Last week, I had a conversation with a seasoned, Silicon Valley CEO. Yet, even with two successful exits and an ivy league MBA, the idea of open source still strikes chords of fear, uncertainty and doubt. So much so, he has never used it for his businesses.
Then last night, I listened to the new Radiohead album four times. With their beautiful, experiential piece of music in the background, I became reflective, and realized Radiohead used open source ideology. So did The Martian, which I also re-watched last week. And then I thought this would be a great way to explain open source to anyone, in any industry.
You see, all of this is coming on the heels of Pivotal completing our 2015 goal of open sourcing all of our major software components. With 10 million lines of code published, this is far from a trivial undertaking. In fact, given the amount of work, many people question the sanity of it. Why would any for-profit company want to give all its hard work away for free?
Fast forward to last week’s big news of Ford and Microsoft investing in Pivotal, and 30% of the Fortune 100 signing on as customers, and it’s pretty obvious that open source does make financial sense.
Yet, I still have these conversations asking why would we give it away for free?
I think the most straightforward way to start is by quoting Andy Weir, the author of The Martian, from his Cloud Foundry Summit keynote last June.
“You can be an intellectual property sharing hippie and a money grubbing capitalist at the same time.” — Andy Weir, author of The Martian
SIDE NOTE: CF Summit is really a great conference for forward thinkers on the internet and the next one is coming up soon on May 23 in Santa Clara, CA.
Why Is Open Source Ideology So Compelling?
I am 10 years deep into my love affair with open source. In 2006, with a degree in economics and a decade of working for enterprise software companies, I found myself at a crossroads. I was changing jobs, and curious what else was out there.
I found a little startup in San Francisco that focused on application performance management called Hyperic. While the age of the internet dramatically shifted these kinds of tools to be a much cooler part of the sysadmin’s toolbelt, the category is hard to get really excited about for most — and frankly, when I walked in the door, I wasn’t even considering it. I thought I was just doing someone a favor.
Hyperic CEO Javier Soltero broke through my reluctance, partly with his charm and but mostly by helping me to see two big opportunities. First, the digital revolution was just beginning. Companies like Netflix, Facebook, and Google were changing the foundation of how software was built. This technology would be broad enough that I would get to work with these kinds of internet industry leaders and stay cutting edge. This idea delighted my inner nerd.
But open source gave me pause. Actually, the idea of it gave me heartburn, just like it does for my CEO friend today.
Understanding my initial skepticism, Javier gave me a quick primer on open source and set me up to meet withBenchmark Capital. At the time, Peter was rumored to have the midas touch in open source. Now it seems it is confirmed, as I see he is officially number 2 on Forbes Midas List of venture capitalists for 2015. Given his previous moniker, I wonder if they made that award just for him.
Peter is one of the people that shapes Silicon Valley, and is very convincing on the subject of open source. We talked for hours about supply and demand, about the change in buying patterns, about the formula to capitalizing on the top 1–2%, and about how it lowered the cost and time of sales while lowering the risk of bugs substantially — all with the goal of making it easier on the software startups to enter into the market and dramatically right sizing the price for the customer.
You’ll have to trust me that these were all incredibly convincing arguments that I’ve yet to see succinctly brought home on paper.
How The Martian Explains The Open Source Movement
First of all, I highly recommend watching The Martian if you haven’t already. It has everything you’d want — great director, all-star cast, beautiful imagery, and of course a compelling story that engages and entertains you the entire time.
What is not obvious from watching it, is that it is a story that was brought to you using open source ideology.
I am not revealing a giant secret here. The Martian’s author, Andy Weir openly discusses how he used open source ideology. In fact, I encourage you to watch Andy’s 11 and a half minute talk titled How I Accidentally Used Open Source Ideology to Make a Bestselling Novel. It’s very entertaining. (I’ve embedded it at the end of this post.)
Let me walk you through the key points on his journey.
He Gave It Away For Free
Writing science fiction was something Andy enjoyed. He also realized it is an incredibly hard business to break into. He had a terrible time getting an agent to talk to him — nevermind sign him. This narrowed the paths to breaking into the book publishing business. So, he built a website, invested his own time in writing and let everyone read it for free. He simply asked for those interested to give him their email address if they wanted to do so. 3,000 of them did, just because they already knew they liked his stuff.
So, by giving it away for free, Andy developed an early adopter market for his work.
He Built A Community That Guided Him
Andy published his book in chapters. He let his community know when new chapters arrived, and delved into conversations with people who analyzed his work. They pointed out problems in the plot. They discussed ways to fix it. They discussed options for the story and gave Andy ideas he may not have thought up on his own. Importantly, they also requested that he make it easier for them to consume his technology, and they would be willing to pay for it.
They pointed out problems in the plot. They discussed ways to fix it. They discussed options for the story and gave Andy ideas he may not have thought up on his own.
So, by engaging his community, Andy had access to thousands of editors who improved his story, and with the merits of his product alone, found a way to monetize his product that actually made his users happy.
He Kept Prices Low And Grew His Market
Andy’s users asked him to make it so they could read his book on their e-readers. He made a digital copy for download, but some users still wanted the ease of just downloading it from Amazon. They didn’t want to deal with the technical hassles of set up. So, he put it up on Amazon for the lowest price point allowed: $0.99. His followers bought it, but now it was also marketed to more people. With the price point at the absolute minimum, some people who just liked the genre took a chance and read it. Eventually that happened enough and one day, Andy’s book showed up on one of Amazon’s myriad of top 10 lists.
So, by keeping the focus on getting as many people to read Andy’s books rather than fully monetize the book, Andy became one of Amazon’s top selling authors. Which attracted a much bigger community, quickly.
He Created New Derivative Works And Capitalized
Now that Andy had become a bestseller, his stature in the industry changed. He was a known success. His book was popular and therefore validated. Now it became infinitely easier to get an agent, a book deal and sell the rights to the movie — something he shares happened in the span of FOUR DAYS. By the time the movie was being shot, Andy only had to cash checks, retire from his day job and return to his community and writing for his next effort.
So, by leveraging his successful community, Andy inherently proved the merits of his project, and was able to quickly attract new ways to repurpose his work to make a lot of money. Importantly, at the same time, Andy made his supporters extremely happy.
The Win-Win Factor Of The Open Source Movement Is Key
If you take the time and go through Andy’s story again, you could substitute successful open source software projects in as the subject easily. Focus on building a product that has an addressable market. Reduce barriers to entry so that market open for anyone with value to participate and validate, which both expands your addressable market size and captures even more feedback. Listen, iterate, and expand on what that market wants.
Give them what they want, and find an agreeable way for that market to pay. If you provide real value, they will do so happily.
Former Pivotal CEO (and current Chairman) Paul Maritz frequently coaches us Pivots by reminding us that:
At the end of the day, people remember not just what you did, but how you did it. People won’t begrudge you the success if they knew you gave as much as you took along the way.
This win-win factor is why it works. It’s kinder. It builds a bi-directional support network where, if you do it right, and you deliver a product they love through their own feedback, you can build a fanbase that will carry you to success. And it’s a legacy you will be proud of.
How Radiohead Used Open Source Ideology
The English alt-rock band Radiohead also used open source ideology in 2008 too with their release of In Rainbows. Available as a free download from the artist website, in the age of massive file sharing and piracy, their fans, when faced with the option to “pay-what-you-want” gave them “more money before In Rainbows was physically released then they made in total on the previous album Hail To the Thief”. Then they still sold 3 million physical albums the next year because everyone was already talking about it and listening to it. In a time when Napster, piracy and file sharing was siphoning money away from the music industry at an unprecedented pace, a successful artist worked with their community of fans, and were rewarded handsomely for it.
They did not exactly repeat this plan yesterday, but they didn’t have to. There isn’t just one way to go with open source.
With their release of ‘A Moon Shaped Pool’, they are not giving away the music for free, or pay what you like again. However, they have been teasing us with snippets of the first single, ‘Burn The Witch’ for nearly a decade.
Then, last week they released a free music video for it. For 4 days, the internet was abuzz with an openly accessible experience for all. It built demand. It built a community conversation. Social media exploded. People made quick plans to have listening parties for it. And while record sales reports are a few days off, my bet is they did fantastic.
You see, Radiohead gave part of the album away for free, opening up the conversation to everyone in their community. Initiating a huge wave of demand. And 4 days later they offered a complete version of the work, that I guarantee millions more paid for because of the momentum they built.
Pivotal took this one step further with our platform for delivering software rapidly, consistently and reliably at scale, namely Cloud Foundry. Years of engineering work, all in open source, dictated that this project was too important for the industry, so we and surrendered the entire project to an open foundation.
We not only gave it away, we recruited other software giants like IBM, SAP, HP and Intel, among others, to embrace it. Since this particular product is quite literally the foundation for how software will be run in the future, all of those companies stand to make money — a lot of money too. Billions.
So we gave it away to everyone. And the first year after that happened, we broke records for open source software revenue. Meanwhile, Ford — a CAR company — and Microsoft decided we are working on such an important project, they need to invest hundreds of millions of dollars in us so that we keep working.
It really is that simple.
Open Source Ideology Alone Does Not Equate Success
Of course, just because it is open, or open source, does not mean it is an instant success. You have to provide value to your market. And that takes work, and likely a good deal of time and patience. The Martian took Andy years to refine and finally capitalize on. Cloud Foundry incubated for several years before there was even a commercial offering. Radiohead also spent years on their album. Nearly a decade, in fact.
It’s important not to trivialize the work that went into these projects. Each of these examples applied their own levels of innovation and a ton of hard work. But, by keeping their communities in mind, and using open source ideology, each of these projects was able to be that “intellectual property sharing hippie and a money grubbing capitalist” Andy referred to. And no one is begrudging them their success.