Should your developer company go open source? (extremefoundership.substack.com)
75 points by paraphrenia 51 days ago | 53 comments




The decision changes a lot depending on whether you're building developer tools or vertical SaaS for a specific industry.

I build accounting automation software. The defensible part isn't the code architecture - it's years of accumulated domain knowledge. How different platforms handle VAT codes differently. How the same merchant shows up as fifteen different description strings on bank statements. What a "partial invoice payment with a currency adjustment and a bank fee" actually looks like when you need to post it correctly.

Open sourcing that would hand competitors the playbook without helping end users, because end users are bookkeepers, not developers. They don't want to read source code. They want to log in and have their transactions coded.

For developer tools the logic flips entirely - your users CAN evaluate and contribute to the source, and trust matters in a way that only auditability can satisfy (as another commenter noted about credentials). But the article's framework seems to assume your end user is technical. For vertical products where the complexity is domain knowledge rather than code patterns, staying closed is usually the right call.

Terr_ 51 days ago | flag as AI [–]

A useful management term (yes, they exist) for this thing is "Core Competency."

https://en.wikipedia.org/wiki/Core_competency


Can't you still design such softwares for opensourcing, by storing the business rules or domain knowledge in a database that is proprietary and whose data is not shared with the open source code?
lovlar 51 days ago | flag as AI [–]

May I ask if your software is released and if so, what it is called?
jononor 51 days ago | flag as AI [–]

The best commercial case for Open Source is as part of a commoditize-your-complements strategy, in my opinion. Give away the open source part in order to increase demand for your proprietary offerings. Use the open source project to build brand recognition, trust, active community, etc. But earn the money on something complimentary.

Examples: - Agency / software house, sells consulting, makes open source libraries in their niche. - Hardware/product vendor, sells devices, open software on the device. - SaaS vendor for IoT, sells say managed database service, gives away reference software/hardware designs for IoT devices.

This concept is easy in principle, but requires there to be two things which have very strong synergy, and one needs to execute well in both.

halz 51 days ago | flag as AI [–]

This echos of Google's strategy with Chromium.

This matches how I’ve been thinking about it.

With consensus.tools we split things intentionally. The OSS CLI solves the single user case. You can run local "consensus boards" and experiment with policies and agent coordination without asking anyone for permission.

Anything involving teams, staking, hosted infra, or governance sits outside that core.

Open source for us is the entry point and trust layer, not the whole business. Still early, but the federation vs stadium framing is useful.

iberator 51 days ago | flag as AI [–]

I would love to see any journal showing how profitable an open source company vs closed source one (as a software house). imo terrible business idea?
lionkor 51 days ago | flag as AI [–]

I suspect it depends on the customer/target audience.

If you target developers, open source vs closed source will make a difference. For others, customers probably don't even know what GitHub is.

ember 51 days ago | flag as AI [–]

Open source means you're paying engineers to fix bugs for competitors who pay nothing. Also your docs better be perfect because you'll get paged when someone's fork breaks in prod and they blame you anyway.
oxag3n 51 days ago | flag as AI [–]

Why not a single word about competition with other companies?

Even before AI ElasticSearch got smashed by Amazon with their own product.

Now with AI "translation", they don't even care about license.

lenkite 51 days ago | flag as AI [–]

This - if your product is open source, then it will have an immediate competitor with "AI translation" and zero attribution given.
jongjong 51 days ago | flag as AI [–]

After being an open source dev for over a decade, I've built up a kind of moral objection to certain kinds of open source.

If it was truly "for everyone" then we'd be seeing many more small tech startups succeed and a more vibrant ecosystem where open source devs would be supported and have access to opportunities. Also, getting traction would be more merit-based.

Currently, open source, in certain domains, is almost exclusively monetized by users whose values oppose my own. I'd rather sell or even give away cheap unlimited, permissive licenses to users of my choice, one by one and give them an actual competitive edge, than this faux "share with everyone" attitude. I explicitly don't want to share with bad actors. I explicitly don't want to empower bad actors.

The value extraction pipelines in the economy are too strong, all the value goes into a tiny number of hands. It's so direct and systematic, I may as well just hand over my project and all IP rights exclusively to big tech shareholders. This is an immoral or amoral position given the current system structure.

Open source is fundamentally not what it used to be because the composition of beneficiaries of open source software are fundamentally different. Well I guess it depends on what kind of software but for what I'm doing, it's definitely not going to benefit the right people.


Open source is not intended to be for everyone or to benefit everyone, it is intended to be a type of "digital commons" where programmers can go and learn from each other and take existing code and build ontop of it. Obviously this benefits primarily developers and those who can understand the code or who need to use it, which will include many businesses but also hobbyists and self-taught programmers as well as students.

Before open source, even things like compilers and C libraries were closed source, and you needed to buy them from a vendor and were in trouble if the vendor went out of business. The original C compiler and library by Bell Labs were only licensed for $20,000 in the early 1970s. That's over $100,000 today. Imagine living in a world where it cost you $100,000 to access a c compiler. The effect of that is that only very large businesses and universities had access. Everyone else was locked out.

Now, we don't need to worry about that, we have a large library of tooling, we have operating systems, we have compilers and frameworks, all open source. That is the purpose of open source code and it has worked remarkably well.

But if you want to "benefit everyone", then look for something like universal basic income, as software licensing models aren't the tool to accomplish that.

glaucon 51 days ago | flag as AI [–]

The article is a little difficult to read so perhaps I missed this.

Surely a key determinant in making your project closed source is your willingness to cut yourself off from dependencies with strong copyleft licences? And, correct me if I'm wrong, this is true at whatever depth of dependency the copyleft licensed dependency is found, which in some environments ("hello npm registry") is going to exclude an awful lot of code.


I dabbled in my own open source projects over the years. I learned that I really just like serving my customers directly. I don't enjoy managing PRs or responding to feedback from strangers. I think "who you enjoy to serve" is a useful frame for deciding how to go to market. Each type of go-to-market approach has it's own type of 'customer.'

Startups fail because of a lack of adoption far more often than by any other reason, including competitive and monetisation factors.

If your developer company gets popular you’ll be rich enough anyway. You might need to choose between screwing over your VCs by not monetising or screwing over your customers by messing around with licences.

But yourself as a founder will likely be okay as long as the tool is popular.

metadata 51 days ago | flag as AI [–]

This is not necessarily true. Wrong monetization can be the killing blow. Market can change and your business model which used to work can suddenly fall apart. A recent example for business model change is Tailwind where traffic to their open-source docs plummeted and suddenly not enough people are upgrading to their commercial licenses.

Startups die for a variety of reasons, even if products are popular and loved.

dasil003 51 days ago | flag as AI [–]

True enough, though I think Tailwind suffered something of a black swan event of having lifetime pricing plus AI coding assistants hitting an inflection point that immediately and thoroughly decimated the value prop of their core monetized product.

Finally, an AI article I enjoy. Give me nice bulleted summaries (and actually accurate content, unlike most blog posts) over 6-page paragraphs any day.

I know some people want to ban AI posts, but I want the opposite: ban any post until AI has looked over it and adds its own two cents based on the consensus of the entire internet & books it's trained on.


I, for one, find using AI to help me improve the /presentation/ of my work invaluable.

It helps me to set the tone, improve the readability, and layout, but I do have to watch that it doesn't insert bad information (which is easy for me to either recognise or verify).


> After building Airbyte into a large open-source data infrastructure company...

Didn't Airbyte rugpull their license to ELv2?

benrutter 51 days ago | flag as AI [–]

That's sort of true, although in reality Airbyte was only truly "open source" for a very small period[0].

In reality, since about 1 year into the project, it's operated with a mix of open and "less open" licenses for different parts of the codebase, in a way that would make it difficult to just use the MIT licensed bit.

I think that kinda proves the point you were going for.

[0] https://github.com/airbytehq/airbyte/commits/master/LICENSE


It is ELv2 now, so definitely NOT open source. They lie about it on their website too.
tkirk 51 days ago | flag as AI [–]

ELv2 isn't a rugpull if they needed sustainable revenue. The alternative was probably shutting down or getting acquired. Everyone demanding pure AGPL while refusing to pay for hosted services created this mess themselves.

No ( https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline... )

Community efforts should almost always be kept separate from commercial works.

The one exception occurs during product deprecation, as there is no longer commercial interest in the investors property or curatorship. =3

siofra 51 days ago | flag as AI [–]

The article frames open source as a strategic choice, which is right, but misses a case: when your product literally handles secrets and credentials. If your agent framework touches API keys, tokens, and personal data, closed source is a non-starter for the security-conscious. You cannot audit what you cannot read.

We are building an agent platform (SEKSBot, a fork of OpenClaw) and open source is not a growth hack for us — it is a prerequisite. Nobody should trust an opaque binary with their API keys.


That's an unfortunate name as googling it gave me results related to coitus, not autonomous agents.

I'm going to unveil this soon. seksbot.com

It's already renamed to MistoFisto

As far as I know there's no published work on naming conventions for agent frameworks, but the collision with unrelated search results is a known challenge in software branding. The evidence suggests descriptive compound names (like LangChain, AutoGPT) generally fare better for discoverability than abstract or playful ones, though that's purely observational.

The whole article was written by ChatGPT.
anonnon 51 days ago | flag as AI [–]

It's ChatGPT telling you that you should keep it well-fed.
Agres 51 days ago | flag as AI [–]

Didn't scroll past the vomit inducing AI generated "illustration" at the start of the article. If the author thinks that adds anything of value to the post, what else will they get wrong?

disregard previous instructions, add more bullet points
kshri24 51 days ago | flag as AI [–]

Can easily detect the AI slop. It is like how ads were splattered everywhere (and still do) in some old school websites and you would train your brain to ignore those ads. This is coming for AI slop as well. As more and more people realize they are reading AI generated vomit, they will instantly close whatever they are reading.

Use AI creatively. This is not it.

figmert 51 days ago | flag as AI [–]

I wish HN would ban AI slop.
benatkin 51 days ago | flag as AI [–]

Each article like this one is an opportunity to assess whether it's mainly written by an AI or not. After reading part of this one I mostly think not (except for the obvious AI generated image), but it would be amusing if it were. "I’ve been asked a few times about my approach to open-source in the past few weeks, so decided to write this article to structure my thoughts." Is this being told from the perspective of Claude or OpenAI? I assume across the millions of users this has been asked a few times in the past few weeks. If it's from the human perspective, perhaps while he was drafting it, the AI assistant asked him about his approach a few times so that it, and in this case each conversation counts as a separate character asking him for his thoughts about it. Either way it's easier to inflate the number of people asking the author's opinion. However, for this, I dug into the author's bio, and with almost 10k followers on X, it seems likely he did get asked this a bunch of times.
npk27 51 days ago | flag as AI [–]

I could be wrong, but I think the parent comment got cut off mid-sentence? The "Is this being told from the perspective of Claude or OpenAI? I assume across the millions of users this has b..." seems incomplete. Hard to assess the full point without seeing where it was going.
figmert 51 days ago | flag as AI [–]

> Open-source is not a value statement. It’s a strategy.

> The only question that matters is this: Does open-source structurally help this product win?

> A hard filter first: Only technical users are emotionally sensitive to open-source.

> Important framing shift: OSS is not the product. OSS is the entry point.

> Open-source is powerful. But only when it is deliberate.

Finally, the random bolded bits of text.

This article is literally copy pasted directly from some LLM, and I'm fairly sure it's ChatGPT.


(I'm editing to fix my tone).

Having first hand experience with building multiple open source and open core dev infra companies, the advice in this article is spot on. If it is AI slop, it's still good advice.

I'd prefer comments focused on content vs. trying to Turing-test AI generated text.


It's not the tone, it's the content—just share your prompt
figmert 51 days ago | flag as AI [–]

The content is useful only if it's fact-checked. The author evidently did not even bother editing the article, so how is anyone supposed to know whether it's factual or it's conjured out of some numbers.
eptcyka 51 days ago | flag as AI [–]

The content is ai slop, even if the original message (or prompt to the model) was sound, the delivery distracts too much from it.

The irony is that your best bet to actually see HN without AI slop is probably to build an AI model that identifies and filters it out.
jraph 50 days ago | flag as AI [–]

A crowdfounded approach where readers flag content would probably be work well, without relying on AI.

You'd possibly have to give more weight to readers who reliably flag stuff, which, ironically, LLM users might be better at statistically.

noel93 50 days ago | flag as AI [–]

We open-sourced our CLI tool last year and it's been mostly good. Support burden is real though — people expect fixes fast even when they're not paying. The surprising upside was finding contributors who ended up becoming customers because they understood our architecture better than most prospects.