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Monetizing open source software is a challenging task, but it can also be highly rewarding. Unlike traditional software, you're essentially competing against a free version of your product. So, how do you sell something that is inherently free? This guide will delve into the complexities of selling open source software and provide actionable strategies tailored for sales and marketing teams. We'll explore the nuances of open source business models, uncover ways to turn anonymous users into qualified leads, and dissect growth strategies that work.
Before Talking About Sales/Marketing, A Word on Product
Unique Value Proposition
One of the most significant mistakes open source companies make is believing that users will naturally graduate from the free product to the paid version. It doesn't work that way. You must first identify what unique value you offer via your paid offerings. If you can't articulate why a user should pay for your software, you have a problem. Therefore, it's crucial to answer questions like:
Why would a free user upgrade to your paid version?
What unique features does your paid version offer that the free one doesn’t?
Who exactly is your target audience for the paid version?
Getting clarity on these will not only improve your product but also sharpen your sales and marketing strategies.
Understanding the Adoption Lifecycle and the Sales Motion
Identifying Customer Categories
You're going to encounter three types of potential customers:
Those already using your open-source product.
Those using a competitive product.
Those who you know little to nothing about, who you suspect may have an interest or a need your software can help with.
Understanding your target audience is crucial in determining your sales approach. It's essential to differentiate between three groups: existing users of your open-source product, users of competing products, and those unfamiliar with your offering.
The Low-Hanging Fruit: Current Users
Selling to existing users is often easier than acquiring new ones. These are your open source qualified leads (OQLs). An OQL is a user who has performed certain predictive activities, like downloading software packages over a sustained period, which indicates a potential for a commercial relationship. Focus on identifying as many OQLs as possible using techniques such as anonymous download tracking to populate your sales funnel.
Open Source Qualified Leads (OQLs)
The best pool to fish in for commercial outcomes are existing users of your open-source software. These are what we call Open Source Qualified Leads (OQLs). An OQL is a user or a company who has engaged with your open-source product to a level that suggests they might be ripe for upselling.
What Makes an OQL?
For example, an ideal OQL might download the software multiple times over several days, engage actively in community forums, and visit documentation pages. Consistent activity over a sustained period can indicate a high likelihood of conversion.
The Tough Nuts: Competing Users
Selling against a competing open-source technology requires a different playbook. This involves demonstrating a technically superior product. You need to arm yourself with a competitive analysis and be prepared to answer why your software is better. Here, DevRel activities and internal advocates can be your secret weapons.
Selling to Users of Competing Open Source Solutions
Winning over users from other solutions—open-source or not—requires a deep understanding of what your software does better and why it matters to your target customer. Developing a comprehensive battle card can help your sales team understand and articulate these advantages effectively. This is a much longer sales cycle than selling to existing users of your open source software. Consider this: A user using another open source software and paying an external vendor will have engineering expertise and resources already in place for that software. What is the cost to replace that? Additionally, if they are paying for support and an enterprise version, they will have a contract which could be for multiple years depending on the software and the organization's willingness to purchase multiyear deals for discounts. How likely is it that this company would switch tech stacks and give up the remainder of their support contract for a migration to your solution? In my experience, you may lead the seeds for a migration months or even years before a renewal window, but most enterprises would prefer to wait until current support contracts expire.
There are several catalysts which may improve the likelihood of a productive sales discussion and a company being more receptive to switching technologies:
Employee turnover. Open source developers, especially working in smaller or medium sized companies tend to be given a lot of leeway into choosing their tech stacks. When employees or management changes at one of these organizations often new people will bring in new ideas and preferences. Looking at LinkedIn for recent turnover and seeing where people came from can help enlighten potential willingness to move.
Organic traffic to your project or community. Even if someone is an entrenched user of a competitive open source solution, seeing ongoing or sustain traffic to docs or website pages can show increasing interest.
Content: A lot of engineers write blogs or give conference talks about the technology they work on. You can learn alot from these on their needs, their issues, and often their frustrations with current technology.
Public issues: If a company has a visible outage or issue with technology, you will often see them publicly publish a post mortem mentioning certain issues with technology they use. This can provide interesting insight into where their current technology maybe failing them.
Competing Against Cloud Providers
There has been a rising number of examples of companies moving away from open source licenses to source available licenses that specifically limit cloud providers or limit competition. This may make you take pause as you evaluate your offerings and licenses. Let me give some general advise and perspective. When you're selling open source software, your competitors aren't just other software companies; you're also up against cloud providers offering similar services. Why should a potential customer choose your offering over an established cloud service? The answer lies in your unique value proposition, not in your license.
One of the unique challenges open-source companies face is competing with cloud providers who offer managed versions of their own open-source software. These cloud giants have the advantage of scale, a vast user base, and deep pockets for marketing and customer acquisition. This can be particularly daunting for smaller open-source enterprises that can't compete on those levels. The cloud providers can essentially 'commoditize' your product, offering it as a part of their broader service suite, thereby making it difficult for you to monetize the very software you developed.
To effectively compete, open-source companies have to offer something that these cloud providers can't. This could be specialized expertise, superior customer service, or unique add-on features not available in the cloud provider's version. The aim is to move from providing just 'software' to delivering a full-fledged 'solution,' complete with services and support, that can tackle specific business problems better than a cloud provider's one-size-fits-all offering. In this way, you aren't just selling software; you're selling a comprehensive package that offers greater value, thus giving customers a compelling reason to choose you over a big cloud provider. This is often called the "open core" model, where the core product is open source, but specialized modules and services are proprietary and come at a cost.
Navigating the competitive landscape with cloud providers is not easy, but by understanding your unique value proposition and clearly articulating why and how you offer a better solution, you can not only survive but thrive. It's about shifting the conversation from price to value and establishing a strong brand identity that stands apart from the commoditized offerings of large cloud providers.
The Enigma: The Unknowns
These are the toughest to deal with, but also where your anonymous website demasking technology and other data analytics techniques come into play. The more you can move these unknown users to known OQLs, the better.
Strategies for Identification (Turning unknown to Known)
Discovering who these users are can be a challenge. This is where tactics like anonymous download tracking, website de-anonymizing technology, and gated content come into play. The objective is to move users from the 'unknown' category to the 'known' one, making them easier to target for sales and marketing efforts.
Dealing with the third category of users, the unknown ones, poses the greatest challenge and demands the implementation of anonymous website demasking technology and various data analytics strategies.
The Long Term Relationship Play
One of the unique characteristics of the open-source landscape is the significant influence individual developers wield in driving technology adoption within larger organizations. Unlike traditional sales models, where decisions are top-down and often made by C-suite executives, the open-source world frequently sees grassroots, bottom-up adoption. Developers, drawn to the technical merits and community support of an open-source project, will often integrate it into their workflows. Over time, this adoption can scale up to departmental and, eventually organizational levels. As the organization grows more dependent on the technology, there's a heightened likelihood that they will invest in a supported, often premium, version of the software to meet scalability, security, and compliance needs.
This bottom-up model of technology adoption makes building relationships crucial, and it's why Developer Relations (DevRel) has gained prominence in recent years. DevRel goes beyond mere marketing or sales, focusing on building a genuine, technical relationship with the developers who are the new decision-makers in the technology stack. By providing resources, support, and a feedback loop for these key influencers, companies can ensure not only that their technology is being adopted but that it is being advocated for within the organization. This peer-to-peer advocacy is often more persuasive than any marketing campaign could be, as it comes from a trusted source who understands the organization's specific challenges and needs. The focus is less on immediate sales conversion and more on long-term relationship building, which, in the open-source ecosystem, can be a game-changer in securing large, lucrative contracts with organizations.
Adding this relationship-driven focus to your open-source sales strategy can open doors that might otherwise remain closed. It humanizes your product and company, fosters a community of engaged users who can turn into advocates, and most importantly, it builds trust. In an arena where technical merit is table stakes, trust and relationships become the differentiating factors that turn users into paying customers.
The Role of Community in Open Source Sales
Community Engagement: A Double-Edged Sword
Open source projects inherently involve a community of users who contribute to and benefit from the software. While this is fantastic for user adoption and word-of-mouth promotion, it can also be a challenge for sales and marketing teams. The reason is simple: community members often demand why they should pay for something they've been using for free.
However, it's essential to view community engagement not as a challenge but as an opportunity. When users are engaged, they are not just users but also potential customers.
Measuring Community Health
Community health metrics are indicators of how engaged and active your community is. They are a subset of OQL metrics but focused on community channels like forums, social media, and other public venues. An active community can act as an unpaid sales force, advocating for your product and significantly impacting your sales.
Strategies for Enhancing Community Health
Regular Updates: Keep your community informed about what's happening, both in terms of software updates and company news.
Contributor Recognition: Recognize and reward users who make significant contributions.
Community Managers: Hire or designate community managers to moderate and stimulate discussions.
External Evangelists: The Powerhouses of Organic Growth
External evangelists can be invaluable assets. Unlike paid promotions, recommendations from external evangelists are seen as unbiased and genuine, thereby carrying more weight. Cultivating relationships with these influencers can dramatically improve your sales numbers without a corresponding increase in your marketing spend.
Privacy Concerns and Sales Strategies
With increasing scrutiny on data privacy and new regulations coming into force globally, open source companies must tread carefully when it comes to gathering user data.
Navigating the Privacy Maze
While privacy laws limit what you can do, they don't completely block your path. Strategies for navigating these challenges include:
Clear Communication: Always be clear about what data you're collecting and why.
User Consent: Where possible, gain user consent for data collection.
Data Minimization: Collect only what is absolutely necessary.
Lead Scoring: Turning Data into Gold
Lead scoring can help you identify promising leads from the sea of users. This involves assigning values to potential leads based on their activities and engagement level. While this method isn't foolproof, it significantly improves the efficiency of your sales pipeline.
Risk Mitigation Strategies
Churn Prediction
Using OQL and other behavioral data, you can predict which companies are at risk of churning. For instance, if a user has reached an OQL3 level and maintained it for an extended period but has recently shown reduced engagement, it's a red flag.
Addressing Potential Issues
The moment you identify a potential churn, the account management team should intervene. Whether it's an additional training session, a product walkthrough, or troubleshooting technical issues, proactive engagement can often prevent a churn.
Why Sales and Marketing Teams Should Care About OQLs
Open source is not a business strategy, nor is it a go-to-market strategy. It is a community and distribution strategy. You can integrate the community and the distribution into your go-to-market strategy for your commercial open source business, but that requires you to treat the “open source pipeline” like you treat the “sales pipeline”. This means that you should be tracking adoption and growth of the user base and which of these users end up becoming customers. You want a full view of the lifecycle and that means tracking something like an OQL. OQL’s are important for:
Enriching Sales Pipeline
OQLs are an enriched source of leads. They have a proven level of engagement and therefore a higher likelihood of converting into a paying customer.
Risk Assessment
Tracking a company’s OQL status over time can help in assessing potential risks, enabling the business to take proactive measures.
Resource Allocation
Knowing which leads are more likely to convert allows for better allocation of sales and marketing resources.
Track OQLs (Open Source Qualified Leads) by treating the "open source pipeline" like the "sales pipeline" in your commercial open source business strategy.
Conclusion: Putting It All Together
Open source sales require a multi-faceted approach that differs significantly from that of traditional software sales. By incorporating the strategies outlined in this guide, sales and marketing teams can better navigate the unique challenges posed by open source sales. The ultimate goal is to build a strong, active community around your product, identify and engage with Open Source Qualified Leads, and turn them into paying customers, all while maintaining a transparent and ethical stance on data and privacy. And remember, the community is not just a user base; it's a potential customer base.
By focusing on these strategies and continuously adapting to market and user behavior trends, you can build a sustainable, profitable business around your open source software. Happy selling!
I hope this guide serves as a valuable resource for sales and marketing teams navigating the intricacies of selling open-source software. If you have any questions or would like to discuss further, please don't hesitate to reach out. Thank you for reading!
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Monetizing open source software is a challenging task, but it can also be highly rewarding. Unlike traditional software, you're essentially competing against a free version of your product. So, how do you sell something that is inherently free? This guide will delve into the complexities of selling open source software and provide actionable strategies tailored for sales and marketing teams. We'll explore the nuances of open source business models, uncover ways to turn anonymous users into qualified leads, and dissect growth strategies that work.
Before Talking About Sales/Marketing, A Word on Product
Unique Value Proposition
One of the most significant mistakes open source companies make is believing that users will naturally graduate from the free product to the paid version. It doesn't work that way. You must first identify what unique value you offer via your paid offerings. If you can't articulate why a user should pay for your software, you have a problem. Therefore, it's crucial to answer questions like:
Why would a free user upgrade to your paid version?
What unique features does your paid version offer that the free one doesn’t?
Who exactly is your target audience for the paid version?
Getting clarity on these will not only improve your product but also sharpen your sales and marketing strategies.
Understanding the Adoption Lifecycle and the Sales Motion
Identifying Customer Categories
You're going to encounter three types of potential customers:
Those already using your open-source product.
Those using a competitive product.
Those who you know little to nothing about, who you suspect may have an interest or a need your software can help with.
Understanding your target audience is crucial in determining your sales approach. It's essential to differentiate between three groups: existing users of your open-source product, users of competing products, and those unfamiliar with your offering.
The Low-Hanging Fruit: Current Users
Selling to existing users is often easier than acquiring new ones. These are your open source qualified leads (OQLs). An OQL is a user who has performed certain predictive activities, like downloading software packages over a sustained period, which indicates a potential for a commercial relationship. Focus on identifying as many OQLs as possible using techniques such as anonymous download tracking to populate your sales funnel.
Open Source Qualified Leads (OQLs)
The best pool to fish in for commercial outcomes are existing users of your open-source software. These are what we call Open Source Qualified Leads (OQLs). An OQL is a user or a company who has engaged with your open-source product to a level that suggests they might be ripe for upselling.
What Makes an OQL?
For example, an ideal OQL might download the software multiple times over several days, engage actively in community forums, and visit documentation pages. Consistent activity over a sustained period can indicate a high likelihood of conversion.
The Tough Nuts: Competing Users
Selling against a competing open-source technology requires a different playbook. This involves demonstrating a technically superior product. You need to arm yourself with a competitive analysis and be prepared to answer why your software is better. Here, DevRel activities and internal advocates can be your secret weapons.
Selling to Users of Competing Open Source Solutions
Winning over users from other solutions—open-source or not—requires a deep understanding of what your software does better and why it matters to your target customer. Developing a comprehensive battle card can help your sales team understand and articulate these advantages effectively. This is a much longer sales cycle than selling to existing users of your open source software. Consider this: A user using another open source software and paying an external vendor will have engineering expertise and resources already in place for that software. What is the cost to replace that? Additionally, if they are paying for support and an enterprise version, they will have a contract which could be for multiple years depending on the software and the organization's willingness to purchase multiyear deals for discounts. How likely is it that this company would switch tech stacks and give up the remainder of their support contract for a migration to your solution? In my experience, you may lead the seeds for a migration months or even years before a renewal window, but most enterprises would prefer to wait until current support contracts expire.
There are several catalysts which may improve the likelihood of a productive sales discussion and a company being more receptive to switching technologies:
Employee turnover. Open source developers, especially working in smaller or medium sized companies tend to be given a lot of leeway into choosing their tech stacks. When employees or management changes at one of these organizations often new people will bring in new ideas and preferences. Looking at LinkedIn for recent turnover and seeing where people came from can help enlighten potential willingness to move.
Organic traffic to your project or community. Even if someone is an entrenched user of a competitive open source solution, seeing ongoing or sustain traffic to docs or website pages can show increasing interest.
Content: A lot of engineers write blogs or give conference talks about the technology they work on. You can learn alot from these on their needs, their issues, and often their frustrations with current technology.
Public issues: If a company has a visible outage or issue with technology, you will often see them publicly publish a post mortem mentioning certain issues with technology they use. This can provide interesting insight into where their current technology maybe failing them.
Competing Against Cloud Providers
There has been a rising number of examples of companies moving away from open source licenses to source available licenses that specifically limit cloud providers or limit competition. This may make you take pause as you evaluate your offerings and licenses. Let me give some general advise and perspective. When you're selling open source software, your competitors aren't just other software companies; you're also up against cloud providers offering similar services. Why should a potential customer choose your offering over an established cloud service? The answer lies in your unique value proposition, not in your license.
One of the unique challenges open-source companies face is competing with cloud providers who offer managed versions of their own open-source software. These cloud giants have the advantage of scale, a vast user base, and deep pockets for marketing and customer acquisition. This can be particularly daunting for smaller open-source enterprises that can't compete on those levels. The cloud providers can essentially 'commoditize' your product, offering it as a part of their broader service suite, thereby making it difficult for you to monetize the very software you developed.
To effectively compete, open-source companies have to offer something that these cloud providers can't. This could be specialized expertise, superior customer service, or unique add-on features not available in the cloud provider's version. The aim is to move from providing just 'software' to delivering a full-fledged 'solution,' complete with services and support, that can tackle specific business problems better than a cloud provider's one-size-fits-all offering. In this way, you aren't just selling software; you're selling a comprehensive package that offers greater value, thus giving customers a compelling reason to choose you over a big cloud provider. This is often called the "open core" model, where the core product is open source, but specialized modules and services are proprietary and come at a cost.
Navigating the competitive landscape with cloud providers is not easy, but by understanding your unique value proposition and clearly articulating why and how you offer a better solution, you can not only survive but thrive. It's about shifting the conversation from price to value and establishing a strong brand identity that stands apart from the commoditized offerings of large cloud providers.
The Enigma: The Unknowns
These are the toughest to deal with, but also where your anonymous website demasking technology and other data analytics techniques come into play. The more you can move these unknown users to known OQLs, the better.
Strategies for Identification (Turning unknown to Known)
Discovering who these users are can be a challenge. This is where tactics like anonymous download tracking, website de-anonymizing technology, and gated content come into play. The objective is to move users from the 'unknown' category to the 'known' one, making them easier to target for sales and marketing efforts.
Dealing with the third category of users, the unknown ones, poses the greatest challenge and demands the implementation of anonymous website demasking technology and various data analytics strategies.
The Long Term Relationship Play
One of the unique characteristics of the open-source landscape is the significant influence individual developers wield in driving technology adoption within larger organizations. Unlike traditional sales models, where decisions are top-down and often made by C-suite executives, the open-source world frequently sees grassroots, bottom-up adoption. Developers, drawn to the technical merits and community support of an open-source project, will often integrate it into their workflows. Over time, this adoption can scale up to departmental and, eventually organizational levels. As the organization grows more dependent on the technology, there's a heightened likelihood that they will invest in a supported, often premium, version of the software to meet scalability, security, and compliance needs.
This bottom-up model of technology adoption makes building relationships crucial, and it's why Developer Relations (DevRel) has gained prominence in recent years. DevRel goes beyond mere marketing or sales, focusing on building a genuine, technical relationship with the developers who are the new decision-makers in the technology stack. By providing resources, support, and a feedback loop for these key influencers, companies can ensure not only that their technology is being adopted but that it is being advocated for within the organization. This peer-to-peer advocacy is often more persuasive than any marketing campaign could be, as it comes from a trusted source who understands the organization's specific challenges and needs. The focus is less on immediate sales conversion and more on long-term relationship building, which, in the open-source ecosystem, can be a game-changer in securing large, lucrative contracts with organizations.
Adding this relationship-driven focus to your open-source sales strategy can open doors that might otherwise remain closed. It humanizes your product and company, fosters a community of engaged users who can turn into advocates, and most importantly, it builds trust. In an arena where technical merit is table stakes, trust and relationships become the differentiating factors that turn users into paying customers.
The Role of Community in Open Source Sales
Community Engagement: A Double-Edged Sword
Open source projects inherently involve a community of users who contribute to and benefit from the software. While this is fantastic for user adoption and word-of-mouth promotion, it can also be a challenge for sales and marketing teams. The reason is simple: community members often demand why they should pay for something they've been using for free.
However, it's essential to view community engagement not as a challenge but as an opportunity. When users are engaged, they are not just users but also potential customers.
Measuring Community Health
Community health metrics are indicators of how engaged and active your community is. They are a subset of OQL metrics but focused on community channels like forums, social media, and other public venues. An active community can act as an unpaid sales force, advocating for your product and significantly impacting your sales.
Strategies for Enhancing Community Health
Regular Updates: Keep your community informed about what's happening, both in terms of software updates and company news.
Contributor Recognition: Recognize and reward users who make significant contributions.
Community Managers: Hire or designate community managers to moderate and stimulate discussions.
External Evangelists: The Powerhouses of Organic Growth
External evangelists can be invaluable assets. Unlike paid promotions, recommendations from external evangelists are seen as unbiased and genuine, thereby carrying more weight. Cultivating relationships with these influencers can dramatically improve your sales numbers without a corresponding increase in your marketing spend.
Privacy Concerns and Sales Strategies
With increasing scrutiny on data privacy and new regulations coming into force globally, open source companies must tread carefully when it comes to gathering user data.
Navigating the Privacy Maze
While privacy laws limit what you can do, they don't completely block your path. Strategies for navigating these challenges include:
Clear Communication: Always be clear about what data you're collecting and why.
User Consent: Where possible, gain user consent for data collection.
Data Minimization: Collect only what is absolutely necessary.
Lead Scoring: Turning Data into Gold
Lead scoring can help you identify promising leads from the sea of users. This involves assigning values to potential leads based on their activities and engagement level. While this method isn't foolproof, it significantly improves the efficiency of your sales pipeline.
Risk Mitigation Strategies
Churn Prediction
Using OQL and other behavioral data, you can predict which companies are at risk of churning. For instance, if a user has reached an OQL3 level and maintained it for an extended period but has recently shown reduced engagement, it's a red flag.
Addressing Potential Issues
The moment you identify a potential churn, the account management team should intervene. Whether it's an additional training session, a product walkthrough, or troubleshooting technical issues, proactive engagement can often prevent a churn.
Why Sales and Marketing Teams Should Care About OQLs
Open source is not a business strategy, nor is it a go-to-market strategy. It is a community and distribution strategy. You can integrate the community and the distribution into your go-to-market strategy for your commercial open source business, but that requires you to treat the “open source pipeline” like you treat the “sales pipeline”. This means that you should be tracking adoption and growth of the user base and which of these users end up becoming customers. You want a full view of the lifecycle and that means tracking something like an OQL. OQL’s are important for:
Enriching Sales Pipeline
OQLs are an enriched source of leads. They have a proven level of engagement and therefore a higher likelihood of converting into a paying customer.
Risk Assessment
Tracking a company’s OQL status over time can help in assessing potential risks, enabling the business to take proactive measures.
Resource Allocation
Knowing which leads are more likely to convert allows for better allocation of sales and marketing resources.
Track OQLs (Open Source Qualified Leads) by treating the "open source pipeline" like the "sales pipeline" in your commercial open source business strategy.
Conclusion: Putting It All Together
Open source sales require a multi-faceted approach that differs significantly from that of traditional software sales. By incorporating the strategies outlined in this guide, sales and marketing teams can better navigate the unique challenges posed by open source sales. The ultimate goal is to build a strong, active community around your product, identify and engage with Open Source Qualified Leads, and turn them into paying customers, all while maintaining a transparent and ethical stance on data and privacy. And remember, the community is not just a user base; it's a potential customer base.
By focusing on these strategies and continuously adapting to market and user behavior trends, you can build a sustainable, profitable business around your open source software. Happy selling!
I hope this guide serves as a valuable resource for sales and marketing teams navigating the intricacies of selling open-source software. If you have any questions or would like to discuss further, please don't hesitate to reach out. Thank you for reading!
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Tracking downloads of your open-source projects is key to understanding user engagement. With Scarf, you can see which businesses are using your project, which versions are popular, which platforms are being targeted, and more. This playbook will show you how to set up Scarf to monitor your project’s downloads.
On July 16th, we hosted our first-ever Scarf Summit, celebrating analytics for open source and the significant improvements we’ve made to the Scarf platform. In case you missed it, here’s a recap of all the key updates shared by our Engineering Leader, Aaron Porter.
In this episode of the Haskell Interlude Podcast, Joachim Breitner and Andreas Löh sit down with Avi Press, the founder of Scarf, to discuss his journey with Haskell, the telemetry landscape in open source software, and the technical as well as operational challenges of building a startup with Haskell at its core.
Scarf Basic and Premium tiers have long had the ability to sort their open source usage data by company, domain, events, last seen, and funnel stage. But our customers have been wanting more. Now you can hyper target by combining region, tech stack, and funnel stage, making outreach as refined and low friction as possible.
Understanding open source user engagements and usage is obscured by a lack of actionable data, a result of its inherent openness and anonymity. Embracing a data-driven approach to open source projects helps them not only grow, but also understand the keys to their success, benefiting everyone involved.
As an open source company, Garden knew how hard it was going to be to get usage data. Adding Scarf for analytics on open source downloads turned anonymous numbers into company names. Using Scarf’s privacy-first analytics also helped Garden to know what kind of companies were using their OSS and where they were located.
Once Heroic started using Scarf, they learned that they were even more popular than they thought they were. Using Scarf, they were able to determine where, by country, their users were downloading from, and how many per day.
Any LF project maintainer can use Scarf without needing any further approval from the foundation. Scarf is offering all LF projects free accounts with a few additional features over our base free version. LF projects will get usage data like docs, downloads, and page views with unlimited free seat licenses and data retention.
Union is an open source first company. It uses Scarf to drive their DevRel strategy and improve their open source project. It also uses Scarf to power its consultative sales approach to help customers where it makes sense. Union has been successfully leveraging Scarf funnel analysis to shape the product to better fit the market so that they can focus on ensuring that companies can get value from Flyte sooner.
In this latest episode of "Hacking Open Source Business," Avi Press and Matt Yonkovit sit down with Adam Jacob, the co-founder of Chef and current CEO of System Initiative. With a rich history in the open-source world and numerous thought-provoking opinions, Adam delves into the intricacies of open-source commercialization, offering valuable insights and alternative strategies to the commonly held Open Core model.
Smallstep wanted to understand the impact of their open-source project on enterprise adoption of their commercial security solutions. Smallstep uses Scarf to better understand user interactions and software usage, providing insights into its user base and potential customer segments as an important signal for commercial use.
Diagrid was founded in 2022 by the creators of the popular Dapr open source project. Making data-driven decisions for a commercial company built on an open source project that had no real concrete data, was a real challenge. Diagrid translated Scarf data into valuable insights for marketing and product development of their commercial product.
When we approached the project of building Scarf, we turned to our favorite language: Haskell. Little did we know, this decision would shape our story in more ways than one.
Unstructured had so much usage of their open source, but so little data. Prior to Scarf, they mostly had GitHub information for things like downloads and stars. It was difficult to separate the good signal from the noise without any specific information that would help them to better target this large and growing open source user base or data to influence their product roadmap.
It’s happening! Scarf is part of the Common Room Signal Partners program. Soon, you will be able to integrate your Scarf data into your Common Room platform for a more complete view of all of your user signals.
We are thrilled to announce that we have successfully completed a Type 1 System and Organization Controls 2 (SOC 2) examination for our Scarf Platform service as of January 31, 2024.
When Scarf emerged back in 2019, many people expressed skepticism that usage analytics would ever be tolerated in the open source world. 5 years later, Scarf has shown this once solidified cultural norm can indeed change. Learn how Scarf's journey mirrors a broader shift in open source culture and why embracing usage analytics could shape the future of open software development.
Apache Superset is an open-source modern data exploration and visualization platform that makes it easy for users of all skill sets to explore and visualize their data. We spoke with Maxime Beauchemin, founder & CEO of Preset, and the original creator of both Apache Superset and Apache Airflow, who shared with us Superset's experience using Scarf.
Haskell, a cutting-edge programming language rooted in pure functionality, boasts static typing, type inference, and lazy evaluation. The language's ongoing evolution is bolstered by a diverse array of organizations, including the Haskell.org committee. This committee strategically leveraged the Scarf solution for testing purposes.
We’re pleased to share a final recap of the latest Scarf updates for December and 2023 as a whole. Join us in this last edition of our 2023 newsletters.
In the open source ecosystem, user behaviors are diverse and conversion tracking poses unique challenges frequently leaving traditional marketing strategies insufficient. Recognizing this gap, we are excited to introduce a brand new way for businesses to make sense of this opaque and noisy signal – Open Source Qualified Leads (OQLs).
In recent years, a notable development in the open source landscape is the growing number of large corporations considering the transition from open source licenses to more restrictive models like the Business Source License (BSL). This trend raises further questions about the sustainability and future of open source projects, particularly when large players alter their approach.
A recent release of Scarf added the ability to track and report on custom URL parameters. If you are looking to gain more intelligence around how you open source users interact with your project and download your software using link parameters in key situations can reveal interesting and helpful trends that can help you grow your user base and unlock open source qualified leads.
In the ever-evolving landscape of open source software, data collection has become a hot-button issue. As the open source community grows and software becomes increasingly integral to our daily lives, concerns about data collection ethics have emerged.
In today's fast-paced tech world, the Developer Relations (DevRel) role has moved from the periphery to the center stage. Companies, irrespective of their size, are now seriously considering the worth of having a dedicated DevRel team. But, how do you quantify the success or failure of such an effort? What metrics should companies use? This post dives deep into understanding the commercial Return on Investment (ROI) of DevRel.
Monetizing open source software is a challenging task, but it can also be highly rewarding. Unlike traditional software, you're essentially competing against a free version of your product. So, how do you sell something that is inherently free?
In the dynamic realm of community management, marketing, and developer relations, success depends upon more than just attracting attention. It's about fostering meaningful relationships, nurturing engagement, and amplifying your community's impact.
This guidebook shows you how to implement a call-home functionality or telemetry within your open-source software while at the same time being transparent and respectful of your users data. Let's explore how to build a minimal, privacy-focused call home functionality using a simple version check and Scarf.
Many open source contributors are reluctant or skeptical about metrics. They think metrics are overrated, irrelevant, or even harmful to their projects and communities. But in this blog post, we argue that metrics are essential for making better decisions, improving the experience for users and contributors, and demonstrating the impact and value of your open source work. We also share some tips and examples from OSPOs and DevRel teams on how to choose and use metrics effectively.
Many open-source developers rely on GitHub as their primary documentation source. But this can be a costly mistake that can affect your project’s success and adoption. In this blog, we’ll explain why you need to build your own docs site and how to do it easily and effectively.
Open source projects and companies need data to grow and enhance their performance. However, many open source leaders and communities overlook or reject metrics and depend on intuition, relationships, or imitation. Data can help you spot problems, opportunities, and false positives in growth strategies. In this blog post, Matt Yonkovit shows you why data is important for open source success and how it can offer insights and guidance for open source projects to reach their goals and make better decisions.
Open source software continues to be a vital part of enterprise operations in Q2 2023, as more and more companies adopt open source solutions for their business needs. In this blog post, we will examine the state of open source usage in Q2 2023 and the trends that are shaping the future of open source.
DevRel is a vital function for any organization that wants to engage with the developer community and grow its user base. However, there is no one-size-fits-all solution for where to place DevRel within the organizational structure. In this blog post, we explore three common strategies for DevRel placement: marketing, product, and hybrid. We discuss the advantages and challenges of each strategy, and provide some tips on how to decide which one is best for your organization and goals.
In the open source industry, identifying and engaging users is a major challenge. Many users download software from third-party platforms that do not share user data with the software company. Gating content behind a login or an email form can help, but it can also alienate potential users who value their privacy and convenience. In this blog post, we explore the pros and cons of gating content in the open source industry, and we offer an alternative solution that can help you identify and connect with your users without compromising your content.
Open source software depends on the power of its community. But how do you know if your community is healthy and thriving? In this blog, you will learn how to use metrics to track and evaluate your community’s activity, engagement, growth, diversity, quality, and impact. You will hear from founders, DevRel experts, and investors who share their best practices and tips on how to measure and improve your community’s performance and value.
Learn how to overcome the challenges of open source software marketing and turn anonymous data into qualified leads. In this blog post, we’ll show you how to use download data, web traffic, and documentation views to identify potential customers and grow your sales pipeline. Discover how to track downloads, website traffic and documentation views with Scarf Gateway and the Scarf Tracking Pixel.
This blog post outlines ten common mistakes made by founders of open source startups, from failing to ask the right questions to neglecting the standardization of key metrics. By offering guidance on how to avoid these pitfalls, it provides a roadmap to successfully commercializing open source projects.
Many people believe that making money from open source projects is an arduous or even impossible task. However, with the right strategies it is possible to build a sustainable business while keeping the spirit of open source intact. By evaluating the market fit and commercial viability of an open source project before considering funding and monetization, one can realistically begin to explore the financial potential of an open source project. Here's how to do it.
This blog emphasizes the importance of a comprehensive approach to lead generation in the open source software space. Amid the challenges of anonymous usage and privacy regulations, strategies focusing on download activity, community engagement, and web traffic can maximize lead identification. Employing lead scoring and maintaining a list of active software users can further enhance sales outcomes in this unique market.
Here at Scarf, we've developed a solution to help open source projects and businesses gain more insight into their users and their download traffic - Scarf Gateway. Here's how it works.
We are thrilled to announce our latest partnership with Clearbit (https://clearbit.com/). This collaboration will offer Scarf users and customers an enriched array of data about their user base, significantly enhancing the quality of information you already value from Scarf.
The popularity of open source software is not in doubt, but little concrete public data exists beyond human-generated surveys on adoption usage. In this blog post, we will explore the state of open source usage in Q1 2023 and the data illustrating how open source is becoming an increasingly important part of enterprise operations.
The success of DevRel (Developer Relations) and community efforts in open source can be challenging to measure, as there is often a disconnect between the goals and expectations of the community and the business. This blog post discusses the challenges of measuring the success of DevRel and community efforts in open source.
Successful open source projects don't always translate into successful open source businesses. However, by focusing on building a kick-ass product, raising awareness, making the product easier to use, and fostering a strong open source community, you can set the stage for converting users into paying customers.
You can use the open source Scarf Gateway to switch hosting providers, container registries, or repositories without impacting end users in the future.
What is driving all this tech layoffs? , What is their impact on the open source software industry? We will walk through all the potential reasons from an economic downturn, herd mentality, excessive borrowing and spending due to low interest rates, and growth at all costs as the main reasons behind the layoffs. Companies can continue to grow in this tight economic market if they are focused on optimizing efficiency and sustaining the right growth.
At the All Things Open conference, Emily Omier, a seasoned positioning consultant, sat down with Avi Press (Founder and CEO, Scarf) and Matt Yonkovit (The HOSS, Scarf) to discuss how to message, position, and validate your open source product on The Hacking Open Source Business Podcast. You can watch the full episode below or continue reading for a recap.
On the Hacking Open Source Business podcast, Joseph Jacks aka JJ (Founder, OSS Capital) joins Avi Press (Founder and CEO, Scarf) and Matt Yonkovit (The HOSS, Scarf) to share what you need to know before starting a commercial open source software (COSS) company and how you can set yourself and your project apart in a way that attracts investor funding. As an investor who exclusively focuses on open source startups, JJ provides a VC perspective on what he looks for when evaluating investment opportunities.
On The Hacking Open Source Business podcast, CEO Chris Molozian and Head of Developer Relations Gabriel Pene at Heroic Labs elaborate on their usage and shift to open source and how it accelerated their adoption.
In this recap of the first episode of the Hacking Open Source Business Podcast, co-hosts Matt Yonkovit and Avi Press, Scarf Founder and CEO, dig into a recent controversy that highlights the challenges open source projects face trying to create sustainable revenue streams to support a business or a non-profit that funds the project’s growth.
Scarf Sessions is a new stream where we have conversations with people shaping the landscape in open source and open source sustainability. This post will give a recap of the conversation Scarf CEO, Avi Press and I had with our guest Stefano Maffulli.
Community is important to the success of open source software. To understand and grow a community, project founders and maintainers need visibility into various technical, social, and even financial metrics. But what metrics should we be using?
Should Python eggs be deprecated in favor of wheels? What does the data show? This post explores how the right data can make decisions like this easier for maintainers and Open Source organizations.
Keeping your Salesforce accounts in sync with Scarf’s company data gives your team a clearer picture of how organizations are engaging with your open-source project.
Companies offering open source are pouring resources into the project, but it remains a black hole for go-to-market teams—high adoption, but no clear path to conversion. With Scarf, company-level usage data is available while maintaining privacy. The native integration with Salesforce and Hubspot, brings your open source users from passive usage to pipeline acceleration.
Open source projects generate a treasure trove of data (downloads, doc views, project usage), but most open source companies aren’t tapping into it. Here’s how Scarf helps us, and how it can help you do the same with your marketing.
Monetizing open source software is a challenging task, but it can also be highly rewarding. Unlike traditional software, you're essentially competing against a free version of your product. So, how do you sell something that is inherently free? This guide will delve into the complexities of selling open source software and provide actionable strategies tailored for sales and marketing teams. We'll explore the nuances of open source business models, uncover ways to turn anonymous users into qualified leads, and dissect growth strategies that work.
Before Talking About Sales/Marketing, A Word on Product
Unique Value Proposition
One of the most significant mistakes open source companies make is believing that users will naturally graduate from the free product to the paid version. It doesn't work that way. You must first identify what unique value you offer via your paid offerings. If you can't articulate why a user should pay for your software, you have a problem. Therefore, it's crucial to answer questions like:
Why would a free user upgrade to your paid version?
What unique features does your paid version offer that the free one doesn’t?
Who exactly is your target audience for the paid version?
Getting clarity on these will not only improve your product but also sharpen your sales and marketing strategies.
Understanding the Adoption Lifecycle and the Sales Motion
Identifying Customer Categories
You're going to encounter three types of potential customers:
Those already using your open-source product.
Those using a competitive product.
Those who you know little to nothing about, who you suspect may have an interest or a need your software can help with.
Understanding your target audience is crucial in determining your sales approach. It's essential to differentiate between three groups: existing users of your open-source product, users of competing products, and those unfamiliar with your offering.
The Low-Hanging Fruit: Current Users
Selling to existing users is often easier than acquiring new ones. These are your open source qualified leads (OQLs). An OQL is a user who has performed certain predictive activities, like downloading software packages over a sustained period, which indicates a potential for a commercial relationship. Focus on identifying as many OQLs as possible using techniques such as anonymous download tracking to populate your sales funnel.
Open Source Qualified Leads (OQLs)
The best pool to fish in for commercial outcomes are existing users of your open-source software. These are what we call Open Source Qualified Leads (OQLs). An OQL is a user or a company who has engaged with your open-source product to a level that suggests they might be ripe for upselling.
What Makes an OQL?
For example, an ideal OQL might download the software multiple times over several days, engage actively in community forums, and visit documentation pages. Consistent activity over a sustained period can indicate a high likelihood of conversion.
The Tough Nuts: Competing Users
Selling against a competing open-source technology requires a different playbook. This involves demonstrating a technically superior product. You need to arm yourself with a competitive analysis and be prepared to answer why your software is better. Here, DevRel activities and internal advocates can be your secret weapons.
Selling to Users of Competing Open Source Solutions
Winning over users from other solutions—open-source or not—requires a deep understanding of what your software does better and why it matters to your target customer. Developing a comprehensive battle card can help your sales team understand and articulate these advantages effectively. This is a much longer sales cycle than selling to existing users of your open source software. Consider this: A user using another open source software and paying an external vendor will have engineering expertise and resources already in place for that software. What is the cost to replace that? Additionally, if they are paying for support and an enterprise version, they will have a contract which could be for multiple years depending on the software and the organization's willingness to purchase multiyear deals for discounts. How likely is it that this company would switch tech stacks and give up the remainder of their support contract for a migration to your solution? In my experience, you may lead the seeds for a migration months or even years before a renewal window, but most enterprises would prefer to wait until current support contracts expire.
There are several catalysts which may improve the likelihood of a productive sales discussion and a company being more receptive to switching technologies:
Employee turnover. Open source developers, especially working in smaller or medium sized companies tend to be given a lot of leeway into choosing their tech stacks. When employees or management changes at one of these organizations often new people will bring in new ideas and preferences. Looking at LinkedIn for recent turnover and seeing where people came from can help enlighten potential willingness to move.
Organic traffic to your project or community. Even if someone is an entrenched user of a competitive open source solution, seeing ongoing or sustain traffic to docs or website pages can show increasing interest.
Content: A lot of engineers write blogs or give conference talks about the technology they work on. You can learn alot from these on their needs, their issues, and often their frustrations with current technology.
Public issues: If a company has a visible outage or issue with technology, you will often see them publicly publish a post mortem mentioning certain issues with technology they use. This can provide interesting insight into where their current technology maybe failing them.
Competing Against Cloud Providers
There has been a rising number of examples of companies moving away from open source licenses to source available licenses that specifically limit cloud providers or limit competition. This may make you take pause as you evaluate your offerings and licenses. Let me give some general advise and perspective. When you're selling open source software, your competitors aren't just other software companies; you're also up against cloud providers offering similar services. Why should a potential customer choose your offering over an established cloud service? The answer lies in your unique value proposition, not in your license.
One of the unique challenges open-source companies face is competing with cloud providers who offer managed versions of their own open-source software. These cloud giants have the advantage of scale, a vast user base, and deep pockets for marketing and customer acquisition. This can be particularly daunting for smaller open-source enterprises that can't compete on those levels. The cloud providers can essentially 'commoditize' your product, offering it as a part of their broader service suite, thereby making it difficult for you to monetize the very software you developed.
To effectively compete, open-source companies have to offer something that these cloud providers can't. This could be specialized expertise, superior customer service, or unique add-on features not available in the cloud provider's version. The aim is to move from providing just 'software' to delivering a full-fledged 'solution,' complete with services and support, that can tackle specific business problems better than a cloud provider's one-size-fits-all offering. In this way, you aren't just selling software; you're selling a comprehensive package that offers greater value, thus giving customers a compelling reason to choose you over a big cloud provider. This is often called the "open core" model, where the core product is open source, but specialized modules and services are proprietary and come at a cost.
Navigating the competitive landscape with cloud providers is not easy, but by understanding your unique value proposition and clearly articulating why and how you offer a better solution, you can not only survive but thrive. It's about shifting the conversation from price to value and establishing a strong brand identity that stands apart from the commoditized offerings of large cloud providers.
The Enigma: The Unknowns
These are the toughest to deal with, but also where your anonymous website demasking technology and other data analytics techniques come into play. The more you can move these unknown users to known OQLs, the better.
Strategies for Identification (Turning unknown to Known)
Discovering who these users are can be a challenge. This is where tactics like anonymous download tracking, website de-anonymizing technology, and gated content come into play. The objective is to move users from the 'unknown' category to the 'known' one, making them easier to target for sales and marketing efforts.
Dealing with the third category of users, the unknown ones, poses the greatest challenge and demands the implementation of anonymous website demasking technology and various data analytics strategies.
The Long Term Relationship Play
One of the unique characteristics of the open-source landscape is the significant influence individual developers wield in driving technology adoption within larger organizations. Unlike traditional sales models, where decisions are top-down and often made by C-suite executives, the open-source world frequently sees grassroots, bottom-up adoption. Developers, drawn to the technical merits and community support of an open-source project, will often integrate it into their workflows. Over time, this adoption can scale up to departmental and, eventually organizational levels. As the organization grows more dependent on the technology, there's a heightened likelihood that they will invest in a supported, often premium, version of the software to meet scalability, security, and compliance needs.
This bottom-up model of technology adoption makes building relationships crucial, and it's why Developer Relations (DevRel) has gained prominence in recent years. DevRel goes beyond mere marketing or sales, focusing on building a genuine, technical relationship with the developers who are the new decision-makers in the technology stack. By providing resources, support, and a feedback loop for these key influencers, companies can ensure not only that their technology is being adopted but that it is being advocated for within the organization. This peer-to-peer advocacy is often more persuasive than any marketing campaign could be, as it comes from a trusted source who understands the organization's specific challenges and needs. The focus is less on immediate sales conversion and more on long-term relationship building, which, in the open-source ecosystem, can be a game-changer in securing large, lucrative contracts with organizations.
Adding this relationship-driven focus to your open-source sales strategy can open doors that might otherwise remain closed. It humanizes your product and company, fosters a community of engaged users who can turn into advocates, and most importantly, it builds trust. In an arena where technical merit is table stakes, trust and relationships become the differentiating factors that turn users into paying customers.
The Role of Community in Open Source Sales
Community Engagement: A Double-Edged Sword
Open source projects inherently involve a community of users who contribute to and benefit from the software. While this is fantastic for user adoption and word-of-mouth promotion, it can also be a challenge for sales and marketing teams. The reason is simple: community members often demand why they should pay for something they've been using for free.
However, it's essential to view community engagement not as a challenge but as an opportunity. When users are engaged, they are not just users but also potential customers.
Measuring Community Health
Community health metrics are indicators of how engaged and active your community is. They are a subset of OQL metrics but focused on community channels like forums, social media, and other public venues. An active community can act as an unpaid sales force, advocating for your product and significantly impacting your sales.
Strategies for Enhancing Community Health
Regular Updates: Keep your community informed about what's happening, both in terms of software updates and company news.
Contributor Recognition: Recognize and reward users who make significant contributions.
Community Managers: Hire or designate community managers to moderate and stimulate discussions.
External Evangelists: The Powerhouses of Organic Growth
External evangelists can be invaluable assets. Unlike paid promotions, recommendations from external evangelists are seen as unbiased and genuine, thereby carrying more weight. Cultivating relationships with these influencers can dramatically improve your sales numbers without a corresponding increase in your marketing spend.
Privacy Concerns and Sales Strategies
With increasing scrutiny on data privacy and new regulations coming into force globally, open source companies must tread carefully when it comes to gathering user data.
Navigating the Privacy Maze
While privacy laws limit what you can do, they don't completely block your path. Strategies for navigating these challenges include:
Clear Communication: Always be clear about what data you're collecting and why.
User Consent: Where possible, gain user consent for data collection.
Data Minimization: Collect only what is absolutely necessary.
Lead Scoring: Turning Data into Gold
Lead scoring can help you identify promising leads from the sea of users. This involves assigning values to potential leads based on their activities and engagement level. While this method isn't foolproof, it significantly improves the efficiency of your sales pipeline.
Risk Mitigation Strategies
Churn Prediction
Using OQL and other behavioral data, you can predict which companies are at risk of churning. For instance, if a user has reached an OQL3 level and maintained it for an extended period but has recently shown reduced engagement, it's a red flag.
Addressing Potential Issues
The moment you identify a potential churn, the account management team should intervene. Whether it's an additional training session, a product walkthrough, or troubleshooting technical issues, proactive engagement can often prevent a churn.
Why Sales and Marketing Teams Should Care About OQLs
Open source is not a business strategy, nor is it a go-to-market strategy. It is a community and distribution strategy. You can integrate the community and the distribution into your go-to-market strategy for your commercial open source business, but that requires you to treat the “open source pipeline” like you treat the “sales pipeline”. This means that you should be tracking adoption and growth of the user base and which of these users end up becoming customers. You want a full view of the lifecycle and that means tracking something like an OQL. OQL’s are important for:
Enriching Sales Pipeline
OQLs are an enriched source of leads. They have a proven level of engagement and therefore a higher likelihood of converting into a paying customer.
Risk Assessment
Tracking a company’s OQL status over time can help in assessing potential risks, enabling the business to take proactive measures.
Resource Allocation
Knowing which leads are more likely to convert allows for better allocation of sales and marketing resources.
Track OQLs (Open Source Qualified Leads) by treating the "open source pipeline" like the "sales pipeline" in your commercial open source business strategy.
Conclusion: Putting It All Together
Open source sales require a multi-faceted approach that differs significantly from that of traditional software sales. By incorporating the strategies outlined in this guide, sales and marketing teams can better navigate the unique challenges posed by open source sales. The ultimate goal is to build a strong, active community around your product, identify and engage with Open Source Qualified Leads, and turn them into paying customers, all while maintaining a transparent and ethical stance on data and privacy. And remember, the community is not just a user base; it's a potential customer base.
By focusing on these strategies and continuously adapting to market and user behavior trends, you can build a sustainable, profitable business around your open source software. Happy selling!
I hope this guide serves as a valuable resource for sales and marketing teams navigating the intricacies of selling open-source software. If you have any questions or would like to discuss further, please don't hesitate to reach out. Thank you for reading!
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