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RAILS WORLD AMSTERDAM 2023
IRINA NAZAROVA
CEO @ Evil Martians
WILDEST DREAMS
OF MAKING PROFIT
ON OPEN SOURCE
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OPEN
SOURCE
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Web technologies
dominate software
development...
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Web technologies
dominate software
development...
...thanks to
open source
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MAINTAINER’S GUIDE
TO COMMERCIAL
OPEN SOURCE
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RAILS WORLD AMSTERDAM 2023
IRINA NAZAROVA
CEO @ Evil Martians, product
consulting for developer tools
Co-founder @ AnyCable
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2x startup founder
Research analyst @ J.P. Morgan
C++, Ruby on Rails engineer
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PRODUCT CONSULTING
FOR DEV TOOLS
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DOES OPEN
SOURCE
BRING YOU
BUSINESS?
PRODUCT CONSULTING
FOR DEV TOOLS
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BUT IT’S MORE
THAN THAT
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Real-time server for Ruby,
Rails, Hotwire that takes care
of real-time connectivity,
consistency and scaling
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VLADIMIR DEMENTYEV
AUTHOR AND CO
-
FOUNDER
USED BY
Communication
Collaboration
GPS tracking
Online events
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AnyCable is open source.
AnyCable Pro is a paid
on-premise product.
Generates about
$
1M
annual consulting
revenue for Evil Martians.
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imgproxy is open source.
imgproxy Pro is a paid on-
premise version.
imgproxy graduated Evil
Martians, raised external
funding and incorporated.
USED BY
Fastest on-the-fly
image optimization
server
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Ideal world
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Agency
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Agency
a thing or person that acts to
produce a particular result
—
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COMMERCIALIZE!
🍏 🍍 📢 👀
㱺 㱺 㱺
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But what if it
won’t work out?
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But what if
she had…
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“Only 3 simple
steps, darling…”
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STEP 1
CHOOSE A
BUSINESS
MODEL
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HOW TO EARN ON
OPEN SOURCE
1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
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Elastic
Redis
Sentry
Supabase
Databricks
HOW TO EARN ON
OPEN SOURCE
1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
GitHub
Treasure Data
(FluentD)
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1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
HOW TO EARN ON
OPEN SOURCE
Sidekiq
AnyCable
Karafka
BulletTrain
Avo
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1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
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HOW TO EARN ON
OPEN SOURCE
GitLab
Instructure
(Canvas LMS)
Rapid7
(Metasploit)
Puppet
Sidekiq
AnyCable
Karafka
BulletTrain
Avo
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1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
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HOW TO EARN ON
OPEN SOURCE
Red Hat
Evil Martians
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1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
HOW TO EARN ON
OPEN SOURCE
❗Largest clients move off
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❗Much lower conversions
1. Cloud subscription, or SaaS
2. Dual licensing, on-premise
3. Consulting contracts
❗Largest clients move off
HOW TO EARN ON
OPEN SOURCE
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LET’S SIZE IT
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👩💻🧑💻👨💻👨💻
👩💻👩💻🧑💻🧑💻
👨💻👩💻👩💻👩💻
🪙 🍰
🎂
× = ⇒
THEY SPEND
# POTENTIAL CLIENTS TAM REVENUE
LET’S SIZE IT
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We’re all set!
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WHICH MODEL TO CHOOSE?
1. Is Revenue < salaries for you and team?
– Side/hobby project, to try and learn
– Use open source for marketing or HR goals
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In order to raise, you need to
test your hypothesis
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2. Is Revenue > $1B in 5
–
10 years?
– Large market. Great opportunity!
– Competition with VC-backed companies
– You have to raise venture capital too.
WHICH MODEL TO CHOOSE?
You will have to have both
SaaS and on premise
eventually. Question is,
what to begin with.
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3. Is Revenue in between those two values? Or,
can you focus on speci
fi
c smaller niche?
– Bootstrap a business
– Grow at your own pace
WHICH MODEL TO CHOOSE?
It can be either of the
3 models, including
consulting.
To decide which model works
better, you need to test it!
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HTTPS://DOCS.GOOGLE.COM/SPREADSHEETS/D/1
-
F7_SCCQSZZH4TPYGYQQGJOUFAHYGKORPFHABXXSN9E/EDIT#GID
=
0
BOOTSTRAPPING CAN
TAKE YOU A LONG WAY…
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LET YOUR SKILLS TALK
If you are good with content and marketing,
go with bottom-up sales & SaaS.
If you have many connections, start with
top-down sales & on-premise.
✍
💼
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TEST YOUR
PRODUCT
HYPOTHESIS
STEP 2
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BUILD AN MVP
MVP is a tool to validate a product hypothesis
quickly without an upfront investment.
👩🎤 🍏 👩🔬
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〔👩🎤 🍏 👩🔬〕
BUILD AN MVP
MVP is a tool to validate a product hypothesis
quickly without an upfront investment.
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👩🎤 🍏 👩🔬
20 people you know Figma prototype
Meet them for co
ff
ee and
give them your laptop
Readers of a subreddit Landing built with Framer
Record sessions with
PostHog, track signups
Attendees of a meetup Presentation Track signups and questions
Emails of CTOs of speci
fi
c
companies
GitHub page
Track signups and
responses
EXAMPLES
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NEXT STEP: PAID PRODUCT
👩🎤❗ 🤚🍏🤚 💸
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NEXT STEP: PAID PRODUCT
〔👩🎤❗ 🤚🍏🤚 💸〕
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MAKE
PROFIT
STEP 3
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LEVERAGE USAGE
-
BASED
PRICING
–
NOT ONLY IN SAAS
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PRICE
P*
Q*
PRICE DISCRIMINATION
THAT IS STILL LEGAL
Flat price
REVENUE
DEMAND CURVE
# CLIENTS
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PRICE
P*
Q*
PRICE
Flat price Usage-based licensing
# CLIENTS # CLIENTS
P5
P4
P3
P2
P1
REVENUE
PRICE DISCRIMINATION
THAT IS STILL LEGAL
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😱
YOU CAN CHARGE
FOR OPEN SOURCE
FEATURES
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👩🚒
CONSULTING CAN BE
COMPLEMENTARY TO
BUILDING A PRODUCT
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NEW
DOCUMENTATION:
GUIDES
🦮
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🗣📝
TALK ABOUT YOUR
PRODUCT AND
YOUR WORK
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DID YOU
SUCCEED?
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KEEP GOING
🏃
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Fall in love with
your audience
NOT YOUR PRODUCT
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ARE YOUR DREAMS
WILD ENOUGH?
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RAILS WORLD AMSTERDAM 2023
Slides: evilmartians.com/events
Sign up for newsletter:
evilmartians.com/chronicles
anycable.substack.com
Twitter: @evilmartians,
@any_cable, @inazarova
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THANK YOU
SPECIAL THANKS TO MARTIANS, MILES AND MIDJOURNEY
Please donate to
razomforukraine.org