Open Source 101. Monetize or Vanish

by Victoria Melnikova

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NDC Porto 2023 1

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3 NDC Porto 2023 This may look like a funny test, but it’s not

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Supabase Vercel GitLab MongoDB Elastic Red Hat Estimated revenue range $1M to $10M $100M to $500M $1B to $10B Funding Series B, $116M Series D, $313M Post IPO Acquired by IBM 4 NDC Porto 2023

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5 NDC Porto 2023

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6 NDC Porto 2023

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7 NDC Porto 2023 Good news!

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8 NDC Porto 2023 From 2010 to present day, the number of GitHub users exploded from 0.5M to 103M

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9 NDC Porto 2023 While the number of projects (repositories) has grown at an even higher rate, from 0.6M to 359M

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10 NDC Porto 2023 Investments in open source based products have almost tripled over the last 7 years: from 58 deals in 2015, to 144 deals in 2021 In comparison to 40% in SaaS

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11 NDC Porto 2023 There are 25–30M software developers in the world

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12 NDC Porto 2023

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14 NDC Porto 2023 What if I told you that…

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16 NDC Porto 2023 Who am I to tell you this?

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I am Victoria, Head of New Business at Evil Martians and your biggest cheerleader. 17 NDC Porto 2023

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18 NDC Porto 2023 Evil Martians transform growth-stage startups into unicorns, build developer tools, and create open source products.

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21 NDC Porto 2023 I study COSS and developer tools for a living.

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23 NDC Porto 2023

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24 NDC Porto 2023 Today, we will try to monetize open source together.

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25 NDC Porto 2023 Let’s start from the beginning.

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26 NDC Porto 2023 How do you decide whether to open source a project?

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27 NDC Porto 2023 1. Over-engineering What’s holding you back?

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28 NDC Porto 2023 Problem #1: Engineers love to engineer Solution: Apply startup mindset

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29 NDC Porto 2023 1. Discover a real pain point in your project and solve it 2. Try repeating this for other projects and talk to your peers 3. Is this issue common? ➡ Open source your solution

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30 NDC Porto 2023 Example #1 imgproxy.net Market need: 1. Millions of images in multiple resizes 2. Expensive storage 3. Slow loading Result: On-the-fly image optimization

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31 NDC Porto 2023

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32 NDC Porto 2023 3 years later: ● 2M images processed for eBay alone ● 7K+ GitHub ⭐ = thousands of open source users ● dozens of paying users ● thousands of dollars saved on storage

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33 NDC Porto 2023 1. Over-engineering 2. Time constraints What’s holding you back?

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34 NDC Porto 2023 Problem #2: I have no time for my project Solution: Devote time

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35 NDC Porto 2023 10 hours per week over 3 or 6 months is a great start

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36 NDC Porto 2023 Example #2 getunleash.io Market need: Tough to manage feature shipment in a large org Result: Easy-to-use feature flags alongside enterprise-level security & privacy

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37 NDC Porto 2023 Landing page with a waitlist. Does it spark interest? People are signing up, writing to you asking for paid features? Good sign!

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38 NDC Porto 2023

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39 NDC Porto 2023 4 years later: ● $14M series A funding ● 9K+ GitHub ⭐ = thousands of open source users ● hundreds of paying users ● 25+ SDKs

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40 NDC Porto 2023 1. Over-engineering 2. Time constraints 3. Lack of funding What’s holding you back?

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41 NDC Porto 2023 Problem #3: I have no money to spend Solution: Find ways to get paid

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42 NDC Porto 2023 Answer two important questions: 1. Do you want to fundraise? 2. How can you monetize your project?

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43 NDC Porto 2023 Example #3 sidekiq.org Market need: No efficient background processing for Ruby Result: Simple and efficient background job framework written in Ruby

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44 NDC Porto 2023 ● Set SMART goals ● Be transparent ● Set boundaries ● Experiment with pricing

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46 NDC Porto 2023 10 years later: ● $5M ARR ● 12K+ GitHub ⭐ = thousands of open source users ● thousands of paying users ● #1 background jobs tool for Ruby

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47 NDC Porto 2023

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48 NDC Porto 2023 Before we go forward, let’s talk about business models

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49 NDC Porto 2023 ● SaaS / Managed Cloud (Supabase, Neon) ● Open Core (Sidekiq Pro, Cockroach Labs, AnyCable Pro, HumanSignal) ● Loose Open Core (Tonic.ai, Roblox) ● Platform/Cloud and framework (Vercel, Anyscale, Streamlit) ● Support and consulting (RedHat, Evil Martians) ● Mix and match

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50 NDC Porto 2023 one more thing, usage based pricing ● Usage in SaaS: volume, seats ● Usage in Open Core: concurrency, seats

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51 NDC Porto 2023 Don’t be afraid of experimenting with it. Lashback from the community is possible, but there are ways to minimize it.

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52 NDC Porto 2023 1. Over-engineering 2. Time constraints 3. Lack of funding 4. Too many cooks in the kitchen What’s holding you back?

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53 NDC Porto 2023 Problem #4: People are pulling me in different directions Solution: Strong mission & leadership

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54 NDC Porto 2023 Perhaps, it’s time to find a co-founder?

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55 NDC Porto 2023 Example #4 cal.com Market need: Calendly didn’t suffice for talent marketplace Result: Transparent, convenient and beautiful scheduling tool

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56 NDC Porto 2023 Landing page with a waitlist. A ton of requests, but no time. Scouted network, found a co-founder in the waitlist.

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57 NDC Porto 2023 1. Clear mission 2. Every decision is subject to alignment with the mission 3. Tough conversations, but strong partnership and clear trajectory

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59 NDC Porto 2023 2 years later: ● $32.4M ($25M series A) funding ● 24K+ of GitHub ⭐ = millions of users ● Wildly successful launch on ProductHunt

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60 NDC Porto 2023

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61 NDC Porto 2023 1. Over-engineering 2. Time constraints 3. Lack of funding 4. Too many cooks in the kitchen 5. Feedback: good and BAD What’s holding you back?

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62 NDC Porto 2023 Problem #5: People tend to be vocal about the bad, much less about the good Solution: Nurture your community and change your mindset

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63 NDC Porto 2023 Every bit of feedback is your opportunity to grow and improve your product. Iterate fast. Talk about it.

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64 NDC Porto 2023 Your community will share your DNA. Set boundaries, reward good behavior, nurture champions. Eliminate toxicity from day 1. Reality is people want to belong and connect.

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66 NDC Porto 2023 1. Over-engineering 2. Time constraints 3. Lack of funding 4. Too many cooks in the kitchen 5. Feedback: good and BAD 6. Lack of empathy What’s holding you back?

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67 NDC Porto 2023 Write a good read.me

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69 NDC Porto 2023 Documentation is the first thing people will see. Make it simple and clear, friendly, too.

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70 NDC Porto 2023 Now that you are free, let’s walk through the steps

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71 NDC Porto 2023 1. Discover a real pain point and solve it 2. Devote time to it 3. Find a co-founder 4. Talk to (potential) users 5. Choose a monetization strategy 6. Choose a license 7. Write a good read.me 8. Create a landing page 9. Build in public PROFIT, literally