I'm on this journey to build a profitable open-source project (OSS). In my career I’ve worked as a developer advocate and helping devs navigate how to optimize their productivity with useful developer tools. I also deeply align with the vision of democratizing access to toolings to provide optionality for builders.
I’ve seen role models in OSS and am on a journey to deconstruct their business models and see how this can be applied to open-source projects. For a few years I’ve been actively contributing to community-owned projects and toolings. If we take a look at the industry leaders:
Red Hat:
- owned by IBM
- Est. Revenue in fiscal year 2019 (before acquired by IBM) ~ $3.4B in revenue
- business model: enterprise solutions on LinuxOS, apps and services on OSS
MongoDB (Database):
- OSS NoSQL database
- business model: commercial licenses, enterprise support, and cloud-based services
Docker (Containerization):
- tool to build, package, and distribute applications using containers
- business model: commercial offerings (Docker Enterprise) for enterprise-grade container management
My experience having been involved in Yearn, token swaps (ie SushiSwap) and Gitcoin:
- business model: transaction fees (requires volume and velocity), TVL portfolio growth
- most of these OSS projects are funded by community money or Foundation grants
The next step is exploring productizing AI-enabled products that improves the pain-points for devs or technical consumers. I’ve worked at companies where AI-assisted dev tools were greatly frowned upon. The 3 leading models for me are subscription plans, enterprise edition and building out a marketplace. The marketplace will be the long-term vision as the cold start problem then really requires momentum to overcome.
Revenue models for open-source:
- commercial licenses
- subscription plans ←
- enterprise edition ←
- support and maintenance
- consulting and professional services
- Cloud hosting
- marketplace ←
- data services
If you have any suggestions or want to share your own journey building revenue-generating OSS, would love to start a conversation. My next steps are iterating on product and adoption, based on user-feedback on nascent AI developer experiences.
Top comments (0)