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03 March 2009

Comments

Kevin Boon

Great Post!
The age old question of the 21st century - to open source or not to open source. Agree with a number of your points especially saying that converting to sales opps for early stage communities is difficult.

Here's a question for you?
For companies that are in the early stage with product that needs some work do you feel it's a good time to create community or do you think companies should develop in-house first? Also what approaches to revenue have you seen for early stage companies that satifies the VCs?
Kevin

Stephen R. Walli

Thanks, Kevin.

For companies that are in the early stage with product that needs some work do you feel it's a good time to create community or do you think companies should develop in-house first?
I believe a project's software needs to be functional/useful before it can be released. There needs to be an architecture of participation to build the community around the project from the very beginning. I think you need to understand the complement network of your proposed solution around the software, and what thing[s] you will sell before you publish anything. I think you could probably release the software project before selling product if you are really confident in the differences.

Also what approaches to revenue have you seen for early stage companies that satifies the VCs? I want to be glib and say "get some." I think VCs became much more cautious this past year. They want to see prototypes and early market interest and the foundation of a competent execution team. I've seen their interest in early revenue be proportional to how startling/innovative the solution is. The more innovative the solution or disruptive the business model, the less interested they seem to be in seeing early revenue.

Matt Asay

Very good post. I can tell you that at Alfresco we have far fewer downloads, say, than JBoss did, and yet we are far ahead of it in terms of revenue at a similar stage of the company's progress. We're not a better company, but I think apps sell differently than app servers, and we've been careful to nurture leads. At least 25% of opportunities we open result in a sale, and I think the number is actually much higher.

We do many, many things wrong, but I 100% agree that the worst thing would be to naively believe in conversion rates, or at least to suppose they translate well between companies/projects. No open source company is exactly like any other.

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