Cup of Joe: Open Source Is A Win For Big Corporations And A Fail For Entrepreneurs
Well I have some big news to share with you today. This week I ventured in to the 21st-century and purchased my first smart phone. I ended up going with Motorola’s DroidX. There are a lot of reasons why I decided to go with DroidX. But one of the reasons was a post by well-known venture capitalist Fred Wilson. Fred outlines the major market advantage that Andriod has over the iPhone.
Wilson illustrates that Android apps have a much larger market because Google’s open source software allows for wider integration with a more diverse array of devices and companies. Whereas the iPhone market is tightly controlled around only one manufacturer and service provider (at the moment). Because of this, companies looking to expand into the mobile app market should consider the Android platform as a more stable and larger market.
This got me thinking a lot about open-source software and its affect on business. In the past, I have had a love-hate relationship with open-source. When I was first learning how to write software for the web. I was a complete open-source fan boy. I remember feeling a real sense of community and openness within the open-source development world. However, as I began to develop software with a business motive I soon found that as an entrepreneur open-source can have devastating impact on protecting your investments and scaling your business.
My major beef with open-source software is the use of licenses such as the GPL that do not protect entrepreneurs from having their products and ideas stolen. Now don’t get me wrong, there are plenty of successful entrepreneurs that have built scaling, sustainable businesses on the GPL. In fact there are a whole host of emerging WordPress developers that are building thriving businesses on top of the GPL. To a great extent their success is completely driven on ability to leverage their own unique communities and marketing efforts.
However, this does not excuse the fact that anyone can take their products and do whatever they please without their permission. For example if I wanted to build my own WordPress premium theme business all I would have to do is purchase premium themes from other WordPress developers and sell the same themes on my own websites. I could even sell them a few dollars cheaper to under cut their original creators.
This type “steal and sell” business model is completely legal under the GPL and is happening at an increasing rate. Because of this, open-source software licenses like the GPL can be devastating for software developers that build innovative products with little marketing/legal investment.
While open-source can have a negative impact on entrepreneurs it has worked wonders for corporations. Take Google for example. With Google’s open source Android platform Google is able to access an expanding mobile market that has potential to drive the future of online communication. With Android, Google already is able to connect and spread its platform to millions of new users. This type of access and flexibility would not be possible without open-source software. Keeping Android open-source allows for Google to engage many different service providers and device manufacturers. Which means more users and more ads.
I am thankful for open source because it has the power to spread information and educate. However, I do not advise entrepreneurs or small businesses to create open-source products as their primary business model, unless you are willing to take a substantial loss in revenue.