Opportunity for open source companies

Open source is awesome. The entire world runs on it. It’s also deeply unstable and unpredictable. More on that in a later post.

But it occurred to be that open source holds a central, very valuable value proposition for companies.

It’s open.

And that means transparency.

But it also means control and extendability.

If not now, then in the future.

That is one very strong value proposition, and creates an area of opportunity for new startups:

Infrastructural business critical software.

What do I mean by that?

Business rely on software. Most of it is now in the cloud. Businesses use ERP, website builders, CMS’es, order management tools, and so much more.

These are all foundational pieces of software. They contain the critical data for businesses. And the accessibility and structure of that data, is critical for all the systems that depend on that data.

It is these types of software, that pose a particularly big opportunity for a new generation of open source companies.

Your value proposition is basically an open-source copy of any of the large critical SaaS. Netsuite, Hubspot, Contentful, you name them. And while there might be loads of open-source alternatives already - those lack 2 things: 1) good marketing, and most importantly; 2) good long-term support.

Most open source projects are prone to instability. To community moving on to the next shiny new thing, or to the core maintainer deciding to quit. This matters a lot to companies, because the software is business critical. They need someone to continuously work on it. If you can promise that, and get companies to trust you on this, you’ve taken a huge step forward.

The other thing about open source SaaS, is that it is difficult to setup. Companies much prefer a hosted/managed option, with support build in.

Your value proposition triples in value. Because not only do you offer solid features and user experience. You offer companies full transparency, and you offer them the future option of extending and self-hosting the solution.