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I don't think open-sourcing an entire product is a good idea (at least on launch). However, open-sourcing components (such as your internal tools, file specs, libraries, etc) can add as much value to the open source ecosystem while preserving your competitive advantages.

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In the case of crypto/security, open sourcing your algorithms and protocols can be a big win. You get free vetting of the security of your system. If you use LGPL or another suitable license, then you can still keep other parts of your product closed. Those are the parts that actually give your product "polish" and add the most value.

(I am considering doing this for a password vault app.)

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