Should Open Source Projects Accept VC Backing?
According to a talk by Benchmark Capital's Rob Bearden at this week's Open Source Business Conference (OSBC), the nature of open source business models are changing. He says open source companies should strive to become the "enterprise standard" in their market space in order to effectively monetize their commodities. He also notes that if companies are willing to embrace the idea of making money off their open source projects, then they might be rewarded with an infusion of venture capital cash.
It used to be commonplace for open source companies to enter a market where proprietary software companies already had a strong presence, and make headway only by giving customers a free alternative to a previously pricey solution. Bearden says that instead of focusing on "free," CEOs should examine what new issues are cropping up and become the first to find ways to fix them. In fact, he went so far as to say that an open source approach to software development ought not to be considered as a viable business model, just a method of distribution.
While the idea of money as a motivating factor in an open source project might raise the hackles of some purists, it's not really a new idea.
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