Native Integration with Salesforce: Bring Open Source Usage Data Directly to Your CRM

Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

Analytics for open source
Try for Free

As the open source movement continues to gain momentum, a growing number of entrepreneurs are launching startups centered around commercializing open source projects. However, the journey from open source project to profitable startup is fraught with potential pitfalls. In fact, according to various sources including Forbes, Investopedia, and Harvard Business Review, it is estimated that around 90% of startups fail.

This guide aims to equip startup founders and open source companies with insights into ten common mistakes made during this process, and strategies to avoid them. From undervaluing the power of direct questions to losing sight of core metrics, these mistakes can undermine the potential of your startup. By avoiding these common missteps, you can pave the way for the success of your open source startup.

Launching a Startup: 10 Common Mistakes That Founders and Companies Make and How to Prevent Them

1. Building an Business without a Plan

Success in the world of open source projects is indeed a feat to be proud of. A thriving community and the sense of achievement derived from it can often give you the confidence to think about building a successful business around your project. But let's hit the brakes a bit. While it's a strong foundation, it's no guarantee of commercial success.  While growth and adoption are indeed vital, they're insufficient on their own for a sustainable business model. In the face of exciting opportunities, you need to be prepared to capitalize on them strategically.

Growth and adoption are fantastic, but without a solid plan to monetize your open source project, they might lead to missed opportunities.

The path to turning an open source project into a profit-making business isn't about waiting for your community to grow so large that monetization magically sorts itself out. Growth and adoption are fantastic, but without a solid plan to monetize your project, they might lead to missed opportunities. The real deal is to have a crystal-clear vision about how you'll earn revenue in the future. What offerings are you planning? Have you verified if there's a market for it?

Even in the early stages of a company, it's crucial to identify potential revenue streams. Investors initially put faith in your ability to figure this out. But as your funding needs increase, your business model becomes pivotal. Start preparing answers to key questions: Who are we targeting for our commercial offerings? How many of these potential customers exist? What are they willing to pay for? What will be our revenue models? What is our product-market fit? Remember, even tentative answers are better than no answers at all. And don't forget to involve your community in these discussions, their insights can be invaluable.

Also, don't fall into the trap of assuming that securing early investment equates to your open source project being easily commercializable. In recent years, investors have backed individuals they trust to navigate the challenges, but sometimes, despite best intentions, the product itself might not translate into a viable commercial offering. Always remember, investment is a vote of confidence in your potential, not a guarantee of your product's commercial viability.

2. Not Asking Users the Right Questions

Hate to break it to you, but if you're not asking questions, don't expect a winning outcome. A common oversight among many founders, particularly those in the open-source space, is neglecting to pose the difficult, pointed questions - especially when it comes to the commercial side of things. Asking someone to part with their cash for a feature or a service can be tough, particularly if your comfort zone is code rather than commerce. But as a founder, you've got to wear every hat in the business, no matter how unfamiliar or uncomfortable it feels.

Communication with customers: Five essential factors - Customer Experience  Magazine
Many founders, especially those in the open-source space, tend to overlook the importance of asking difficult and pointed questions, particularly when it comes to the commercial side of things.

Asking your user base (or potential users) probing questions is a responsibility you can't shirk. Sure, you can delegate or hire out, but verifying your assumptions about what people will shell out for is crucial. Let's say you're building a security-tight offering for highly regulated industries. You may find that public cloud offerings are a no-go for banks, financial institutions, medical companies, etc., who may require private cloud offerings with certain security bells and whistles. It's much better to uncover these quirks early. Similarly, figuring out if there are features you could reserve for a SaaS or open-core offering requires a genuine understanding of your user base. Will they open their wallets for it? You need to ask.

Founders, CEOs, and exec teams often fall into the trap of constructing their vision of what users want, which may not align with the market reality. In a surprising twist, many open-source founders might not even spring for their own product, opting to use the open-source version instead. This is often because they themselves are not the target customer. Remember, it's not about what you want; it's about what your users are willing to pay for.

3. Navigating Business without a Roadmap

Got dreams for your company? Awesome. But dreams without a roadmap are just fantasies. To move from wishful thinking to reality, you need to ask yourself some pointed questions. What's your vision of success? What are your 3-month, 6-month, 12-month targets? What are the key milestones on your company's journey? Remember, we're not just talking about project management here, but the actual shape of your company's future. Like any trip, you need to know your destination and the path to get there. Without clear alignment, especially in remote teams, your goals can start looking like a game of telephone, with everyone marching to a different beat.

Let's say you're aiming for 1M in ARR. Sounds exciting, right? But it's too broad. You need to dissect that goal, understand the specifics. Selling T-shirts and selling subscriptions both could fetch you 1M in ARR, but they are radically different paths. So, what are the mini milestones on your route to that 1M?

Why you need a business roadmap - HRKilns
Dreams for your open source company are great, but without a roadmap, they’re just fantasies. You need to know your destination and the path to get there.

For example, to reach 1M in ARR in 12 months, you might need:

  • 1K users to try out your software
  • 100 of those to sign up and start paying
  • To attract those users, you might need a library of example code, tutorials, and seamless integrations with existing tools
  • To convince them to sign up, you need to outdo competitor X by having features X, Y, Z in your product

The takeaway? Break up the mammoth task into smaller, digestible bites. Every startup should have a clear vision, a tentative roadmap to get there, and a team that's aware of it and is hustling towards the same goal. After all, Rome wasn't built in a day, but they were laying bricks every hour.

4. Believing Project Growth Will Automatically Mean Financial Success

Don't fall into the trap of thinking, "if you build it, they will come." Simply having an open source offering doesn't guarantee a flood of users who find it, use it, or deem it valuable. Heck, even successful projects wrestle with this challenge. So, don't bank on the idea that just because you've spent sleepless nights developing your masterpiece, users will automatically show up and start throwing money at it. The reality is a tad more complex - you've got to strategize, market, engage, and repeatedly prove your value to win customers.

5. Deviating From Your Core Mission

Just like Captain Ahab in Herman Melville's "Moby Dick," some startups get entangled in the pursuit of a solitary vision or customer, often deviating from their core mission. It's relatively easy to say 'yes' when opportunities or requests come your way, particularly when they come bearing a promise of immediate cash flow. Companies might dangle a hefty cheque in front of you to implement specific features or to rejig your roadmap according to their whims. While this might appear tempting, it's a two-edged sword.

This might lead you down a rabbit hole and distract you from your original goal. On the upside, it could help you understand your market better, or even realize that your initial alignment was off. However, it's more often than not a mere diversion. The vital question to ask yourself when developing features to secure a deal or two is - "How valuable will these features be to the community? Will our core audience use them? Would they be willing to pay for these features?"

If you find that these additions have limited appeal for your primary market, you're probably chasing a white whale. And just like Ahab, your obsession with this elusive 'big catch' can cost you your mission and business. So, choose your battles wisely, align your product with your vision, and focus on creating value for your primary audience.

6. Attempting To Do More Than You Are Capable Of

The mantra "go big or go home" holds allure for many startup founders. However, while it's a great rallying cry, it often leads to the pitfall of overextension, and in the worst-case scenario, running out of money and collapsing. As a small business with limited resources, having a grand vision is beneficial, but focusing on realizing a slice of that vision bit by bit is more cost-effective and sustainable. Too many companies start with a broad, ambitious vision, trying to push forward on multiple fronts at once, which can lead to slowed progress and a dilution of focus.

How open source maintainers keep contributors—and themselves—happy · GitHub
The “go big or go home” mantra is tempting for many startup founders, but it can lead to overextension and, in the worst-case scenario, running out of money and collapsing. This is especially true for open-source businesses.

Imagine your business as a plate at a buffet. The vision is the sumptuous spread of dishes laid out before you. The temptation to fill your plate with everything at once is strong, but it might lead to indigestion or, worse, food going to waste. The smarter approach is to start small, pick the dishes (read: tasks) that seem the most appetizing (read: impactful) and focus on savoring them first.

If you are lucky enough to have the resources and funding to move multiple features and initiatives simultaneously, that's great! But remember, it's often more beneficial to do a few high-impact things exceptionally well rather than juggling a multitude of tasks in parallel. Being selective with your 'menu' choices not only ensures steady progress but also allows you to concentrate your resources where they can make the most difference.

7. Prioritizing Contributors Over Users

Why Do People Contribute to Open-Source Projects? - Planet Crust
While open source project contributors may drive the vision and manage the organizational aspects of the project, it's the users who ultimately benefit from their work.

In the open-source world, it's easy to get star-struck by contributors. After all, they're the ones who bring an electrifying sense of energy, initiative, and validation to your project. They're the folks talking up your product at conferences, blogging about it, or even creating some buzz on social media - all of which are vital for continued growth. But here's the kicker: while contributors get the spotlight, it's the users who keep the lights on.

Contributors, as valuable as they are, represent a subset of the user base. They're the motivated, tech-savvy types who are eager to roll up their sleeves and dive into the nitty-gritty of open source work. But in many instances, they don't perfectly represent your target customer. These highly engaged contributors might lack the willingness or even see the need to pay for premium features or services because, well, they're happy to DIY their way around. Their perspectives and feedback are undoubtedly important, but they don't always align with the needs of the majority of your users, particularly those who might be willing to pay for enhanced features or a more streamlined experience.

This isn't to downplay the importance of contributors. They are, without a doubt, an integral part of any open-source project. But it's crucial to remember that not all users are contributors. As a business, it's vital to keep your finger on the pulse of the broader user community. Be mindful of their needs, feedback, and experience, because it's often these users, not just the contributors, who could turn into paying customers and thus drive the commercial success of your project.

8. Being afraid to ask for money

In the open source community, where the ethos is rooted in accessibility and freely available resources, many startups grapple with the challenge of monetization. Two prominent pitfalls are delaying the initiation of charging for a product and underpricing their offerings. The hesitation to ask for money in a culture that extols the virtue of 'free' is a hurdle many open source companies need to overcome. Further, the anchor effect of '$0' in open source could lead companies to undervalue their product, setting a price point that's too low. It's crucial to remember that while the software's source code may be free, the innovation, support, security, and convenience a company provides through its commercial offering holds considerable value. Charging for your product not only contributes to your sustainability but also signals to customers that your product has worth. Balancing the spirit of open source with the necessities of a business requires thoughtful pricing strategies, and overcoming the fear to charge for the value provided.

9. Breaking the Company Culture by Hiring the Wrong People

The temptation in many startups, particularly those in the open-source community, is to bring in a "world-class" executive team as soon as funding hits the bank. Founders, often first-time executives, scramble to hire seasoned pros from larger companies to fill roles in areas they're less familiar with, like operations, marketing, sales, or product development.

Become an Open Source contributor - DEV Community
Hiring experienced professionals from larger companies often triggers a series of problems as they may not mesh well with the company's culture or its current growth stage.

But this approach often triggers a series of problems. It's not that these new hires are incompetent; on the contrary, they usually come with sparkling resumes and proven track records. The issue, however, is that they may not mesh well with the company's culture or its current growth stage. The dynamics of running a 20-person company differ vastly from those of a 100, 200, or a 5,000-plus-person enterprise.

These experienced executives, with their polished methods and reliance on structured programs, often bring approaches designed for much larger companies. It's like recruiting an executive from Oracle to run a 10-person database startup: they're used to hefty budgets, established procedures, and resources that a small startup might not have. By hiring such an individual, you risk a significant shift in the company's culture.

Remember, bringing an executive on board is not just adding one person to the team. Their preferred working style and culture influence hiring decisions and shape the wider team culture. This could potentially trigger drastic cultural shifts in your company. Therefore, it's crucial to be cautious and protect your company culture when hiring executives. Look for leaders who have experienced your current growth phase and the unique challenges of companies your size.

However, this doesn't only apply to people coming from larger corporations. Employees used to leading small teams may struggle to scale their management skills to larger teams. Each size demands a different skill set.

Lastly, be aware that this trend can lead to early bloat in your company, often resulting in layoffs when ROI isn't realized. For instance, a new marketing head from a bigger company might increase spending on events to generate leads. They're used to seeing the power of marketing at a large scale, but the results might not match the increased costs in a smaller company. A startup might not have the resources to sustain this kind of spending unless the ROI is swift and significant.

10. Ignoring the Growing Pains - Necessary Changes and Alignments as the Company Expands

As a company expands, certain processes and strategies that once worked seamlessly start to crumble. Systems that functioned smoothly with a 10-person team can fracture at 20, break completely at 50, and then shatter all over again at 100. Recognizing and preparing for these growing pains is crucial to successfully navigating each growth plateau.

With every growth phase, there's a risk of losing efficiency and spinning wheels due to outdated processes. It's important to constantly reassess your operations and strategy, anticipating potential chokepoints as your team grows. By identifying potential issues in advance, you can adjust your strategy and avoid operational breakdowns that slow progress and frustrate your team.

Maintaining open communication lines is key during these growth periods, but equally important is clarifying roles and responsibilities. As the company expands, tasks may overlap or fall through the cracks without clear delineation of duties. By ensuring that everyone understands their specific areas of focus and responsibility, you can maintain productivity and morale even during periods of rapid growth.

Conclusion:

In conclusion, while the journey from an open source project to a successful startup is a challenging one, it's far from impossible. By avoiding these common pitfalls, you can increase your chances of commercializing your open source project successfully. Each step of the way, remember to engage your users, align your team with your vision, hire the right people who fit your culture, and keep track of your core metrics. Your open source project has the potential to grow into a thriving business, and with careful attention to these critical areas, you can navigate the path to success.

This is the end of this article about 10 errors that many founders commit and how to prevent them. I hope you enjoyed it and found it helpful. But before you go, I have a question for you: have you ever been part of a company that suffered from one of these mistakes and failed? Which one was it and what happened? Follow us on LinkedIn and let us know.

This is some text inside of a div block.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

General
Analytics for open source
Try for Free
Try for Free

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

Published

June 16, 2023

This article was originally posted on

Hackernoon

As the open source movement continues to gain momentum, a growing number of entrepreneurs are launching startups centered around commercializing open source projects. However, the journey from open source project to profitable startup is fraught with potential pitfalls. In fact, according to various sources including Forbes, Investopedia, and Harvard Business Review, it is estimated that around 90% of startups fail.

This guide aims to equip startup founders and open source companies with insights into ten common mistakes made during this process, and strategies to avoid them. From undervaluing the power of direct questions to losing sight of core metrics, these mistakes can undermine the potential of your startup. By avoiding these common missteps, you can pave the way for the success of your open source startup.

Launching a Startup: 10 Common Mistakes That Founders and Companies Make and How to Prevent Them

1. Building an Business without a Plan

Success in the world of open source projects is indeed a feat to be proud of. A thriving community and the sense of achievement derived from it can often give you the confidence to think about building a successful business around your project. But let's hit the brakes a bit. While it's a strong foundation, it's no guarantee of commercial success.  While growth and adoption are indeed vital, they're insufficient on their own for a sustainable business model. In the face of exciting opportunities, you need to be prepared to capitalize on them strategically.

Growth and adoption are fantastic, but without a solid plan to monetize your open source project, they might lead to missed opportunities.

The path to turning an open source project into a profit-making business isn't about waiting for your community to grow so large that monetization magically sorts itself out. Growth and adoption are fantastic, but without a solid plan to monetize your project, they might lead to missed opportunities. The real deal is to have a crystal-clear vision about how you'll earn revenue in the future. What offerings are you planning? Have you verified if there's a market for it?

Even in the early stages of a company, it's crucial to identify potential revenue streams. Investors initially put faith in your ability to figure this out. But as your funding needs increase, your business model becomes pivotal. Start preparing answers to key questions: Who are we targeting for our commercial offerings? How many of these potential customers exist? What are they willing to pay for? What will be our revenue models? What is our product-market fit? Remember, even tentative answers are better than no answers at all. And don't forget to involve your community in these discussions, their insights can be invaluable.

Also, don't fall into the trap of assuming that securing early investment equates to your open source project being easily commercializable. In recent years, investors have backed individuals they trust to navigate the challenges, but sometimes, despite best intentions, the product itself might not translate into a viable commercial offering. Always remember, investment is a vote of confidence in your potential, not a guarantee of your product's commercial viability.

2. Not Asking Users the Right Questions

Hate to break it to you, but if you're not asking questions, don't expect a winning outcome. A common oversight among many founders, particularly those in the open-source space, is neglecting to pose the difficult, pointed questions - especially when it comes to the commercial side of things. Asking someone to part with their cash for a feature or a service can be tough, particularly if your comfort zone is code rather than commerce. But as a founder, you've got to wear every hat in the business, no matter how unfamiliar or uncomfortable it feels.

Communication with customers: Five essential factors - Customer Experience  Magazine
Many founders, especially those in the open-source space, tend to overlook the importance of asking difficult and pointed questions, particularly when it comes to the commercial side of things.

Asking your user base (or potential users) probing questions is a responsibility you can't shirk. Sure, you can delegate or hire out, but verifying your assumptions about what people will shell out for is crucial. Let's say you're building a security-tight offering for highly regulated industries. You may find that public cloud offerings are a no-go for banks, financial institutions, medical companies, etc., who may require private cloud offerings with certain security bells and whistles. It's much better to uncover these quirks early. Similarly, figuring out if there are features you could reserve for a SaaS or open-core offering requires a genuine understanding of your user base. Will they open their wallets for it? You need to ask.

Founders, CEOs, and exec teams often fall into the trap of constructing their vision of what users want, which may not align with the market reality. In a surprising twist, many open-source founders might not even spring for their own product, opting to use the open-source version instead. This is often because they themselves are not the target customer. Remember, it's not about what you want; it's about what your users are willing to pay for.

3. Navigating Business without a Roadmap

Got dreams for your company? Awesome. But dreams without a roadmap are just fantasies. To move from wishful thinking to reality, you need to ask yourself some pointed questions. What's your vision of success? What are your 3-month, 6-month, 12-month targets? What are the key milestones on your company's journey? Remember, we're not just talking about project management here, but the actual shape of your company's future. Like any trip, you need to know your destination and the path to get there. Without clear alignment, especially in remote teams, your goals can start looking like a game of telephone, with everyone marching to a different beat.

Let's say you're aiming for 1M in ARR. Sounds exciting, right? But it's too broad. You need to dissect that goal, understand the specifics. Selling T-shirts and selling subscriptions both could fetch you 1M in ARR, but they are radically different paths. So, what are the mini milestones on your route to that 1M?

Why you need a business roadmap - HRKilns
Dreams for your open source company are great, but without a roadmap, they’re just fantasies. You need to know your destination and the path to get there.

For example, to reach 1M in ARR in 12 months, you might need:

  • 1K users to try out your software
  • 100 of those to sign up and start paying
  • To attract those users, you might need a library of example code, tutorials, and seamless integrations with existing tools
  • To convince them to sign up, you need to outdo competitor X by having features X, Y, Z in your product

The takeaway? Break up the mammoth task into smaller, digestible bites. Every startup should have a clear vision, a tentative roadmap to get there, and a team that's aware of it and is hustling towards the same goal. After all, Rome wasn't built in a day, but they were laying bricks every hour.

4. Believing Project Growth Will Automatically Mean Financial Success

Don't fall into the trap of thinking, "if you build it, they will come." Simply having an open source offering doesn't guarantee a flood of users who find it, use it, or deem it valuable. Heck, even successful projects wrestle with this challenge. So, don't bank on the idea that just because you've spent sleepless nights developing your masterpiece, users will automatically show up and start throwing money at it. The reality is a tad more complex - you've got to strategize, market, engage, and repeatedly prove your value to win customers.

5. Deviating From Your Core Mission

Just like Captain Ahab in Herman Melville's "Moby Dick," some startups get entangled in the pursuit of a solitary vision or customer, often deviating from their core mission. It's relatively easy to say 'yes' when opportunities or requests come your way, particularly when they come bearing a promise of immediate cash flow. Companies might dangle a hefty cheque in front of you to implement specific features or to rejig your roadmap according to their whims. While this might appear tempting, it's a two-edged sword.

This might lead you down a rabbit hole and distract you from your original goal. On the upside, it could help you understand your market better, or even realize that your initial alignment was off. However, it's more often than not a mere diversion. The vital question to ask yourself when developing features to secure a deal or two is - "How valuable will these features be to the community? Will our core audience use them? Would they be willing to pay for these features?"

If you find that these additions have limited appeal for your primary market, you're probably chasing a white whale. And just like Ahab, your obsession with this elusive 'big catch' can cost you your mission and business. So, choose your battles wisely, align your product with your vision, and focus on creating value for your primary audience.

6. Attempting To Do More Than You Are Capable Of

The mantra "go big or go home" holds allure for many startup founders. However, while it's a great rallying cry, it often leads to the pitfall of overextension, and in the worst-case scenario, running out of money and collapsing. As a small business with limited resources, having a grand vision is beneficial, but focusing on realizing a slice of that vision bit by bit is more cost-effective and sustainable. Too many companies start with a broad, ambitious vision, trying to push forward on multiple fronts at once, which can lead to slowed progress and a dilution of focus.

How open source maintainers keep contributors—and themselves—happy · GitHub
The “go big or go home” mantra is tempting for many startup founders, but it can lead to overextension and, in the worst-case scenario, running out of money and collapsing. This is especially true for open-source businesses.

Imagine your business as a plate at a buffet. The vision is the sumptuous spread of dishes laid out before you. The temptation to fill your plate with everything at once is strong, but it might lead to indigestion or, worse, food going to waste. The smarter approach is to start small, pick the dishes (read: tasks) that seem the most appetizing (read: impactful) and focus on savoring them first.

If you are lucky enough to have the resources and funding to move multiple features and initiatives simultaneously, that's great! But remember, it's often more beneficial to do a few high-impact things exceptionally well rather than juggling a multitude of tasks in parallel. Being selective with your 'menu' choices not only ensures steady progress but also allows you to concentrate your resources where they can make the most difference.

7. Prioritizing Contributors Over Users

Why Do People Contribute to Open-Source Projects? - Planet Crust
While open source project contributors may drive the vision and manage the organizational aspects of the project, it's the users who ultimately benefit from their work.

In the open-source world, it's easy to get star-struck by contributors. After all, they're the ones who bring an electrifying sense of energy, initiative, and validation to your project. They're the folks talking up your product at conferences, blogging about it, or even creating some buzz on social media - all of which are vital for continued growth. But here's the kicker: while contributors get the spotlight, it's the users who keep the lights on.

Contributors, as valuable as they are, represent a subset of the user base. They're the motivated, tech-savvy types who are eager to roll up their sleeves and dive into the nitty-gritty of open source work. But in many instances, they don't perfectly represent your target customer. These highly engaged contributors might lack the willingness or even see the need to pay for premium features or services because, well, they're happy to DIY their way around. Their perspectives and feedback are undoubtedly important, but they don't always align with the needs of the majority of your users, particularly those who might be willing to pay for enhanced features or a more streamlined experience.

This isn't to downplay the importance of contributors. They are, without a doubt, an integral part of any open-source project. But it's crucial to remember that not all users are contributors. As a business, it's vital to keep your finger on the pulse of the broader user community. Be mindful of their needs, feedback, and experience, because it's often these users, not just the contributors, who could turn into paying customers and thus drive the commercial success of your project.

8. Being afraid to ask for money

In the open source community, where the ethos is rooted in accessibility and freely available resources, many startups grapple with the challenge of monetization. Two prominent pitfalls are delaying the initiation of charging for a product and underpricing their offerings. The hesitation to ask for money in a culture that extols the virtue of 'free' is a hurdle many open source companies need to overcome. Further, the anchor effect of '$0' in open source could lead companies to undervalue their product, setting a price point that's too low. It's crucial to remember that while the software's source code may be free, the innovation, support, security, and convenience a company provides through its commercial offering holds considerable value. Charging for your product not only contributes to your sustainability but also signals to customers that your product has worth. Balancing the spirit of open source with the necessities of a business requires thoughtful pricing strategies, and overcoming the fear to charge for the value provided.

9. Breaking the Company Culture by Hiring the Wrong People

The temptation in many startups, particularly those in the open-source community, is to bring in a "world-class" executive team as soon as funding hits the bank. Founders, often first-time executives, scramble to hire seasoned pros from larger companies to fill roles in areas they're less familiar with, like operations, marketing, sales, or product development.

Become an Open Source contributor - DEV Community
Hiring experienced professionals from larger companies often triggers a series of problems as they may not mesh well with the company's culture or its current growth stage.

But this approach often triggers a series of problems. It's not that these new hires are incompetent; on the contrary, they usually come with sparkling resumes and proven track records. The issue, however, is that they may not mesh well with the company's culture or its current growth stage. The dynamics of running a 20-person company differ vastly from those of a 100, 200, or a 5,000-plus-person enterprise.

These experienced executives, with their polished methods and reliance on structured programs, often bring approaches designed for much larger companies. It's like recruiting an executive from Oracle to run a 10-person database startup: they're used to hefty budgets, established procedures, and resources that a small startup might not have. By hiring such an individual, you risk a significant shift in the company's culture.

Remember, bringing an executive on board is not just adding one person to the team. Their preferred working style and culture influence hiring decisions and shape the wider team culture. This could potentially trigger drastic cultural shifts in your company. Therefore, it's crucial to be cautious and protect your company culture when hiring executives. Look for leaders who have experienced your current growth phase and the unique challenges of companies your size.

However, this doesn't only apply to people coming from larger corporations. Employees used to leading small teams may struggle to scale their management skills to larger teams. Each size demands a different skill set.

Lastly, be aware that this trend can lead to early bloat in your company, often resulting in layoffs when ROI isn't realized. For instance, a new marketing head from a bigger company might increase spending on events to generate leads. They're used to seeing the power of marketing at a large scale, but the results might not match the increased costs in a smaller company. A startup might not have the resources to sustain this kind of spending unless the ROI is swift and significant.

10. Ignoring the Growing Pains - Necessary Changes and Alignments as the Company Expands

As a company expands, certain processes and strategies that once worked seamlessly start to crumble. Systems that functioned smoothly with a 10-person team can fracture at 20, break completely at 50, and then shatter all over again at 100. Recognizing and preparing for these growing pains is crucial to successfully navigating each growth plateau.

With every growth phase, there's a risk of losing efficiency and spinning wheels due to outdated processes. It's important to constantly reassess your operations and strategy, anticipating potential chokepoints as your team grows. By identifying potential issues in advance, you can adjust your strategy and avoid operational breakdowns that slow progress and frustrate your team.

Maintaining open communication lines is key during these growth periods, but equally important is clarifying roles and responsibilities. As the company expands, tasks may overlap or fall through the cracks without clear delineation of duties. By ensuring that everyone understands their specific areas of focus and responsibility, you can maintain productivity and morale even during periods of rapid growth.

Conclusion:

In conclusion, while the journey from an open source project to a successful startup is a challenging one, it's far from impossible. By avoiding these common pitfalls, you can increase your chances of commercializing your open source project successfully. Each step of the way, remember to engage your users, align your team with your vision, hire the right people who fit your culture, and keep track of your core metrics. Your open source project has the potential to grow into a thriving business, and with careful attention to these critical areas, you can navigate the path to success.

This is the end of this article about 10 errors that many founders commit and how to prevent them. I hope you enjoyed it and found it helpful. But before you go, I have a question for you: have you ever been part of a company that suffered from one of these mistakes and failed? Which one was it and what happened? Follow us on LinkedIn and let us know.

Latest blog posts

Tools and strategies modern teams need to help their companies grow.

Join Us at the Scarf Summit on December 10th

Join Us at the Scarf Summit on December 10th

The Scarf Summit is back, and we’re inviting you to join us for an event that’s all about turning open source usage data into actionable insights.
The Open Source Business Metrics Guide 2024

The Open Source Business Metrics Guide 2024

Today, the most commonly accepted metrics for open source adoption and growth are heavily focused on the contributors and community (the idea is healthy contributions should equate to healthy adoption). While these are useful metrics, they are only part of the picture. This guide is built for those at open-source-based companies who are responsible for growth and adoption. 
Bringing Open Source Usage Data Directly to Your CRM: Scarf's New Salesforce Integration

Bringing Open Source Usage Data Directly to Your CRM: Scarf's New Salesforce Integration

We’ve got some exciting news: Scarf just launched a powerful, native integration with Salesforce, bringing Scarf’s rich open source usage data directly into your CRM. No more bouncing between tools or setting up S3 data exports—you can now get all the insights you need where you already do your work.
ARMO leverages Scarf to find high intent signals: Download + Pricing page = INTENT

ARMO leverages Scarf to find high intent signals: Download + Pricing page = INTENT

Scarf, a platform designed to provide open-source projects with deeper insights into their users and usage patterns, was the answer ARMO needed. By integrating Scarf into Kubescape, ARMO was able to regain visibility into which company has been using Kubescape, filling the gap left after their CNCF contribution.
Introducing Match Feedback: Take Control of Your Data

Introducing Match Feedback: Take Control of Your Data

The foundation of Scarf company tracking is IP Address attribution. Our Company Tracking algorithm considers confidence and reputation scores from multiple sources to provide what we believe to be the best matching data in the industry. In a nutshell, Match Feedback allows you to fix and fine-tune your company matches.
Scarf Completes SOC 2 Type 2 Examination: What It Means for Our Community

Scarf Completes SOC 2 Type 2 Examination: What It Means for Our Community

We're thrilled to announce that Scarf has successfully completed the SOC 2 Type 2 examination! This might sound like legal jargon at first glance, but let’s break down what this means for us, our users, and the open-source community as a whole.
Integrating Scarf Data with Your Analytics Tools

Integrating Scarf Data with Your Analytics Tools

Exporting data tracked by Scarf is essential for analytics, reporting, and integration with other tools. Scarf adds open-source usage metrics to the data you already collect, giving you a fuller picture of how your project is used. This helps you monitor trends, measure impact, and make better data-driven decisions.
3 Methods to Collect Data with Scarf

3 Methods to Collect Data with Scarf

Scarf helps you unlock the full potential of your open source project by collecting valuable usage data in three key ways: Scarf Packages, in-app telemetry, and tracking pixels. In this post, we’ll break down each of these powerful tools and show you how to use them to optimize your open source strategy.
Scarf Newsletter - August 2024

Scarf Newsletter - August 2024

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. August 2024 Newsletter.
How Apache Superset Implemented Scarf

How Apache Superset Implemented Scarf

In this playbook, you’ll learn how to integrate Scarf into an Apache Software Foundation project. It details how the Preset team implemented Scarf in their Apache Superset project, as shared during our first-ever Scarf Summit on July 16th, 2024.
Implement a Call-Home Functionality or Telemetry in your Open Source Project

Implement a Call-Home Functionality or Telemetry in your Open Source Project

Implementing telemetry in your open source project helps you determine whether people are testing your software and continuing its use over time. Such insights not only confirm if the developed software meets users' needs but also helps identify which versions are being adopted and which might be vulnerable to the latest bugs or other issues.
Prisma: Validating Enterprise Adoption Through Open Source Engagement

Prisma: Validating Enterprise Adoption Through Open Source Engagement

Prisma turned to Scarf for a monthly Strategic Insights Report. By integrating Scarf into various parts of their web and software delivery infrastructure, Prisma now knows relevant details about their users in terms of company size, industry, location and much more.
Measure and Optimize Open Source User Interactions Using Scarf

Measure and Optimize Open Source User Interactions Using Scarf

This playbook will walk you through setting up Scarf to get a clearer picture of how people are interacting with your open-source project. You’ll learn how to create and use Scarf Pixels, track open source project documentation views, measure engagement across social media, and more.
CopilotKit Case Study: Leveraging Scarf to Uncover Hidden Open-Source Opportunities

CopilotKit Case Study: Leveraging Scarf to Uncover Hidden Open-Source Opportunities

CopilotKit implemented Scarf to gain visibility into their open-source community. By adding Scarf to their documentation, they could see which companies were actively engaging with their resources, providing valuable insights into potential leads and customer segments.
Measure Your Open Source Project's Downloads Using Scarf

Measure Your Open Source Project's Downloads Using Scarf

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.
What's New at Scarf: Key Takeaways from the Scarf Summit

What's New at Scarf: Key Takeaways from the Scarf Summit

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.
Building Scarf: Avi Press on Haskell, Telemetry, and Open Source Challenges

Building Scarf: Avi Press on Haskell, Telemetry, and Open Source Challenges

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.
Boost Your Outreach with Scarf Filtering

Boost Your Outreach with Scarf Filtering

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. 
Below the Surface: Why Open Source Needs Analytics

Below the Surface: Why Open Source Needs Analytics

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.
How Garden Leverages Scarf to Understand and Grow Their User Base

How Garden Leverages Scarf to Understand and Grow Their User Base

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.
OSS Privacy & OSS Analytics, How Heroic Labs Struck a Balance

OSS Privacy & OSS Analytics, How Heroic Labs Struck a Balance

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.
Unlimited Free Seats and Data Retention for All Linux Foundation Projects

Unlimited Free Seats and Data Retention for All Linux Foundation Projects

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.ai and Flyte: Privacy, Open Source, and Building a Commercial Business

Union.ai and Flyte: Privacy, Open Source, and Building a Commercial Business

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.
Navigating the Complexities of Open Source Commercialization: Insights from Adam Jacob

Navigating the Complexities of Open Source Commercialization: Insights from Adam Jacob

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.
Scarf Newsletter - May 2024

Scarf Newsletter - May 2024

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. May 2024 Newsletter.
Smallstep Labs: Leveraging Open Source Data for Enterprise Growth

Smallstep Labs: Leveraging Open Source Data for Enterprise Growth

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 and Dapr: How to Balance Open Source and Business Through Data

Diagrid and Dapr: How to Balance Open Source and Business Through Data

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.
12 Reasons Why Haskell is a Terrible Choice for Startups (and why we picked it anyway)

12 Reasons Why Haskell is a Terrible Choice for Startups (and why we picked it anyway)

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: Understanding an Open Source Project’s Impact on Commercial Success

Unstructured: Understanding an Open Source Project’s Impact on Commercial Success

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. 
New Integration: Scarf + Common Room = Supercharged Insights for Open Source Projects

New Integration: Scarf + Common Room = Supercharged Insights for Open Source Projects

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.
Scarf Newsletter - March 2024

Scarf Newsletter - March 2024

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. March 2024 Newsletter.
State of Open Source Usage: The Scarf Report 2023

State of Open Source Usage: The Scarf Report 2023

In 2023, the open source software (OSS) landscape showed significant growth and shifts in various aspects. Here are the key findings:
Scarf Successfully Completes Type 1 SOC 2 Examination with an Unqualified Opinion

Scarf Successfully Completes Type 1 SOC 2 Examination with an Unqualified Opinion

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.
Analytics are Starting to Win in Open Source

Analytics are Starting to Win in Open Source

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.
Scarf Newsletter - February 2024

Scarf Newsletter - February 2024

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. February 2024 Newsletter.
Scarf Case Study: Apache Superset

Scarf Case Study: Apache Superset

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.org: Bridging the Gap Between Language Innovation and Community Understanding

Haskell.org: Bridging the Gap Between Language Innovation and Community Understanding

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.
Scarf Newsletter - December 2023

Scarf Newsletter - December 2023

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.
Introducing OQLs: A New Way for Businesses to Quantify Open Source Adoption

Introducing OQLs: A New Way for Businesses to Quantify Open Source Adoption

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).
Scarf Newsletter - November 2023

Scarf Newsletter - November 2023

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. November 2023 Newsletter.
The BSL Phenomenon: Balancing Sustainability and Open Source Principles

The BSL Phenomenon: Balancing Sustainability and Open Source Principles

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.
State of Open Source Usage Q3 2023: The Scarf Report

State of Open Source Usage Q3 2023: The Scarf Report

In Q3 2023, the open source software (OSS) landscape showed significant growth and shifts in various aspects. Here are the key findings:
Unlocking the Power of Custom URL Parameters with Scarf: A Comprehensive Guide

Unlocking the Power of Custom URL Parameters with Scarf: A Comprehensive Guide

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.
Building Trust: How to Collect Data Responsibly as an Open Source Project

Building Trust: How to Collect Data Responsibly as an Open Source Project

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.
Scarf Newsletter - September 2023

Scarf Newsletter - September 2023

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. September 2023 Newsletter.
 Measuring the Commercial ROI of DEVREL

Measuring the Commercial ROI of DEVREL

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.
Selling Open Source: 101 - Guide for Sales and Marketing Teams

Selling Open Source: 101 - Guide for Sales and Marketing Teams

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?
Beyond the Surface: How to Engage with the Quiet Members of your Open Source Community

Beyond the Surface: How to Engage with the Quiet Members of your Open Source Community

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. 
Mastering Telemetry in Open Source: A Simple Guide to Building Lightweight Call Home Functionality

Mastering Telemetry in Open Source: A Simple Guide to Building Lightweight Call Home Functionality

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.
Scarf Newsletter - July 2023

Scarf Newsletter - July 2023

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. July 2023 Newsletter.
Open Source Metrics: Fear and Loathing (Part 2)

Open Source Metrics: Fear and Loathing (Part 2)

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.
Why GitHub Repos Are Not Enough for Your Docs: The Benefits of Creating a Dedicated Doc Site

Why GitHub Repos Are Not Enough for Your Docs: The Benefits of Creating a Dedicated Doc Site

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.
Data-Driven Open Source: Why You Should Care About Metrics (Part 1)

Data-Driven Open Source: Why You Should Care About Metrics (Part 1)

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.
State of Open Source Usage Q2 2023: The Scarf Report

State of Open Source Usage Q2 2023: The Scarf Report

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.
Developer Relations (DevRel): Where Should It Reside in Your Organization

Developer Relations (DevRel): Where Should It Reside in Your Organization

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.
The Gating Debate: Striking a Balance Between Open Source and Marketing Insights

The Gating Debate: Striking a Balance Between Open Source and Marketing Insights

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.
How to Use Metrics to Track and Evaluate Your Open Source Community’s Success

How to Use Metrics to Track and Evaluate Your Open Source Community’s Success

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.
How to: Using anonymous downloads, website traffic, and documentation views to generate leads

How to: Using anonymous downloads, website traffic, and documentation views to generate leads

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.
Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

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.
Open Source Monetization 101: A Step-by-Step Guide

Open Source Monetization 101: A Step-by-Step Guide

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.
The Open Source Sales & Marketing Funnel: Navigating the Challenges of Anonymous Downloads and Activity Tracking

The Open Source Sales & Marketing Funnel: Navigating the Challenges of Anonymous Downloads and Activity Tracking

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.
Scarf Newsletter - May 2023

Scarf Newsletter - May 2023

Stay up to date with the latest updates from Scarf. Discover upcoming features, industry news, partnerships, and events. May 2023 Newsletter.
Harnessing Software Download Patterns: Using Open Source Download Metrics to Uncover New Users and Potential Customers

Harnessing Software Download Patterns: Using Open Source Download Metrics to Uncover New Users and Potential Customers

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.
Unlocking Growth Potential: Scarf Users Benefit from Clearbit Integration for Improved User Intelligence

Unlocking Growth Potential: Scarf Users Benefit from Clearbit Integration for Improved User Intelligence

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.
State of Open Source Usage Q1 2023: The Scarf Report

State of Open Source Usage Q1 2023: The Scarf Report

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.
Connecting Community Efforts in Open Source to Business Success

Connecting Community Efforts in Open Source to Business Success

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.
3 Keys to Growing the Adoption of an Open Source Project

3 Keys to Growing the Adoption of an Open Source Project

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.
The Most Neglected and Overlooked Open Source Metric: Production Users

The Most Neglected and Overlooked Open Source Metric: Production Users

Everyone wants a larger open source user base, but very few people effectively measure its growth. Let’s discuss why.
Switching Container Registries With Zero Downtime

Switching Container Registries With Zero Downtime

You can use the open source Scarf Gateway to switch hosting providers, container registries, or repositories without impacting end users in the future.
Understanding Tech Layoffs and the Economy’s Impact on Open Source

Understanding Tech Layoffs and the Economy’s Impact on Open Source

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.
Why Downloads are an Essential Metric for Open Source Software Projects

Why Downloads are an Essential Metric for Open Source Software Projects

If you're only going to track one thing for your OSS project, track your downloads.
The Open Source Business Metrics Guide

The Open Source Business Metrics Guide

How to Build, Grow, and Measure the Success of an Open Source Business
Messaging and Positioning Considerations for Introducing an Open Source Product

Messaging and Positioning Considerations for Introducing an Open Source Product

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.
How to Get the Attention of an Open Source Software Investor

How to Get the Attention of an Open Source Software Investor

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.
Heroic Labs' Journey to Open Source and 5.3M Docker Downloads

Heroic Labs' Journey to Open Source and 5.3M Docker Downloads

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.
How to Keep Open Source Projects Open Source

How to Keep Open Source Projects Open Source

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.
How Buoyant Drives Open-Source-Led Growth with Linkerd

How Buoyant Drives Open-Source-Led Growth with Linkerd

Building a business around an open-source project is hard. Learn more about how Buoyant drives product-led growth with Linkerd.
Alex Biehl: Open Sourcing a Tool to Generate Haskell Server Stubs

Alex Biehl: Open Sourcing a Tool to Generate Haskell Server Stubs

Alex is a software engineer at Scarf who recently open sourced a tool to generate Haskell server stubs called Tie.
Tanner Linsley: Building Sustainable Open Source Projects

Tanner Linsley: Building Sustainable Open Source Projects

Tanner Linsley joined us to explain how he got started in open source and how he has made working in open source sustainable.
Stefano Maffulli: An Exploration on Standards for Open Source Packaging and Distribution

Stefano Maffulli: An Exploration on Standards for Open Source Packaging and Distribution

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.
Using OSS Usage Data to Sell your Company

Using OSS Usage Data to Sell your Company

Learn how Nestybox used Scarf to gather better project insights and provide accurate data during their recent acquisition.
A Different Approach to Measuring Open Source Community Health

A Different Approach to Measuring Open Source Community Health

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?
Scarf Tech Stack: Relude

Scarf Tech Stack: Relude

This blog post will talk about Relude, a project we use in the majority of our Scarf tech stack
Python Wheels vs Eggs (And How Data-Driven Decisions Must Become The Norm in Open-Source)

Python Wheels vs Eggs (And How Data-Driven Decisions Must Become The Norm in Open-Source)

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.
Changelog: Company Identification Change

Changelog: Company Identification Change

Announcing a new change to the way we identify companies.
Announcing Python Support

Announcing Python Support

Advanced registry analytics are now available for Python package maintainers
Project Spotlight: Scarf Gateway Stats

Project Spotlight: Scarf Gateway Stats

This Project Spotlight will focus on another exciting open source project, Scarf Gateway Stats.
Scarf Will Block Package Downloads from the Russian Government

Scarf Will Block Package Downloads from the Russian Government

In solidarity with Ukraine, Scarf Gateway will no longer service package downloads from Russian Government sources.
Changelog: New Pixel Snippet

Changelog: New Pixel Snippet

A notice to our Documentation Insights users.
Community Spotlight: nix-community

Community Spotlight: nix-community

This is the second post in a new series from Scarf: Spotlights where we highlight awesome projects and communities.
Changelog: Registry Validation for Auto-package Creation

Changelog: Registry Validation for Auto-package Creation

A summary of the new registry validation feature for auto-package creation.
Three Ways to Build Better Products Through Analytics

Three Ways to Build Better Products Through Analytics

A special guest post from open-source analytics company PostHog
New Year, New Scarf Features

New Year, New Scarf Features

Today, we're launching some of the most frequently asked for features since we launched Scarf Gateway back in March.
The Scarf Tech Stack

The Scarf Tech Stack

How Scarf is built
OSS Project Spotlight: IHP

OSS Project Spotlight: IHP

In a new blog post series, we'll highlight great OSS projects that are using Scarf. Today, we are featuring IHP, a modern batteries-included Haskell web framework
Measuring Downloads of Anything You Distribute

Measuring Downloads of Anything You Distribute

Scarf's core registry infrastructure has leveled up to support any kind of direct file download
Announcing Nomia and the Scarf Environment Manager

Announcing Nomia and the Scarf Environment Manager

Our mission here at Scarf centers around enhancing the connections between open source software maintainers and end users. Learn how Scarf + Nomia can reduce the complexity and increase the efficiency of the end-user open source integration experience.
Announcing The Scarf Gateway

Announcing The Scarf Gateway

Understand how your containers are downloaded and decouple your project from your registry
The Open Source Business Metrics Guide 2024
November 21, 2024

The Open Source Business Metrics Guide 2024

Today, the most commonly accepted metrics for open source adoption and growth are heavily focused on the contributors and community (the idea is healthy contributions should equate to healthy adoption). While these are useful metrics, they are only part of the picture. This guide is built for those at open-source-based companies who are responsible for growth and adoption. 
Sara Dornsife
Sara Dornsife
Bringing Open Source Usage Data Directly to Your CRM: Scarf's New Salesforce Integration
November 12, 2024

Bringing Open Source Usage Data Directly to Your CRM: Scarf's New Salesforce Integration

We’ve got some exciting news: Scarf just launched a powerful, native integration with Salesforce, bringing Scarf’s rich open source usage data directly into your CRM. No more bouncing between tools or setting up S3 data exports—you can now get all the insights you need where you already do your work.
Sara Dornsife
Sara Dornsife
ARMO leverages Scarf to find high intent signals: Download + Pricing page = INTENT
October 31, 2024

ARMO leverages Scarf to find high intent signals: Download + Pricing page = INTENT

Scarf, a platform designed to provide open-source projects with deeper insights into their users and usage patterns, was the answer ARMO needed. By integrating Scarf into Kubescape, ARMO was able to regain visibility into which company has been using Kubescape, filling the gap left after their CNCF contribution.
Sara Dornsife
Sara Dornsife

Why Your Open Source Startup Is Going To Fail (And What You Can Do About It)

As the open source movement continues to gain momentum, a growing number of entrepreneurs are launching startups centered around commercializing open source projects. However, the journey from open source project to profitable startup is fraught with potential pitfalls. In fact, according to various sources including Forbes, Investopedia, and Harvard Business Review, it is estimated that around 90% of startups fail.

This guide aims to equip startup founders and open source companies with insights into ten common mistakes made during this process, and strategies to avoid them. From undervaluing the power of direct questions to losing sight of core metrics, these mistakes can undermine the potential of your startup. By avoiding these common missteps, you can pave the way for the success of your open source startup.

Launching a Startup: 10 Common Mistakes That Founders and Companies Make and How to Prevent Them

1. Building an Business without a Plan

Success in the world of open source projects is indeed a feat to be proud of. A thriving community and the sense of achievement derived from it can often give you the confidence to think about building a successful business around your project. But let's hit the brakes a bit. While it's a strong foundation, it's no guarantee of commercial success.  While growth and adoption are indeed vital, they're insufficient on their own for a sustainable business model. In the face of exciting opportunities, you need to be prepared to capitalize on them strategically.

Growth and adoption are fantastic, but without a solid plan to monetize your open source project, they might lead to missed opportunities.

The path to turning an open source project into a profit-making business isn't about waiting for your community to grow so large that monetization magically sorts itself out. Growth and adoption are fantastic, but without a solid plan to monetize your project, they might lead to missed opportunities. The real deal is to have a crystal-clear vision about how you'll earn revenue in the future. What offerings are you planning? Have you verified if there's a market for it?

Even in the early stages of a company, it's crucial to identify potential revenue streams. Investors initially put faith in your ability to figure this out. But as your funding needs increase, your business model becomes pivotal. Start preparing answers to key questions: Who are we targeting for our commercial offerings? How many of these potential customers exist? What are they willing to pay for? What will be our revenue models? What is our product-market fit? Remember, even tentative answers are better than no answers at all. And don't forget to involve your community in these discussions, their insights can be invaluable.

Also, don't fall into the trap of assuming that securing early investment equates to your open source project being easily commercializable. In recent years, investors have backed individuals they trust to navigate the challenges, but sometimes, despite best intentions, the product itself might not translate into a viable commercial offering. Always remember, investment is a vote of confidence in your potential, not a guarantee of your product's commercial viability.

2. Not Asking Users the Right Questions

Hate to break it to you, but if you're not asking questions, don't expect a winning outcome. A common oversight among many founders, particularly those in the open-source space, is neglecting to pose the difficult, pointed questions - especially when it comes to the commercial side of things. Asking someone to part with their cash for a feature or a service can be tough, particularly if your comfort zone is code rather than commerce. But as a founder, you've got to wear every hat in the business, no matter how unfamiliar or uncomfortable it feels.

Communication with customers: Five essential factors - Customer Experience  Magazine
Many founders, especially those in the open-source space, tend to overlook the importance of asking difficult and pointed questions, particularly when it comes to the commercial side of things.

Asking your user base (or potential users) probing questions is a responsibility you can't shirk. Sure, you can delegate or hire out, but verifying your assumptions about what people will shell out for is crucial. Let's say you're building a security-tight offering for highly regulated industries. You may find that public cloud offerings are a no-go for banks, financial institutions, medical companies, etc., who may require private cloud offerings with certain security bells and whistles. It's much better to uncover these quirks early. Similarly, figuring out if there are features you could reserve for a SaaS or open-core offering requires a genuine understanding of your user base. Will they open their wallets for it? You need to ask.

Founders, CEOs, and exec teams often fall into the trap of constructing their vision of what users want, which may not align with the market reality. In a surprising twist, many open-source founders might not even spring for their own product, opting to use the open-source version instead. This is often because they themselves are not the target customer. Remember, it's not about what you want; it's about what your users are willing to pay for.

3. Navigating Business without a Roadmap

Got dreams for your company? Awesome. But dreams without a roadmap are just fantasies. To move from wishful thinking to reality, you need to ask yourself some pointed questions. What's your vision of success? What are your 3-month, 6-month, 12-month targets? What are the key milestones on your company's journey? Remember, we're not just talking about project management here, but the actual shape of your company's future. Like any trip, you need to know your destination and the path to get there. Without clear alignment, especially in remote teams, your goals can start looking like a game of telephone, with everyone marching to a different beat.

Let's say you're aiming for 1M in ARR. Sounds exciting, right? But it's too broad. You need to dissect that goal, understand the specifics. Selling T-shirts and selling subscriptions both could fetch you 1M in ARR, but they are radically different paths. So, what are the mini milestones on your route to that 1M?

Why you need a business roadmap - HRKilns
Dreams for your open source company are great, but without a roadmap, they’re just fantasies. You need to know your destination and the path to get there.

For example, to reach 1M in ARR in 12 months, you might need:

  • 1K users to try out your software
  • 100 of those to sign up and start paying
  • To attract those users, you might need a library of example code, tutorials, and seamless integrations with existing tools
  • To convince them to sign up, you need to outdo competitor X by having features X, Y, Z in your product

The takeaway? Break up the mammoth task into smaller, digestible bites. Every startup should have a clear vision, a tentative roadmap to get there, and a team that's aware of it and is hustling towards the same goal. After all, Rome wasn't built in a day, but they were laying bricks every hour.

4. Believing Project Growth Will Automatically Mean Financial Success

Don't fall into the trap of thinking, "if you build it, they will come." Simply having an open source offering doesn't guarantee a flood of users who find it, use it, or deem it valuable. Heck, even successful projects wrestle with this challenge. So, don't bank on the idea that just because you've spent sleepless nights developing your masterpiece, users will automatically show up and start throwing money at it. The reality is a tad more complex - you've got to strategize, market, engage, and repeatedly prove your value to win customers.

5. Deviating From Your Core Mission

Just like Captain Ahab in Herman Melville's "Moby Dick," some startups get entangled in the pursuit of a solitary vision or customer, often deviating from their core mission. It's relatively easy to say 'yes' when opportunities or requests come your way, particularly when they come bearing a promise of immediate cash flow. Companies might dangle a hefty cheque in front of you to implement specific features or to rejig your roadmap according to their whims. While this might appear tempting, it's a two-edged sword.

This might lead you down a rabbit hole and distract you from your original goal. On the upside, it could help you understand your market better, or even realize that your initial alignment was off. However, it's more often than not a mere diversion. The vital question to ask yourself when developing features to secure a deal or two is - "How valuable will these features be to the community? Will our core audience use them? Would they be willing to pay for these features?"

If you find that these additions have limited appeal for your primary market, you're probably chasing a white whale. And just like Ahab, your obsession with this elusive 'big catch' can cost you your mission and business. So, choose your battles wisely, align your product with your vision, and focus on creating value for your primary audience.

6. Attempting To Do More Than You Are Capable Of

The mantra "go big or go home" holds allure for many startup founders. However, while it's a great rallying cry, it often leads to the pitfall of overextension, and in the worst-case scenario, running out of money and collapsing. As a small business with limited resources, having a grand vision is beneficial, but focusing on realizing a slice of that vision bit by bit is more cost-effective and sustainable. Too many companies start with a broad, ambitious vision, trying to push forward on multiple fronts at once, which can lead to slowed progress and a dilution of focus.

How open source maintainers keep contributors—and themselves—happy · GitHub
The “go big or go home” mantra is tempting for many startup founders, but it can lead to overextension and, in the worst-case scenario, running out of money and collapsing. This is especially true for open-source businesses.

Imagine your business as a plate at a buffet. The vision is the sumptuous spread of dishes laid out before you. The temptation to fill your plate with everything at once is strong, but it might lead to indigestion or, worse, food going to waste. The smarter approach is to start small, pick the dishes (read: tasks) that seem the most appetizing (read: impactful) and focus on savoring them first.

If you are lucky enough to have the resources and funding to move multiple features and initiatives simultaneously, that's great! But remember, it's often more beneficial to do a few high-impact things exceptionally well rather than juggling a multitude of tasks in parallel. Being selective with your 'menu' choices not only ensures steady progress but also allows you to concentrate your resources where they can make the most difference.

7. Prioritizing Contributors Over Users

Why Do People Contribute to Open-Source Projects? - Planet Crust
While open source project contributors may drive the vision and manage the organizational aspects of the project, it's the users who ultimately benefit from their work.

In the open-source world, it's easy to get star-struck by contributors. After all, they're the ones who bring an electrifying sense of energy, initiative, and validation to your project. They're the folks talking up your product at conferences, blogging about it, or even creating some buzz on social media - all of which are vital for continued growth. But here's the kicker: while contributors get the spotlight, it's the users who keep the lights on.

Contributors, as valuable as they are, represent a subset of the user base. They're the motivated, tech-savvy types who are eager to roll up their sleeves and dive into the nitty-gritty of open source work. But in many instances, they don't perfectly represent your target customer. These highly engaged contributors might lack the willingness or even see the need to pay for premium features or services because, well, they're happy to DIY their way around. Their perspectives and feedback are undoubtedly important, but they don't always align with the needs of the majority of your users, particularly those who might be willing to pay for enhanced features or a more streamlined experience.

This isn't to downplay the importance of contributors. They are, without a doubt, an integral part of any open-source project. But it's crucial to remember that not all users are contributors. As a business, it's vital to keep your finger on the pulse of the broader user community. Be mindful of their needs, feedback, and experience, because it's often these users, not just the contributors, who could turn into paying customers and thus drive the commercial success of your project.

8. Being afraid to ask for money

In the open source community, where the ethos is rooted in accessibility and freely available resources, many startups grapple with the challenge of monetization. Two prominent pitfalls are delaying the initiation of charging for a product and underpricing their offerings. The hesitation to ask for money in a culture that extols the virtue of 'free' is a hurdle many open source companies need to overcome. Further, the anchor effect of '$0' in open source could lead companies to undervalue their product, setting a price point that's too low. It's crucial to remember that while the software's source code may be free, the innovation, support, security, and convenience a company provides through its commercial offering holds considerable value. Charging for your product not only contributes to your sustainability but also signals to customers that your product has worth. Balancing the spirit of open source with the necessities of a business requires thoughtful pricing strategies, and overcoming the fear to charge for the value provided.

9. Breaking the Company Culture by Hiring the Wrong People

The temptation in many startups, particularly those in the open-source community, is to bring in a "world-class" executive team as soon as funding hits the bank. Founders, often first-time executives, scramble to hire seasoned pros from larger companies to fill roles in areas they're less familiar with, like operations, marketing, sales, or product development.

Become an Open Source contributor - DEV Community
Hiring experienced professionals from larger companies often triggers a series of problems as they may not mesh well with the company's culture or its current growth stage.

But this approach often triggers a series of problems. It's not that these new hires are incompetent; on the contrary, they usually come with sparkling resumes and proven track records. The issue, however, is that they may not mesh well with the company's culture or its current growth stage. The dynamics of running a 20-person company differ vastly from those of a 100, 200, or a 5,000-plus-person enterprise.

These experienced executives, with their polished methods and reliance on structured programs, often bring approaches designed for much larger companies. It's like recruiting an executive from Oracle to run a 10-person database startup: they're used to hefty budgets, established procedures, and resources that a small startup might not have. By hiring such an individual, you risk a significant shift in the company's culture.

Remember, bringing an executive on board is not just adding one person to the team. Their preferred working style and culture influence hiring decisions and shape the wider team culture. This could potentially trigger drastic cultural shifts in your company. Therefore, it's crucial to be cautious and protect your company culture when hiring executives. Look for leaders who have experienced your current growth phase and the unique challenges of companies your size.

However, this doesn't only apply to people coming from larger corporations. Employees used to leading small teams may struggle to scale their management skills to larger teams. Each size demands a different skill set.

Lastly, be aware that this trend can lead to early bloat in your company, often resulting in layoffs when ROI isn't realized. For instance, a new marketing head from a bigger company might increase spending on events to generate leads. They're used to seeing the power of marketing at a large scale, but the results might not match the increased costs in a smaller company. A startup might not have the resources to sustain this kind of spending unless the ROI is swift and significant.

10. Ignoring the Growing Pains - Necessary Changes and Alignments as the Company Expands

As a company expands, certain processes and strategies that once worked seamlessly start to crumble. Systems that functioned smoothly with a 10-person team can fracture at 20, break completely at 50, and then shatter all over again at 100. Recognizing and preparing for these growing pains is crucial to successfully navigating each growth plateau.

With every growth phase, there's a risk of losing efficiency and spinning wheels due to outdated processes. It's important to constantly reassess your operations and strategy, anticipating potential chokepoints as your team grows. By identifying potential issues in advance, you can adjust your strategy and avoid operational breakdowns that slow progress and frustrate your team.

Maintaining open communication lines is key during these growth periods, but equally important is clarifying roles and responsibilities. As the company expands, tasks may overlap or fall through the cracks without clear delineation of duties. By ensuring that everyone understands their specific areas of focus and responsibility, you can maintain productivity and morale even during periods of rapid growth.

Conclusion:

In conclusion, while the journey from an open source project to a successful startup is a challenging one, it's far from impossible. By avoiding these common pitfalls, you can increase your chances of commercializing your open source project successfully. Each step of the way, remember to engage your users, align your team with your vision, hire the right people who fit your culture, and keep track of your core metrics. Your open source project has the potential to grow into a thriving business, and with careful attention to these critical areas, you can navigate the path to success.

This is the end of this article about 10 errors that many founders commit and how to prevent them. I hope you enjoyed it and found it helpful. But before you go, I have a question for you: have you ever been part of a company that suffered from one of these mistakes and failed? Which one was it and what happened? Follow us on LinkedIn and let us know.