Mike Diliberto's presentation from the Refresh conference. A discussion of how to be a successful commercial open source company.

1. Image provided by afsilva via Flickr
Commercial Open Source
Mike Diliberto
Tuesday, January 26, 2010

2. My Story
✤ Originally studied Computer Science
✤ Discovered that I was not
passionate about writing code
✤ Started working in R&D
✤ Because I am passionate about
solving problems
✤ Started my career in corporate America
(Circuit City), later worked for a New
Zealand startup, and now at
MindTouch Mike Diliberto
@mikediliberto
mikediliberto@gmail.com
Tuesday, January 26, 2010

3. From this
Tuesday, January 26, 2010

4. To this
Tuesday, January 26, 2010

5. My Story
✤ Originally studied Computer Science
✤ Discovered that I was not passionate about
writing code
✤ Started working in R&D
✤ Because I am passionate about solving
problems
✤ Started my career in corporate America (Circuit
City), later worked for a New Zealand startup and
now at MindTouch
✤ Working for a small, resource constrained firm
taught me how to make the most of the resources
on hand.
✤ Being accountable for the money I spent (and
Mike Diliberto
made!) made me passionate about business @mikediliberto
mikediliberto@gmail.com
Tuesday, January 26, 2010

6. Today’s Topics
✤ What is Closed Source?
✤ What is Open Source?
✤ Why Open Source?
✤ Value in Support
✤ Building value in functional
delineation
Image courtesy of mark van de wouw via Flickr
Tuesday, January 26, 2010

7. What is closed source?
✤ Only compiled code leaves the building*.
*mostly
Tuesday, January 26, 2010

8. What is closed source?
Source Code Compiled Code
Winword.exe
Customer
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9. How do you build
closed source?
✤ There are a lot of different
development methods, here is
one:
Requirements
Design
Write Software
Test Software
Ship Software
Image provided by tinyfroglet via flickr
Tuesday, January 26, 2010

10. How do you build
closed source?
✤ There are a lot of different
development methods, here is
one:
Requirements
Design
Write Software
Test Software
Ship Software
Tuesday, January 26, 2010

11. How do you build
closed source?
✤ There are a lot of different
development methods, here is
one:
Requirements
Issue:
Design All of these activities
occur internally
Write Software
Test Software
Ship Software
Tuesday, January 26, 2010

12. Ok, So what
about Open
Source
Photo courtesy of bratmandeux via Flickr
Tuesday, January 26, 2010

13. The big difference: how it is built
Requirements
Design
Write Software
Test Software
Ship Software
Tuesday, January 26, 2010

14. The big difference: how it is built
Requirements
Difference:
Design Some or all of these
activities occur publicly
Write Software
Test Software
Ship Software
Tuesday, January 26, 2010

15. Open Source is different
Source Code Compiled Code
OpenOffice.exe
Customer
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16. Why Open
Source?
“Proprietary
software developers
have the advantage
of money; free
software developers
need to make
advantages for each
other”
- Richard Stallman Photo courtesy of bratmandeux via Flickr
Tuesday, January 26, 2010

17. Sharing is good
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18. Fast-track development
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19. One more thing...
Vs.
Photo courtesy of bratmandeux via Flickr
Tuesday, January 26, 2010

20. Need more
reasons?
✤ Consumer Driven Innovation
✤ Get the product out the door!
(good, fast, and cheap!)
✤ Marketing / Leads
(Community)
✤ Market penetration
Photo courtesy of bratmandeux via Flickr
Tuesday, January 26, 2010

21. So, if people can get it for free,
how do you make money?
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22. Revenue
✤ Services:
✤ Support
✤ Custom design and
development (in moderation)
✤ Functional Delineation:
✤ Build a commercial offering
using your Open Source
product as a base or
framework
Tuesday, January 26, 2010

23. Support
✤ Paradox:
✤ Corporate users want a butt to
kick
✤ Open Source is typically not
supported
✤ The most popular
commercialization method (for
now) is to provide support to
customers or provide a supported
version for a fee.
Tuesday, January 26, 2010

24. Functional Delineation (huh?)
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25. Functional Delineation: How?
User
requested
features
/
Community
contributions
Functionality
Internal Development
Commercial Framework
Open Source New
High
Value
Add
Commercial
High
Value
Add Capabilities
Low
Value
Add
New
OSS
Low
Value
Add Capabilities
Open
Source
Open
Source Capabilities
Capabilities
Version n Version n + 1
Graph Courtesy Gartner Research Group 2009
Tuesday, January 26, 2010

26. Marketing. (Or, thank goodness for social media!)
✤ Open Source marketing budgets are usually pretty small
✤ So, spend where it counts:
✤ Google Ad Words
✤ Social Media
✤ Trade show (sometimes)
✤ Speaking engagements at RefreshSD
✤ Word of mouth
Tuesday, January 26, 2010

27. Word of Mouth / Community
✤ Love your community, they are your most valuable resource!!
✤ In our recent survey, 75% of commercial Open Source firms have or
plan to hire a community manager.
✤ Spend time in the community:
✤ Online
✤ Real life
✤ Spend time with the users
Tuesday, January 26, 2010

28. Love your data
✤ Gather data like it is your job - even if you do nothing with it!
✤ CRM
✤ Lead tracking / lead scoring
✤ Know your people:
✤ What are they doing?
✤ Where can you help?
✤ Do you <3 statistics? learn.
✤ Every commercial Open Source firm that we surveyed is doing this
Tuesday, January 26, 2010

29. You can do that with our software?
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30. How do I get involved?
Tuesday, January 26, 2010

31. Image provided by afsilva via Flickr
Thank You!
Mike Diliberto
Tuesday, January 26, 2010