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Comment by PaulDavisThe1st | Hacker News Reader

This seems to me more like another case of "death of a business model caused by revenue maximization strategy". "Open-core" does not have "non-viable" or even "must-be-bait-and-switch" stamped all over it. But if the organization using it decides that its primary goal is revenue maximization (and/or significant growth), then it becomes much more questionable how it will fare.

But isn't that the goal of any business, I hear you cry? No, it certainly is not. There are thousands of small businesses even just in the USA that are happy to work within the limitations of their situation and initial desires.

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So, you’re running a small restaurant, and are fine with it staying small, as long as you can make a living. You publish all your recipes under a permissive license.

A restaurant chain starts selling your dishes, using your name, but, because of their scale, cheaper than you can afford to.

If you still manage to make money, you may be fine with that, but that’s where the correspondence breaks.

In real life, that restaurant chain offers a better product, not because its dishes are better, but because its restaurants are in better locations (have faster network connections), are closer to cinemas and theaters (they offer a zillion other products), etc., and, unlike with restaurants, you can’t make money by branding yourself as “the original”.

I don’t see that smaller restaurant staying in business, unless it starts making new recipes it keeps for itself.

I really don't see your point.

There are loads of small pizza places that make money and they don't have some "special"/"magic" pizza recipe. There are also loads of pizza chains that make money as well selling basically the same product. I am not pizza lover, for me it is just another dish so maybe I am wrong.

> loads of small pizza places that make money

these small pizzarias tend to make good pizza - much better than the chains do.

>You publish all your recipes under a permissive license.

(Setting aside the fact that it's an analogy and recipes aren't covered by copyright...) Why does it have to be a permissive license?

>A restaurant chain starts selling your dishes, using your name, but, because of their scale, cheaper than you can afford to.

Why is it okay for them to use your name? You can release free software but not let just anyone use your trademark. (See: Firefox, Red Hat, etc.)

>I don’t see that smaller restaurant staying in business, unless it starts making new recipes it keeps for itself.

Well in the case of actual small restaurants, clearly publishing a recipe book isn't necessarily catastrophic; after all, many do. Stretching the analogy this far doesn't make the point very well.

> restaurant chain offers a better product

so the end consumer benefits. I think that's an acceptable outcome tbh.

> unless [the small restaurant] starts making new recipes it keeps for itself.

which is why it doesn't make sense to give away the recipes in the first place. If restaurant's value proposition is _merely_ the recipe, and you give it away, but expect customers to be charitable and still give you money, then the business is a failing one (even if temporarily solvent).

But if your small restaurant has qualities that can't be replicated in a chain, then you have a business model (even if temporarily insolvent - you just have to hang on and not bankrupt...), and you can "afford" to give away the recipe and chalk it up to marketing expense.

This is why there's barely any real businesses selling open source games - there's hardly any differentiator there. But for enterprise/productivity applications, i think there may be - for example, professional services associated with the product, or customizations etc.

Very good point and I'd go a step further: There are lots of organizations that are not even businesses in the first place who can sustainably fund open source work.

Postgres came out of UC Berkeley. GNU stuff like emacs and gcc came out of MIT. VLC came out of École Centrale Paris. SecureDrop is developed by the Free Software Foundation. Tor was originally funded by the Open Technology Fund (USG). Firefox is from a nonprofit funded by Google advertising and born from the ashes of a commercial failure. Etc etc etc.

There may or may not be an open source business model, but there does not have to be one at all for open source to thrive.

Furthermore, commercial involvement in open-source doesn't require an "open source business model" which will placate VC-level ambitions.

For instance, the extremely popular model of a company hiring core maintainers (or other experts) for an open source project which is critical to business success continues to be viable.

The business can make its money a different way; so long as the ROI justifies open source involvement, it will happen.

It's not necessarily the organization and its founders who have revenue maximization as a primary goal. The other factor is hundreds of millions of dollars of VC money, and VCs are definitely all about revenue maximization. MapBox has raised quarter of a billion.

The conundrum is how does a company develop software as complex as MapBox without relying on VC cash to get the ball rolling.

Great point. Are there any bootstrapped $1B+ open core companies? There are a surprising number of proprietary ones (e.g. Esri, Mailchimp, etc.)

Cloudera

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