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Open source – a business lesson

By November 16, 2006No Comments2 min read

There has been a longstanding debate as to the different business models that might be out there about the Open Source business model (OSBM for the purposes of this piece). This post is inspired by the fact that Big In Japan has released the codebase to many of their popular web2.0 projects, and are essentially challenging the many conventions that are ever present in this generation of web apps.There has been one prevailing business model in open source over the last decade, and that has been a support/service model: you get the car for free, but when you have trouble filling it with gas, you have to pay by the minute for help. Now this is a fine model, it works very well for a number of companies, but its not the only one out there. Biggu has turned that model a bit, and used the open source model as a way of continuing the development of their non-revenue generating tools, which are really what you could call loss leaders. These small applications are used to get the buzz and traffic about them, and then in turn point people to their pro service via podserve/fancast. This is quite smart on a number of levels, the first being: product doesn’t generate much money, so let the fans keep building it. Secondly, it builds a community around your products and services. These people are your BEST sales tool.Once people start realizing there is alot of marketing potential in open source, there will be a growth in the number of projects out there. I’m definitely going to keep talking about this subject more as I think there is a lot of stuff to be talked about. Think of this post as an introductory lead in to more on Open Source.