What are effective ways to bootstrap using your own open source?


I'm the founder of a hosted ecommerce startup. We haven't launched a public beta yet, and we're trying to earn enough runway to be able to work on the startup full time for just a few months to get it off the launchpad.

We do professional services now for clients that are totally outside our business area. What we're in the process of now is open sourcing most of our platform, selling support and enhancements, though we haven't launched that project yet, either.

Our goal is to transition from working on consulting full time / startup part time, to working on solutions for clients using our open source technology, effectively funding development of the startup directly.

Does anyone have any suggestions for how to secure partnerships and/or contracts where we retain the IP as an open source property?


asked Oct 14 '09 at 14:25
Daniel Crenna
236 points
  • Can you clarify what you mean by retaining IP, since you are talking about open sourcing your platform? – Alain Raynaud 14 years ago
  • I mean clients are resistant to paying for work that ends up as open source vs. work for hire. I'm talking about ways to build in stipulations like this into engagements. – Daniel Crenna 14 years ago

2 Answers


It sounds like the open source aspect of your strategy is irrelevant to your question. Your real problem is to find users.

Often, people hope that by making something open source, magically a community will form around it. That's just not the way it works.

answered Oct 15 '09 at 08:58
Alain Raynaud
10,927 points
  • Alain, I understand how open source works, I've been involved with it for a long time. I'm talking about using it as a stepping-stone to indirectly fund a startup rather than the standard bootstrap play where you work on things outside your area to pay the bills. It's a workable strategy and I was hoping to find people who have done something similar ahead of me. I have already found an industry partner for our open source project based on prior work. – Daniel Crenna 14 years ago


In some ways this strategy isn't so far off from doing custom code development to bootstrap your company.

At one of my startups, we did a lot of custom development work that funded our company for several years. We were able to retain ownership of all of the code as well, so we were able to re-use it to create other products that we built an additional business around.

Your strategy is very similar here. You can take the open source code that you create and build a practice around it as long as it is something that will solve problems for other companies besides your industry sponsor.

The key to doing this is to ensure that the product you are developing will solve a problem that many people have. If you can do that, it shouldn't be too hard to develop a practice around the deployment and support of the product.

The question of whether or not the code is open source is almost secondary. Personally, I like open source code, but you should check with your potential customers to see what their views are. And don't just check with developers. Check with the lawyers at the companies. See which open source licenses are acceptable to them. Pay attention to whatever feedback you can get.

It also may make a difference if this code is going to be used as part of a SaaS offering or as part of something that your customers will ship to their users. (Again, a question for the attorneys.)

Whatever you do, I think the best way to do this is to just put what you want in the contract. It might not even be an issue for your customers. If it is, you might have to sell them on it a bit, but in my experience, companies who outsource development typically don't view it as part of their core competency which means that they care less about the actual ownership of the code and are happy to think of it as a license rather than ownership of the IP.

Occasionally, you may run into a company who has some piece of functionality they want you to develop that they view as a differentiator that they want to keep exclusive. So, during the development of your system, take things like this into account. Architect the system in such a way that proprietary components could be added to create this type of exclusive functionality. Make sure that the license you choose to release this under will allow this type of model as well.

One company that I can think of who has made a similar model work is Coupa. They developed an open source e-procurement system and recently got a nice chunk of funding. It's still too early to tell whether they will be successful in the long run though.

Good luck! Let me know what you end up doing. I'm really curious to see how this works for you.

answered Oct 28 '09 at 02:17
Del Putnam
1,031 points

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