located to pick an appropriate time. I myself are located in the Netherlands (CET time). Cheers, Markus.
Saro Gunaseelan
How is your company setup currently? I am afraid this is a broad question with several areas to be looked at -a) company setup /owners b) what kind of equity to be given to the contributors c) what is your revenue model and who is in charge of making the decision - CEO/CPO among other things. Based on what you are saying - if you have managed to get contributors then there are folks that are genuinely passionate about solving the problem. So when you figure out the missing pieces it may be easier for you to do the hiring and even bring in a CTO, etc. Love to learn and help more.
Sumit Datta [dwata] 👋
Hello Sajmal, I checked your product's landing page and I honestly feel that this should be a cloud hosted SaaS product. It is great that it is open source, but I can not understand why it needs to be specified to your buyer as such. The buyer is, I think, brick and mortar shops who have queues. They really do not care if your product's source code is available and under what license. They need a problem to be solved. I am saying this as a strong contrast to my own product which is commercial open source, but where the customers care about it being source available/open core. It is a product that sits on top of their relational database and has full access to data and APIs like Stripe. So being open source is actually a competitive advantage for me. Every single customer I reached out to wanted to know if the product source is somehow available and if they can host on-premise. Hope that helps
Ana Bibikova
I like the product you're building. There're number of ways you can monetise it, as far as I see. My suggestion is to take your customer as a starting point and go from there. Presumably, 80% of your business customers are restaurants, bars and shops. You could reach out to indoors advertising agencies specialising on selling add spaces in restaurants and bars. You might offer them a totally new measurable channel they can use to sell advertising to restaurant visitors. It can be subscription based or pay-per-view based for them. On the contrary, you might reach out to shop owners directly and offer the same deal for them: advertise your nearby shop while a customer is waiting in a virtual queue. My main idea, is to get more data on your active and potential business users and offer them a way to solve their current pains. And certainly, good luck with your OSS. I was exited to upvote it