Introducing: the Open Source Field Guide

How to build a successful open-source company: the complete picture

Introducing a new comprehensive Open-Source Field Guide for founders going from OSS idea to product-market fit

One of the most common early decisions many technical founders make is to build their companies around open-source software (OSS). This wasn’t always the case; for a long time, there were very few examples of OSS projects sustaining large commercial businesses. That’s changed significantly in the last several years. 

Companies such as Confluent, HashiCorp, GitLab, Elastic, MongoDB, and MuleSoft all started as OSS projects and eventually went public at strong multiples and tens of billions in collective market value. Databricks, Redis Labs, Vercel, Grafana Labs, and many other private companies built around OSS are additionally poised to continue growing rapidly as category leaders.

These proof points should give founders confidence that an open-source business model is not only viable but, in some cases, may be superior to a closed-source approach. In certain categories of developer tools, databases, data management, and security, open-source projects are increasingly preferred by end users and customers when initially adopting new products. Other tailwinds exist for open-source businesses —  large communities that favor OSS projects have established new standards across cloud-native infrastructure, security, and many other technical areas. 

Open-source companies now have many ways to monetize using different approaches such as managed services and open-core versions. Open-source models, when they work as intended, enable broad distribution, self-service user adoption, fast product iteration, and efficient sales cycles. A growing community, vital to the success of any open-source company, can provide strong defensibility against competitors.

The companies highlighted above all leveraged the benefits of OSS to their strategic advantage to find product-market fit and win their respective markets. However, the path for building a successful open-source company has important nuances compared to growing a traditional enterprise software or SaaS business. 

Over the years, our team has founded, led, and supported dozens of prominent open-source companies from their earliest stages. We’ve compressed the learnings from our firsthand experiences into a new resource: The Unusual OSS Field Guide. This new resource is a comprehensive guide to help founders tackle the unique challenges of building an open-source company and serves as a supplement to the Unusual Field Guide, which already provides a framework for general early-stage company building to help founders go from idea to product-market fit.

The OSS Field Guide provides answers to the key questions that open-source founders ask. It provides tactical best practices specific to building an open-source company, such as how to build a community, which OSS adoption metrics to measure, the most common monetization models, which license to choose for your project, and more. It references several examples and lessons learned from the founders of more than a dozen successful open-source companies such as Vercel, Elastic, Cockroach Labs, Grafana Labs, DataStax, Temporal, Astronomer, Styra, Heptio, Sysdig, InfluxDB, Neon, and PostHog.

Starting today, we will release multiple sections of the OSS Field Guide over the next several weeks. Check out Part 1: Starting an OSS Company here.

We believe open source will continue to fuel significant innovation and provide the foundation for many large, successful businesses that are yet to be built. If you are a founder building an open- source company, we’d love to chat with you! You can reach me at wei@unusual.vc and on Twitter: @WeiLienDang.