I recently applied to an accelerator with an idea and MVP. The interviewer was a former founder with multiple exits to huge companies, he rejected me and said the idea would only work if I begin by open sourcing it and getting a large community, then try to monetize it.
I know this has worked for companies like MongoDB, but this seems like a very inefficient approach for a few reasons:
- Huge amount of work just to build an open source community, before even knowing if they'd pay for it. BUT, if you know they'd pay for it beforehand…why not skip the open source and just make a business?
- It seems like you offer the core parts of your work for free, but keep some small parts as "enterprise support" features. This seems very arbitrary and hard to pick, what if the community likes your software enough they just build these "enterprise" features onto it? Then you no longer have anything of value.
- Seems disingenuous to recruit people for an open source project and later try to sell to them, and also to take open source work that random people did and make money off it yourself.
Could anyone offer other perspectives on this? I've seen multiple small seed/series A startups operating this way, just working on building the community and hoping to monetize later. Seems like the business equivalent of building a social app and just assuming you'll eventually make money.