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Discussion on: I'm Vivek Saraswat, investor in Dev Tools + Infra startups @ Mayfield and former product leader @ Docker/VMware/AWS. AMA!

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molly profile image
Molly Struve (she/her)

When a company develops a widely adopted and used open-source tool (anything from a Ruby gem to a framework such as DEV) what advice do you give them when they are looking to monetize it? Is there a "usual" path you like to take or is it very dependant on the technology and what it does?

Thanks for taking the time to do this amongst all the chaos!!!

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Vivek Saraswat Ask Me Anything

Hi Molly! Commercializing an open-source tool is definitely a hotly debated topic with lots of opinions =). There isn't a "usual" path per se because it does depend a lot on the technology. It also depends on whether the team wants to build venture-backed, high-growth business (e.g. Hashicorp, Elastic, Confluent), or a more bootstrapped, long-scale model (e.g. JetBrains).

That said, I do have some opinions on this from my past experiences, some of which I elaborated on in my presentation at the Open Core Summit on "Putting the Product in Product-Led GTM". I'll summarize some of my thoughts below:

  • Develop a "critical path" value proposition, for your community user, effectively one that is so important that it gets the open-source adopted into the core workflows and architecture, and "designed-in" as the process of record for every team in both communities and enterprises alike.
  • Understand what your enterprise buyer actually values (usually some combination of piece-of-mind, collaboration, and performance). Influence them to provide the enterprise version of your product as a service to their users as an upsell.
  • Make the upsell as frictionless as possible--use an inside sales process that takes advantage of the bottoms-up nature of your product, and architecturally either use hosted SaaS or don't force your customers to swap out binaries to upgrade.
  • Create a balanced product/engineering team culture. Don't put a firewall between your community and commercial teams; your product and engineering folks should have empathy for both sets of users and buyers.
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