GitHub GitHub for Startups, 27 Apr 2023

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From YouTube: The State of Open Source with OSS Capital

Description

Join us for a conversation with industry leaders from GitHub and our special guest, Joseph Jacks, founder at OSS Capital. We’ll discuss the state of open source, OSS investing, startup growth strategies, and the latest OSS initiatives from OSS Capital and GitHub.

TIMESTAMPS ⏰
00:00 - Introduction
06:15 - Thoughts on the State of Open Source Software
11:22 - Commercial Open Source Strategies
18:26 - OSS Capital
30:02 - Founder Advice
43:10 - Where to stay in the conversation

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- https://twitter.com/JosephJacks_
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About GitHub
It’s where over 100 million developers create, share, and ship the best code possible. It’s a place for anyone, from anywhere, to build anything—it’s where the world builds software. https://github.com

A

And I think we're live all right. We're live so welcome to the GitHub for startup Venture Series. This is our first in a series of conversations with VCS as we discuss the state of Open Source, open source, investing startup growth strategies and the latest open source initiatives.

A

So my name is Abby kubunak Mays I'll, be your moderator for today. I lead, github's, open source, maintainer programs and I'm joined by our special guest, Joseph, jacks or JJ. He's the founder and general partner of OSS Capital OSS capital is the first early stage of EC exclusively dedicated to backing lending leading commercial, open source, startup Founders on a global basis since 2018. and so for. Everyone who's watching a goldcast feel free to put any questions that you have for JJ or myself in the chat. We'd love to hear from you, so hi JJ welcome.

B

Hi Abby, thank you for having me.

A

That's great so just to kick us off. First question is: uh can you tell me a bit about your background and how you got involved with open source.

B

Sure um well, I would say professionally. I was first really thoroughly introduced to open source while working at a originally French Open Source software company called talent t-a-l-e-n-d. That was a tricky one to pronounce, and um that was in 2010, so I guess 13 years ago, and I was one of their sales people. Basically Talent had this like really popular open source project in the data integration market, so like ETL tool, Inc and I was selling their sort of Enterprise version as as part of like getting hired and joining this company. You know they.

B

You know you had these like really detailed. Like employee, onboarding um yeah, you know sort of processes. You really had to understand like what is open source and.

A

B

Know how does that work and how does it affect the way the product is sold and so on and so forth? So I'll skip a lot of history but um I've randomly. You know, latched onto that sort of experience and and sort of observed over the next few years, working in a few other software companies.

B

uh You know proprietary ones uh uh as well that there's really like this fundamental difference between uh you know: open source uh technology, company and a closed Source or proprietary technology company and so I started to kind of like formalize, that that sort of, like terminology or language or whatever um and started blogging about it over the last uh I guess, seven or eight years I started a couple open source uh startups uh myself and I was very lucky to um start the first kubernetes company, which is a project that Google released in 2014 and um that uh that was a really huge privilege and and a massive uh you know a lucky event.

B

You know from me uh just just uh hearing about the project and- and you know really like just attaching myself to it- early on and doing some evangelization and stuff and um I started kubecon.

B

The the kubernetes Community Conference and I was lucky to kind of like uh um uh build that for for a year or so, um and you know so what I've been doing for the last like five years is um I, guess what we can primarily talk about, which is um OSS Capital, so I started um osis capital in September 2018 and um we uh we are, like you, said the the first uh fund that has an exclusive Focus to um uh invest in open source Founders and uh we've been doing that uh very internationally.

B

We have about 50 Investments. um uh Most of our companies and Founders are actually uh not based in the United States, which is, which is a pretty interesting something I've noticed the other day and it's sort of very similar to how open source works.

B

You know on GitHub, you have developers in you know Argentina and Singapore and Canada and South America and all over the United States, and you know all over the world really, um and so it's a huge privilege to uh to do that and our thesis at um OSS capital is, we think open source is eating software. uh A lot faster than software Z in the world.

A

B

You might have heard the software scene in the world thing. um We think open source is eating software itself uh much faster than than software Z in the world, um and so that's that's, basically what we do and we're we're really seed investors. We try to invest. You know at incorporation, as the first investor, as the company is kind of getting started.

A

That's awesome, yeah and I do really love that democratization effect that open source often has so I love. How you mentioned how so many of your Founders are global cool. So what um yeah? What do you think about the state of Open Source and how it's changed in recent years? Do you think there's any opportunities or challenges.

B

I I do I, do think that there's opportunities and challenges- and um you know I, guess one thing that I've noticed in the last couple few years in particular, is just there's a huge increase in in the interest and appreciation for how critical open source is to uh the tech industry and and for careers and knowledge and learning, and everything um and I think if we just look at GitHub, which is which is the sort of the you know, the the platform for building um open source and collaborating as a software creator and developer and sort of the definition of developers evolving in um and changing, as well with uh with uh with AI uh kind of becoming a really big deal.

B

um I think that open source is becoming even more critical and and important to the world. um People uh have different points of view on this, but my my view is that uh the future of sort of all digital technology is really grounded in in open source and.

A

B

And more people will will have a stronger appreciation for that. So I think over the last few years, there's just been a huge increase in uh in interest and I mean if you just take Microsoft as as one example.

A

B

They have demonstrated under really satya's leadership, um just a very multi-faceted um Embrace and appreciation for for open source, obviously acquiring GitHub, which I think will go down in history. Is you know one probably one of the best Acquisitions in history, uh but I think also, you know opensourcing.net the the language runtime embracing Linux. um You know embedding Linux in in two windows.

B

um uh You know which is which is something I, don't I, don't think anyone really saw coming um embracing kubernetes, um which is a technology created by a you know, a direct competitor of uh uh of Microsoft's and um just a long list of other things.

B

I think that I've I've, completely missed I mean well visual Visual, Studio code right, Visual Studio, having gone from what sort of uh a very uh small market share, uh uh IDE to becoming the dominant um uh uh developer, uh IDE uh in just a just a few short years, which is really really remarkable, uh really primarily due to open source.

B

um So that's that's kind of just like I I'm, a huge fan and an advocate for.

A

B

Generally speaking, um I think I apply a lot of like specific. You know, sort of points of view, content creation and everything I'm doing uh with osis capital is the intersection of Open Source and capitalism.

A

B

Business right, and so um what I? What I think is increasingly also happening uh in the tech industry, is um when found when a new uh founder sort of is presented with this choice of you know as I build my company from zero.

B

um Do I, build it as a proprietary product or do I build it as an open source project um in in you know, in the initial stages of sort of like MVP product development, user acquisition and sort of those initial things before you before you get to a business model and everything.

A

B

Know I think that increasingly um a lot of Founders- uh and you know I- don't necessarily have uh well actually I- do have a lot of data on this, but I think increasingly more and more Founders are actually choosing to start off. As you know, let's build. Let's build an open source project and.

A

B

You know see what happens and see if that actually helps us with um building a better technology. Getting more you know, collaboration and contribution from a community.

A

B

That can actually translate to and grow into. uh You know a product that we can sell and Market to a customer yeah.

A

B

That's kind of one thing that I see um for commercial, open source companies, the companies that I focus on at OSS Capital, there's really not that many of them, uh as as kind of strange as that is that they're getting a lot of attention these days. Yes- um and uh you know, I- think it's it's a it's an honor to have this conversation uh uh with you and share that with the the the Microsoft and GitHub community and everything.

B

But um you know I think just I've seen a huge increase in in uh interest and excitement for these companies, but there's still a very small part of the of the tech industry, um but by my account, there's maybe around a thousand um uh open source startups in the world uh across all the different categories. You know: Dev tools, applications, consumer um and.

A

B

Really not that many, um and if you compare that set of like roughly a thousand to you, know the the the set of Proprietors uh software companies um any more on the other side is probably I would say, probably hundreds of thousands on on the other side, um but the interesting thing that I would just kind of uh uh uh mention- um and we tracked this data really closely- is the number of Open Source startups out of that thousand, you know set that have raised Venture Capital, uh it's it's half it's!

B

It's just an absolute enormous percentage. That's.

A

So interesting, yeah, okay,.

B

It's an enormous percentage, Yeah.

A

B

To the other set of you know, let's say a couple hundred thousand: um it's maybe five percent- that every that have raised Venture Capital, maybe of course, I think we're really generous, um so not only have open source startups, gotten enormous attention. uh They're. Actually, you know just statistically um an incredibly effective way to build a company uh attract funding from.

A

B

Or from other generalist investors who are very excited about this approach uh and um we like to think that philosophically they're just better for the world, they're more sustainable, they're, more they're, more exciting to build- um and um you know, there's failure modes, there's things that that don't work and you know startups- are risky regardless and they're. Very they're, they're, very um costly. You know on a personal level and it's you know a monetary level and everything, but um actually we think they're more Capital efficient than proprietary software companies.

B

So maybe they don't actually need as much money but.

A

B

That that's just kind of some some comments on the on the data.

A

That's super interesting and yeah I think that's definitely something I've seen working directly with open source maintainers, where a lot of them are trying to figure out how to sustain their project and keep it going long term and, like I, think a lot of it's because of the work that you've done and the work that there's been just in the community, just more awareness around commercial open source and that there are these models that you could sustain your project, long term, I'm thinking, especially if the GitHub accelerator I see Kara here in the chat, hey Cara.

A

She leads the accelerator, um but even just talking to those participants. How many of them were doing this because they wanted that um they wanted to really change the ecosystem. They wanted that developer. Buy-In um things like lower production costs with this co-creation model, I think everything that you said. It's definitely something I'm. Seeing on my end, too,.

B

A

Cool and yeah, so how have you seen the commercialization of Open Source evolve over the last decade, yeah.

B

It's it's really fascinating. I think commercialization has evolved in so many different ways. um I would even go back further. So if I could.

A

Kind of think yeah.

B

Concisely describe if I can, because I tend to ramble. So if I don't do this concisely, just that interrupt me, um I. Think the beginning of this category. This this way of building um software companies was really kind of when Red Hat was founded in in the in the early 90s. There are actually a couple of other less uh well-known examples: pre-red hat of of.

A

B

Full company building, uh but uh the names you know no one would really know of. So, let's just stick with red hat um in the very beginning of monetization. It was really about you, know: selling and support uh contract or selling selling an insurance policy where you would essentially like you would create a contract that would basically give the customer protections um uh and guarantees if something went wrong.

B

uh The company uh providing that contract in the case, Red Hat, vis-a-vis Linux, um would um would be able to provide assurance and skills, and you know technology and resources to help the customer. If something if something went wrong and there's a lot of uh qualifications for if something went wrong right like if the software uh you know violated some, um uh you know, uh you know some.

A

B

Particular security uh procedure, or if there's a you know if it's a data, Integrity issue or if there was a production um issue or whatever there's a lot of ways of kind of defining that, but that's kind of the the red hat way of of monetizing is you're not actually selling like a proprietary product around the open source, like the whole thing, is open source, but the business model is more of like an insurance.

A

Company service, yeah, okay, yeah.

B

I I would use that it's not literally an insurance policy, but I would use the metaphor of kind of like an insurance policy, but.

A

B

Customer's paying for exactly as a service uh support support contract, um you know in some cases could be very high margin. um If the support contract is not, you know, really sort of used too much, and the company has a very high level of service. You know that support contract Revenue uh is going to be very high margin and they're going to be able to build a successful business, and so that's actually what red hat did, but there's very few companies that have replicated that, like red hat business model right.

A

B

Instead, what happened over the next kind of like wave of Open Source companies, I guess, is what they did was they built uh something called dual licensing and what licensing does is you have like? um The core technology is permissively licensed as open source and.

A

B

If you want to run that software in production or you want to do something more commercially related with it, you have to purchase a separate license. That gives you the the right to do that, and so there was a set of companies that used dual licensing pretty effectively.

B

You know a couple of them had you know public outcomes, a couple you know a few of them had huge uh M A outcomes so like MySQL, for example, sold to some Microsystems which was sold to Oracle um and that's still a big part of Oracle today, not a huge part, but the sort of a part of their database portfolio and then I.

B

Think, like the the wave that came after dual licensing was really SAS, uh which is you take the open source and you just offer it up as a service, and that gives you another way of monetizing where the core technology, it's still open source, but.

A

B

Sometimes what the customer will want is increasingly just like look just run it for me. I don't want to manage the data. I just want to authenticate with an account, and then you know everything is taken care of for me and that's a very effective business model as well.

B

um What I think we're starting to see in the sort of the next wave of Open Source companies, which is really interesting, is sort of a combination of all of those different models where some companies will offer that sort of insurance policy in tandem or in parallel with offering sort of a dual licensing contract and then also they'll offer like here's, the Enterprise version, of course, and that's like a subscription that you could pay for to run the software in your in your own data center or your your customer environment, but you're going to pay for additional features.

B

So the open source project is unlimited, it's extremely powerful. You know millions of developers use it. uh There's no there's no there's no crippleware there, um but the Enterprise version, which is enabled by and built around the open source. It's really built for a very specific Persona and it's built for an Enterprise customers built for a fortune, 2000 company right they make an insurance company or a retail company, or you know uh what have you and those those companies have different requirements and their feet.

B

Their feature requirements and their security requirements are very different than than those of the individual developer um right, and so that that model is very popular.

A

um These days, yeah the git Labs yeah.

B

Yeah, that's more that's more of the kind of the open core.

A

Right, yeah, I.

B

I like to think that open core as a term really should just be revised uh because it really transcends all these different business models. I.

A

B

I think Red Hat. This is kind of a controversial like Insider baseball type of thing to say, like it doesn't really.

A

B

Too much sense in the broader industry context. It's like okay, that makes sense, but I like to think of red hat, even as open core, because they're open core it's Linux and.

A

B

Crust or the frosting or the wrapper or whatever metaphor you want to use around the open core, the proprietary parts are there: are there mark their brand, their.

A

Insurance policy.

B

A

B

Procedures for doing updates and updates in their sort of supply chain for for updating packages. All of those things are proprietary by the way.

A

B

Hat is not open source, otherwise they would not have a business, and so um that's kind of like how I'd like to think about open core is I. Think there's like for for all commercial open source companies, your open core, your.

A

Core technology.

B

Department Source, but you really have to figure out in the context of your industry, your business, your Marketplace, your users, Which business models are fit for you, and sometimes it requires some experimentation.

A

um Sometimes it's.

B

Very obvious, like oh we're, just going to build the service, and we know that that's going to work really well to create like a multi hundred million uh Revenue business over. You know the next uh several years or a decade or whatever, like you know, or billions in Revenue like that, sometimes that's kind of obvious and it works uh in other other cases.

B

You need to kind of run multiple monetization schemes or approaches like at the same time um right, which frankly, is the case with like GitHub, for example, like you have a user-based pricing, you pay for repos and you have the sort of the you know. Individual user or in a team could represent a few thousand in Revenue per month. But if you have 100 million users, that's actually a pretty good Revenue stream you're going to do that in addition to building a new product for Enterprises.

B

So that's that's why GitHub has GitHub Enterprise and you build a copilot for Enterprise and and so on and so forth. So I think that the best companies as far as monetization and like business models are concerned. In my view, the best companies are um very iterative and sort of uh adaptable in terms.

A

B

Or the business models that can work for them and once you identify the business model, it really works. You know really refine and optimize and scale that, but it does take some time up. But what I don't like too much is I think is sort of like slightly less optimal. Is when you, when you build a company and.

A

B

Sort of have this like business model, religion from the.

A

B

You're like no, this is how we're going to make money, and this is exactly how it's going to work and oftentimes. When you have a community and you have some adoption and things are very early, you know you really don't know for sure. Like you yeah, you might have some general intuition.

B

You might kind of have some sense of like what might work, but in most cases you have to kind of be humble about what what will eventually potentially work for you for your company, for your for your Marketplace so and then I I do think like looking forward, maybe far out into the future.

A

um Future models.

B

That are actually potentially super. Interesting. Are um you know, building your own like custom, uh proprietary, uh neural network model for your for your product uh or.

A

B

You know you could do something crypto related, you know, there's a lot of things that are sort of like less popular and and less sexy, based like in a crypto world. Like you know, nfts or you know, uh tokens I still think those things are actually quite valid, but they're very uh difficult to get people excited about now, because everyone's so plugged into AI, so yeah.

A

B

I think in the next kind of decade there are going to be software companies that take advantage of those types of mechanisms or um effectively monetizing and and where they actually could prove to be. Very um uh you know uh you know uh successful in in experience with those types of things.

A

That's super interesting, yeah I'd love to also get your take on I'm hearing more maintainers interested in like adding more obtain their software. Have you been seeing that and do you think that fits in any of the models that you're talking about absolutely.

B

Yeah, absolutely um you know it's like you could build a company just doing consulting and you could scale and and build a successful business. The challenge is, if you're, raising venture capital yeah.

A

B

Of these startups really want to do.

B

The challenge is that you just do Consulting uh and you never really expand to use that as a way of learning about, and um you know, sort of uh uh building other types of uh business models or revenue streams or whatever you know, whatever language um it it will, uh it will hold you back in terms of the valuation of the company how the company can grow over time, uh sort of the the the sort of the potential scale and size of the company um as well as well as the profitability of the company, like the the margins on Consulting and services, are just the realities they're just lower, because you have.

A

B

Typically, kind of delivering the Consulting contract and it's just more difficult to scale that um uh fundamentally so that that's kind of like I think a very useful and effective way. The way I think about Consulting, Services, Professional Services is.

A

B

Know it's a really useful and effective way of learning from a potential customer and creating an incentive system for.

A

B

Interaction with the potential customer to say: okay, they're, paying you money, yeah, paying you money, you're learning from them about which product you want to build for them.

A

B

That could be a higher Revenue product and a higher margin product.

A

B

Every time you want to add value to the customer, you don't have to continue selling more services right.

A

B

But I think that services and Professional Services Consulting are really effective and they're really useful. My advice tends to be in the early days.

A

In particular,.

B

Like don't do too many of those contracts keep.

A

B

Very well scoped and don't sort of like go too deep in that um you know domain because you know it. It can lead to very sub-optimal outcomes in particular, if you're, raising Venture Capital, if you're, not raising venture capital and all you care about, is building a business that can you know, feed you, your team, your family and your.

A

B

Very, very lucrative business. Absolutely you should do that all day long, but if you're building Venture Capital, which which really requires you to build, you know a billion plus dollar. You know company, um otherwise, you're you're, really you're, really not uh doing your investor the service. This is sort of the expectation setting uh misalignment um uh you know, then then I think you have to consider those those types.

A

Well, that makes a lot of sense yeah, so you see this more as a stepping stone or for the folks who just want to like sustain themselves and their family yeah.

B

Correct and you can you do Consulting and Professional Services through the life of the company, right as you have a cloud service as you have, you know, sort of the Enterprise versions taking off and you have a large Market you're serving there and there's like.

A

A large Revenue.

B

Stream from it, but um it has to be in the context of adding very specific well-scoped value to that customer in that context, in that industry um and not getting in the way of the overall uh Integrity of your overall business model right.

A

Okay and I wanted to go back a little bit. You mentioned around, like that insurance policy with the software um I think that's getting more important nowadays, with the security like open source security being a big deal and I think I've seen some groups like tidelift sort of does something like this.

A

um Have you seen this done like really well, especially around open source security.

B

Yeah absolutely I mean I think that there are some companies where their entire business model is not to. You know, commercialize a a sort of single or you know, maybe a one or two or three uh sort of collection of um open source projects, but instead they're they're, a business model, like you just said, Abby, is to build a uh security product uh where the security product is specifically targeting um both the open source community.

B

So the one company that I think of that's a very good example of that, where they're doing exceptionally well, in my opinion, is Sneak.

A

um Oh yes, yeah I,.

B

Think does exactly what we, what we just discussed, which is they have built a security product which.

A

B

Be proprietary by the way so they're, actually not an open source company, but they they have built that product in a way that really solves some critical challenges and problems for the customer and the value proposition of that product is Razor, clear, which is we're going to help you secure and manage your security risks and so supply chain around that, specifically, in the context of your open source supply chain in your in your organization and there's actually quite a lot of companies that do that that compete with sneaks.

B

Some of them are additive and complementary to sneak. um But what you just said is very is very true. I. Think that there's an adjacent way of of looking at that as well, which is that also pretty much every open source company when they build the sort of the cloud service or the Enterprise.

A

B

The insurance policy, or whatever product around the open source, they also have to think a lot about what are the security aspects and the governance aspects that your product will solve for um for for the customer and pretty much every open source, a business, you know hashicorp confluent elastic, all of them, git lab they can learn from and in fact they do incorporate a lot of the same principles that.

A

B

In terms of being a general purpose, security platform focused on open source vulnerabilities and you know, sort of intrusion and so on in the context of their specific product um and so yeah, that's absolutely I'd, say probably for the customer, the sort of the customer buyer, the CIO one of the primary things that they think about when, when purchasing the the sort of the secure supported version, you.

A

B

A source that all the developers are using is you know how is this going to help me manage my security uh requirements, mm-hmm.

A

No yeah thanks for that I think that was really helpful, I'm looking at the time, if there are any questions from the audience, I think there's some in the Q a, but um please keep adding them. There I'll ask Corey to uh curate them for us and we'll get to those soon, um but I did want to hear a bit more about OSS Capital. uh Can you talk about some of the companies that you've invested in and what Drew you in particular to those projects.

B

Sure yeah, so our our uh our fund has about 50 Investments. Now, we've we've been investing for a little over four years. We have two funds and we're heading into our third fund. All our funds are very small.

B

uh We focus on um uh you, know, seed pre-seed, investing and we try to be the first investor at incorporation and um you know, take out take a meaningful ownership stake to help the company um out of the portfolio of companies that I think um I could talk about that are maybe more known uh and are publicly disclosed. I would say, cal.com is, is one that we're really excited about, which is like an open source uh uh time scheduling management uh tool.

B

um Interestingly, they have kind of two business models like we were talking about before they have like a user-based. You know premium service at an individual level where you just put your credit card in and you pay. You know 12 15 bucks a month um and then they have an Enterprise version where they're selling that product to Enterprises, so the sort of the proprietary um uh uh incumbent uh or sort of uh competitor to cal.com would be something like calendly or Savvy.

B

Cal or you know, there's a bunch of tools there, um so cal.com's a pretty uh pretty popular open source uh company. uh Another one would be W4 games, um we're really proud about W4 games. They are the creators and stewards of the um the good joke game engine so.

A

Yeah very popular, very.

B

Popular on GitHub- yes, maybe the top 10 most um uh yeah ugly, uh contributed to and- and um uh uh you know, popular open source project- you know up there with you know, kubernetes and elasticsearch and Spark yeah, and maybe even Linux, uh and for us it's like a huge honor to to have partnered with them and um than their first. uh You know lead seed investor Godot is um yeah. It's at the world's most uh widely adopted um open source game development engine. So you can.

A

B

The 3D uh video games with it, which is really cool and um the proprietary sort of incumbents in that world, are things like Unity um uh game engine and uh Unreal Engine from uh from Epic um there's a bunch of other companies. I can talk about open. Bb is another really popular one. Actually, as of this broadcast they're launching their version 3.0, uh currently at the same time so like uh I, was tweeting about both things earlier um this morning, openbb is a finance uh trading analytics um tool. It's it's built in Python.

B

uh You can think of it as, like. You know, retail investment, research for.

A

B

Stocks uh primarily, but they also cover a lot of other assets like crypto and uh real estate and other other asset classes um and the sort of the proprietary incumbent there would be Bloomberg, uh Bloomberg, terminal um and so open BB is the number one finance app uh project on on GitHub as well. um They passed 20 000 Stars.

B

Recently the project is a couple of years old and um it's a super awesome team and uh we're we're very uh privileged to be there they're sort of their first major investor and then to help them start. The company and everything um yeah, there's a bunch of other companies. I can talk about um in our portfolio. You know we're we're I'll, just kind of give some some broader highlights where investors uh nocodb, which is sort of the leading open source alternative to airtable.

A

B

Investors in app flowy, which is the leading open source alternative to notion uh um I, think the app flow team won your emerging uh fastest growing.

A

B

Source uh award at the last GitHub octaverse.

A

B

Is really cool? um We're investors in Hopscotch, which is like the fastest growing largest API development tool on GitHub as well?

B

um uh You know sort of competitive with Postman and in the in the API development space, um and uh you know we're uh where investors in a bunch of other things, um but those are just some some highlights yeah.

A

That's awesome, yeah and I saw stability AI on your website.

B

I forgot to mention stability yeah, we're very fortunate to be uh one of one of the first few investors in stability um and um uh what would emad has been doing for uh you know kind of educating the world about uh the the value and the and the transformative power of embracing open source with these new. um These new AI uh uh models and neural and neural Nets um is is really profound and you know they're.

B

Obviously, the the the creators and stewards of this uh stable diffusion uh project and image generation um and uh they're building out a stable LM, which is the sort of the open source uh alternative to Chachi, ET um and uh they've, been doing a lot of really awesome work for sure so, yeah.

A

Cool that's great um yeah before I go to audience. Questions actually I did want to ask. um How do you balance the financial goals of your fund with the commitment to supporting open source software yeah.

B

I tweeted this the other day, it's interesting, so I would say. 50 of every Venture dollar that gets invested in an open source company uh is indistinguishable from philanthropy 50 percent, uh which, which means, uh if you do a 10 million dollar series.

B

A 5 million is going to go purely into growing and Steward Inc and increasing the quality and the the r d and everything of the open source project and the other half will go into building the product and the Service hiring employees, and you know, building value for the customer uh and selling something in exchange for money to the customer.

B

um But really half I mean I, would say. Half and frankly, in the early early days of companies, probably more like 80, plus percent of the dollars are purely focused on growing the open source Community to being very successful and widely adopted as much as possible. um And then once you really start to see this critical mass.

B

This huge adoption um I think most companies start to spend more and more of their resources and their time on on building the product and selling to the customer, and you know hiring sales and marketing people and so on and so forth.

B

um But I would say that there's like so maybe maybe a declining scale from like 80 percent in the beginning, uh gradually going down to you know: 70 60, 50, 40. I, don't think it ever drops below in the best companies right I think there's some anti-patterns that I, maybe I, won't call out because I want I, don't want to name names, but I think that the the in the best cases it stops at probably maybe 30 percent or maybe 40 percent of every dollar.

B

uh Every single dollar the company spends is, is going to grow and and nurture and continue to invest in the success of the open source technology, which is useful and valuable for everyone, not just that company. uh You know so again. There are some anti-patterns and some things that are done a little differently by other VCS, uh but that's kind of kind of how how I look at it and um you know, open source startups and what I call them cost companies commercial, open, source company. You know they're really special.

B

um They they serve two purposes, one: to make the world better and more sustainable and to increase the rate of innovation in that part of the technology stack that they're serving and on the other side, they're they're serving the customer and building a successful business and capturing you know capturing some portion of the value that they create, but fundamentally I, think every every open source business will always capture just a small percentage of the value that they create, which is very substantial, um but the the reality is the value that they create is exponentially more than than the value that you could create as a fully proprietary technology company.

B

That's just my my belief.

A

No I love that and I love. How you have that expectation going in that sum of percent will be going towards like sustaining that open source project and community, and that's.

B

Awesome, a really meaningful percentage, Yeah.

A

All right so to close this off um I think we've answered most of the questions that have come up in the Q a so what advice would you give to developers or entrepreneurs who are interested in building and scaling open source projects.

B

Open source projects in general are a very difficult thing to do as a as a as a developer as a person um and building them and growing them. um It requires a lot of commitment and a lot of energy.

B

um The number one piece of advice that I I would say: I always give is you have to get very good at setting expectations explicitly as early as possible? That is extremely important. If you don't do that, the risk of burning out and not having boundaries on your time in your life are not going to exist in you, and you will be very potentially at risk of being very unhappy, um and so you know those those things are extraordinarily critical to get right early on.

B

Unfortunately, what I see is the opposite in most cases where it's kind of like a free-for-all, and uh you know, there's no boundaries on anything and I. Think that's really really important. So as an open source, maintainer I think the best projects that I see run really well by by people that have a have a clear vision and and um and sort of boundaries are where it's it's very clear.

B

For a new, um both a new user as well as a new contributor, as well as a new company participating in that ecosystem, you know what the on-ramps are and what the best practices are, and you know what is expected to be in scope uh with the project versus out of scope with the project. What is the code of conduct? What is acceptable? You know what is acceptable. Behavior in that particular Community, that's extremely critical to set like if you run a conference, it's kind of a joke.

B

If you don't have a code of conduct right as an open source, Community I think all open source communities should have codes of conduct, uh it's actually quite shocking. Most of them don't um so that's kind of what I. What I think are the biggest pieces of advice, I would say uh at a very early stage with creating an open source project is Embrace open source, it's extremely powerful. It changes the world it will. It will allow you to like hyper.

B

uh uh uh You know accelerate your pace of innovation, but what you really need to understand is you have to set boundaries, and you have to be explicit about What, You, Won't, Do and and also explicit about what you will do and then and then it goes back to like basic human stuff. Like you know, honor your word say: you're going to do something. Do it and and things of that nature.

A

Yeah, that's awesome, great advice and um I think I'll just give a little plug. We just finished up a series of workshops for open source maintainers on avoiding burnout, personal ecology and self-care. So um if you want to go there, it's maintainers.github.com to get an invite to that private Community. But no I 100 agree with you, that's it's! It can be really tricky to do open source well and not give it too much of yourself.

B

A

So to wrap us up. uh Where can folks find you anything else to plug before we drop off.

B

No I mean I'm, pretty uh active on the internet uh all the time it's kind of like where I learn and how I how I engage with people. uh So I'll just drop my Twitter uh in the chat. If people want to follow me there, it's uh at Joseph Jacks underscore um and then you know people um uh people can find about uh os's capital and our portfolio and all of our stuff on uh os's, Capital, dot. uh Sorry oss.capital. We have a DOT Capital, TLD, c-a-p-I-t-a, Albert,.

A

B

There's no.net there's no dot IO, it's just OSS dot Capital, um uh which I I think is pretty cool, is when I found the dot Capital TLD I was like. Oh my God. This is amazing. This is perfect, um so anyways. Thank you so much for having me Abby. This was a lot of fun.

A

That was great yeah. Thank you. So much um and I'm Abby cabs on uh Twitter GitHub uh Kara's, asking about your blue sky, handle.

B

Though you have a blue sky, handle blue Sky's been blowing up I'm a massive fan of Blue Sky by the way I've been talking talking to the team and Jay and Rose are doing a phenomenal job.

B

um I'm logging into my blue sky uh client now to see exactly what the uh the.

A

Handle is I, know, Kara just joined so she's.

B

A

B

Have the default, uh so let me just type it in the things: I've got be sky.social, okay,.

A

B

Yeah, so that's my blue sky handle and I've got 54 followers on there. So I've got to work on increasing that um yeah.

A

Thank you. Thank you.

B

Again for having me, this was a lot of fun.

A

Awesome thanks so much and uh just one shout out before we head off next month is maintainer month, uh so I'm sure Kara will put or Cory we'll put the website there in the chat. um But it is a time for maintainers just to be celebrated together to share their experiences. So we're doing a bunch of things. We have more workshops for maintainers, um we'll be at open source, Summit and yeah excited to have you all there.

A

Sorry I hear an echo now so I think that's a key that if it's time to end time to wrap up, but thank you so much. This is a great chat. Jj thank.

B

A