How to open source your idea to create a thriving business

Tl;dr: If you want to make sure you can turn your open source idea into a business and that it’s not stolen or commercialized by others, first validate people are interested in using and paying for it. Then find a few contributors who are interested in developing it with you and open a space for the communities’ contributions. Once you have this deliver a great product and service.

———————————————————————————————————————-

Uarm had its open source desktop robotic arm copied by others. They were the first to develop this kind of robotic arm, the first to share it in Open Source and the first to work on it for 2 years. Until one day Dobot copied their project, created a community of contributors and developed a more robust and precise robotic arm.

Uarm had 2 years of advance, but Dobot has become the more developed and precise robot.

Why?

Just because they were the first to provide a space for the community to help them build a better version of it.

From that moment the gap has never closed. Uarm is a cheaper product, but Dobot is the most advanced, precise and trusted robotic arm thanks to its bigger community of contributors.

And because Dobot have been the first to get so advanced, now Uarm seems to have chosen to secure its cheaper positioning instead of copying Dobot back. 

If you are in business, Open Source can be dangerous for your project. If an invention is shared in open source too soon, others might take it without giving back and take over the market from you.

And if you are a bit conspiranoïc, you could even say that sharing a disruptive invention in Open Source could lead it to be sabotaged and ridiculed by the incumbent competition to protect its interests.

Apparently it happened to the electric cars in the 1990’s because it was going to get the whole oil industry in danger. So if your open source projects is too disruptive, the competition you want to transform could always fund a lobbying campaign to go after you.

Conspiranoic claims wouldn’t be a big problem for open source software, since it’s easy and cheap to copy, study and spread the code. If the claims against a given software are true, communities can easily dig in and find about out it. If they are not true, the community has actually discovered a new piece of useful software.

But for hardware projects this can be a bigger risk, since it is harder to study and test it if you don’t have the required machinery to reproduce it.

Creating a new innovation and spreading it to the world takes time. Besides developing a project, you need to promote it, fund it and document your project in Open Source so others can contribute to it.

And it takes time. A lot of time.

You might be a hardcore open source and creative commons advocate. You think everything should be made free for anyone to study, reuse and resell. But even If you are in it just to contribute to the commons, you might want to take some steps to make sure your projects has a chance to survive for a long time.

So it’s better to know in which order to tackle these things.

From my research, here are some common steps thriving open source companies use to protect their inventions’ business even if it’s Open Source:

1/ Find an idea people want and need
2/ Validate that people are ready to use it and pay for it by finding your first customers
3/ Develop and deliver your solution
4/ Find more customers
5/ Once you’ve found enough customers to sustain your work, invest your time and money in documenting your solution in Open Source so others can study it, modify it and even distribute it
6/ Provide a space for your community to build on top of what you’ve made
7/ Improve your product with the communities feedback and give back to the community through your documentation and by providing a great product and service.

That’s it. 7 steps.

Seems easy on the surface, right? Well, the problem is that each step is freaking hard to do, and requires huge amounts of skills.

On the bright side, from the moment people start using your solution and making new things out of it, it will reflect back positively on your project.

So open sourcing is, for me, much easier than the path to create a patented alternative. Patenting is way more expensive, and it probably takes more time:

1/ Develop a solution people want and need
2/ Pay a patent (From $5,000 to $100,000 depending on how many country patents you want)
3/ Validate that people are ready to pay for it
4/ Find your first customers or a partner that will commercialize your idea and pay royalties
5/ Keep hiring engineers and employees to improve your product

The downside with this path is that if someone copies you, you have to sue them to make them stop. This is becoming increasingly hard to do, specially if you don’t have the funds to pay to sue anyone. Besides, it is energy and money you are not using to create useful solutions for others.

So let’s see how this process would unfold if you decided to go open source in a way that is both beneficial to you and to your community.

1/ Find an idea that people want and need

In this post we saw six ways to find profitable ideas adapted to your skills.

Whatever idea you have come up with, ask yourself these three questions:

  1. Who are the people who need your solution?
  2. What problem do they face that needs solving?
  3. What is your solution and what benefits does it offer?

The predecessor of WordPress, the blogging platform B2, started for bloggers [people who needed a solution] who couldn’t find a publishing platform with a comment system [Problem]. The benefits of B2 was that it was easy to run and to adapt by anyone [Benefits]. They later started selling hosting, support for wordpress sites and advertising.

Arduino started as an easy-to-use microcontroller board to teach students [people who needed a solution] how to program electronics without having to learn all the complexities of electronics [Problem]. They soon found that their students were having amazing results with them [Benefits]. So they started selling it and documenting the blueprints in open source so the community could build on top of it.

Once you realize who you are helping, what are their problems and what benefits your idea delivers, it’s much easier to find your community of users and to promote your project.

2/ Validate the interest of your audience and find your first customers or donors:

Why is it so important to find customers or donors?

If you are a business this is obvious. Money from customers will keep you running and pay for your salary and all the costs involved in creating your solution.

But if you are a non-profit you will also need to find ways to fund your work and the contributions of other collaborators. If you are not making a living for yourself, you won’t be able to maintain your project, even if it’s open source, and your project will not live very long.

The only case where you don’t have to find customers or donors, is if you are already paid to create open source solutions for your employer. Then you can skip this step since your work is already funded.

In our current capitalistic society there are no open source or collaborative projects that have survived a money-less founder.

  • Richard Stallman has gotten over $1 million from the Macarthur Award and the Takeda Prize to fund his not-for-profit work leading the Free Software Foundation.
  • Wikipedia runs an annual donation campaign that raises over $20 million dollars every year to pay for the costs of their servers and their employees. Every page view costs them around a penny per reader per month, but when you have 500 million readers per month, you have to find the funds to maintain it so they can keep coming.
  • Arduino has found sustainability through the sales of their microcontrollers
  • B2, the project that was the initial seed of WordPress almost died when its inventor couldn’t sustain himself and maintain B2. Thankfully for all of us Matt Mullenweg and Mike Little revived it and found a business model for WordPress.
  • Facebook, Google or Uber’s Open source projects are funded by the salaries of their employees. They develop these projects in Open Source for their companies because it’s cheaper to maintain it this way.
  • Most Open Source solutions are subsidized by companies who pay their employed developers to create tools to help them do their jobs. They make it open source because they don’t need a monopoly on the solution and they can share the burden to maintain it with the rest of the community.

You can remain frugal and you don’t need millions to make a positive impact. But you need to be able to cover your own expenses and pay for your beans as long as everything in our society is not free (as in beer).

Imagine you took 2 months to build something, you made it open source and got 100 users and no clients to sustain your work. Now imagine you took 10 months to go through every previous step and get 10,000 users and $200,000. Don’t you think the impact of your project would be greater in the long run?

To find your first customers or donors you can do this in three ways:

1/ You can use the validation techniques we outlined in this previous post.

2/ You can be the magic elf to someone you want to work with by using the Santa Claus technique from Bryan Harris. It takes some time, but it is highly effective.

3/ Or if you are starting a coaching program you can ask people in your network to redirect you to people who’d be interested in your work. (Find how in this article also by Bryan Harris)

Finding people ready to pay for your work is probably the most challenging part. But once you’ve found the first people interested in paying for your idea you are on good track.

3/ Develop and deliver your solution

Now that you have sold or pre-sold to your first customers or donors, it’s time to fulfill your orders, deliver on your promise and make sure you over-delight them.

Once you’ve done it, ask them these six questions from Sean D’Souza for feedback that you can reuse to get powerful testimonials:

  1. What was the obstacle that would have prevented you from buying this product?
  2. What did you find as a result of buying this product?
  3. What specific feature did you like most about this product?
  4. What are three other benefits of this product?
  5. Would you recommend this product? If so, why?
  6. Is there anything you’d like to add?

Ask their permission to record their answer and reuse these testimonials as a reference for your next customers and on your website.

4/ Find More customers

If you’ve had success finding your first clients and delivering your solution, it’s time to spread your solution to more people who need it. Keep doing what worked in the previous step.

When this stops working, you can help people for free or offer them to beta test your solution.

When you are done and you have someone happy you helped them, ask them if they’d be interested in working longer with you, or to refer you to other people who could be interested in your solutions.

You can also go look for customers or donors on online marketplaces, meetups, or online groups like Forums, Facebook or Linkedin Groups. Find what problem people have and help them solve it. Once you’ve found what they need, and if it’s relevant to them, offer your solution.

5/ Make your solution Open Source

First, document your project in Open Source once you got time, money and resources to do it, but not before. Otherwise you risk to burn out by trying to do too many things without having a proper foundation to work with.

Documenting your project and creating a space where people can share their contributions will enable a bunch of benefits:

  • You’ll be able to innovate faster
  • It will allow your community to develop and thrive by also getting free access to the rest of the community’s innovations, further reinforcing your ecosystem
  • and it will spread and develop your idea faster by allowing anyone to study, modify and distribute it, while keeping your project in the middle of the network of contributors you have started

But how can you document your project?

If you are developing a Hardware project there are some tools you can use to do that such as Wevolver or Wikifab.

Eyewriter Project in Wevolver

Eyewriter Project in Wevolver

If you are in software you can use Github to document your code and to get people’s commits and comments about it.

RepRap pro on Github

RepRap pro on Github

If you are developing open source processes like Gazelles or Afforestt you can create a dedicated page in your website for your templates

Or you could do like Arduino, set up a dedicated section to teach how others can use your solution with a “Getting Started” page, “Tutorials” and a project hub with projects from the community that anyone can reuse.

Once you’ve documented it, choose an open source license aligned with your projects goals.

To make the most of it, you’ll have to provide a space where your community can interact with your company or non-profit.

You can do this by setting up a forum in which you can directly help your community. Discourse or BBpress are some great open source forums you can use.

Arduino or Fairphone use their forums to allow their community to interact and solve each other’s problems more scalably. Even if your members will do a lot, you’ll still have to participate and block some of your teams’ time to participate and nurture the relationship with the community.

Once you’ve got that, you’ll be able to interact with your community, document and discuss your latest contributions, and welcome the contributions from others, but you’ll still need to implement at least one more step.

6/ Keep improving your product and giving back to your community to make it successful

Whenever the community develops new features or polish your processes, include these innovations in your product or service if they really solve a challenge your users have.

On the other side, whenever you develop a new innovation, document it and give it back to your community.

Some will copy it for their own use without buying from you, but this is actually good. These people are those that will bring new features and uses to your solution.

Those who don’t want to bother spending time or money in machinery to copy your solution which is 99% of any given community will buy it directly from you.

Open Source solutions traditionally remain more robust and more competitive than their closed counterparts or copycats because of their community’s contributors.

So don’t forget to include their innovations in your solution. It will benefit you, and it will also benefit the community in two ways: they’ll get access to new features and they will be able to use these new innovations in their own projects as well.

And another common problem is that most open source hardware projects Bill of Materials or kit sales aren’t supported and it is always a struggle for the community.

If it’s right for your project, sell pre-assembled projects. It can be a fantastic opportunity for B2B sales.

7/ From knowledge pooling to Money and Market pooling

Once you have a solid relationship with your community and start to have enough revenue to sustain yourself and your collaborators, you should consider:

  • Putting money aside for community projects. Wikimedia does this by keeping 10% of its spending for community grants
  • Giving back to other open source projects that have helped you get to where you are. The more you reinforce the ecosystem that has sustained you, the stronger you’ll be in the end
  • Creating a producer cooperative with your contributors. Your members can remain independent producers and working as a cooperative helps you access markets to sell products and services at a fair price thanks to your larger scale. That’s what Enspiral does with its community of freelancers

Cooperativism is still not a widespread practice among thriving Open Source projects, but from my perspective, wide-spread access to knowledge should also come with widespread access to ownership and governance of businesses.

And Cooperative platforms and companies are a perfect way to economically engage further those contributing to an open source company.

Your time to make a thriving open source project

Now you know what steps you can take to fully leverage the benefits of being open source and stop worrying of others copying you or lobbying against you.

This post is not meant as a cookie cutter solution you should follow blindly. There are millions of other ways to create anything open source, but I think these steps are pretty solid if you want to make a sustainable open source project that will endure the test of time.

What have you learned from this? Have you followed different steps to get your open source project up and running?

Liked this article? Subscribe to the free newsletter and don’t miss the next ones.

Jaime Arredondo
Find me on:

Jaime Arredondo

Creator at Bold&Open and shaker of collaborative projects
Jaime Arredondo
Find me on:

Comments

  1. Hi Jaime,
    Interesting to read your post.
    Is your point of view that the steps you outlined apply to all types of open source hardware projects (in terms of product category, user segment, and technical complexity), and all types of project creator (e.g. individual engineer, startup teams, existing companies)?

    Regarding the proprietary way:
    -You don’t always need a patent when developing and bringing to market a proprietary product.
    -As far as I know, in most patent legislations (differs per country) you can only get a patent for undisclosed inventions; the invention cannot have been seen by people from the general public yet, making the step to get first customers *before* getting a patent difficult.

    1. Author

      Hi Bram,

      Good to see you here 🙂

      Well, I think the steps outlined apply to every starting project that is not looking for funding. For projects that involve amazing technical complexity, it might be necessary to go after very big government and research funding (like ARPAnet) or big VC funding.

      But VC funding might be pretty challenging for open source businesses at the moment.

      For every other open source business that looks for crowdfunding on Kickstarter, I think these steps could work to get the idea validated, initial cash and an initial community of contributors.

      Thanks for your note on patents.

      Are you thinking of automatic copyright when you say that you don’t always need a patent when developing and bringing to market a proprietary product?

      You are right regarding the fact that patents need to be patented before being disclosed to clients. Have corrected the order of the steps in the article. Thanks Bram!

  2. Hi Jaime, I found your article and website through the Wevolver newsletter and I think they are great! In the train on the way home I read this article and have some questions and remarks which I will quickly put in a comment here, before postponing and never getting to it anymore 😉

    1. If you do not open source your product from the start, but only after you have revenues/donations to be financially sustainable, do you still call it “Open Source” from the start? Is it like a promise until it really is?

    2. Can you add some references/facts to the statements that Richard Stallmand and other examples you gave really waited with open sourcing their stuff until AFTER they got substantial revenues/donations and were financially sustainable?

    3. Can you give some reflections of how your approach of waiting with open sourcing relates to the best practices on theopensourceway dot org? See “How to loosely organize a community” Things like “Practice radical transparency from day zero”

    4. It feels like you are mixing things up a bit in your post between creating a “thriving business” and how to make something useful (something that other people want to use, that solves a real problem), the latter of course should be taken care of no matter what, but the former takes extra care and is the actual topic of your post, but I feel the distinction is not clear throughout, which makes me feel a bit lost.

    5. Do you think that being dependent on donations also counts as having a “thriving business”? Or is their some kind of gray overlap between customers who pay your prices and people/organizations who use your product and hence donate a ‘recommended’ sum?

    These are my unpolished first thoughts, I am not trying to be negative or say you are wrong in any way, I am just very pleased with finding you online, reading your post, being enthusiastic, having some conflicting thoughts of my own which I want to share with you, hoping to get some of your ideas on them!

    1. Author

      Hi James,

      Thanks so much for your thoughtful comment and for taking the time to write them own. I’ll try to answer the better I can 🙂

      1/ If you don’t open source it from the start because you lack resources, you shouldn’t say it’s open source. But you can say that you have the intention of open sourcing it when time and revenue allow for it.

      This is what SafariSeat is saying in their Kickstarter. They are clearly claiming they plan on making the blueprints open source if they can find the support to do so.

      It is usually easier, cheaper and faster to open source software, but it takes far more resources to develop its documentation and make sure its free of bugs.

      Open Hardware and processes are generally more intensive in time, and therefore in money as well.

      That’s why I believe any open project should really focus on finding the financial sustainability of the core team who will maintain the project and nurture the community.

      2/ Richard Stallman started open sourcing his work when he was employed in the MIT. But when he decided to found the GNU project he had to ask for machine and money donations.
      I believe he would have open sourced anything even if he didn’t have money, but money has allowed him to help many more people by sustaining (even frugally) the livelihood of the full-time employees of the FSF foundations.

      -Arduino’s initial work was already funded by the university that employed the founding team. (https://en.wikipedia.org/wiki/Arduino#History) But to kickstart the project they had to put money from their pocket (http://david.cuartielles.com/b/2013/08/open-hasta-que-te-comen-la-merienda/). Arduino has since been committed to be sustainable through their own sales.

      -B2 was also funded by the salary of Michel Valdrighi as a developer. He left the project because he became unemployed and didn’t have a business model for B2, unlike WordPress

      -Wikipedia’s initial work was funded by Nupedia and Bomis advertising. The first servers and bandwidth were donated by Nupedia and the initial content was also donated by Nupedia employees.

      3/ I agree that radical transparency should be practiced from day zero. The thing is that you should only practice transparency from the moment there is an idea people want to use and contribute to.

      Every project, before it is open source, has been a stealth-mode idea until someone took the time to build the interest of a community (even if this can take 5 minutes of writing a post on a forum), building the actual invention and documenting it so others can contribute.

      So I would argue that transparency from “day zero” can really start from “day zero after a lot of work has previously done”, including idea validation, finding funding or time donations, and documenting everything.

      4/ Are you feeling lost because the headline is about thriving businesses and I later include non-profits? If this is it, I agree that I might have over-stretched the purpose of the post, but the principles of an open source business, non-profit and foundation are the same.
      Namely, a great idea that people find useful and are ready to support or pay with money and / or time contributions, and great documentation to make it accessible to everyone.

      I am not sure if I am answering to your question, so let me know, will be glad to get back to you on this one 🙂

      5/ I am realizing with your questions that the article maybe should be named ” How to open source your idea to create a thriving project“. But the motivations that sustain organisations dependent on donations and organisations dependent on sales is the same:

      Your organisation delivering something that people want and feel is valuable to them.

      I don’t know if I have accurately answered to your points, but if I have left something poorly answered, please let me know. Would be glad to go deeper into these subjects 🙂

      Thanks again James!

Leave a Comment