"Should we open source this?" Every developer product company asks this question. The answer isn't simple.
Open source can build community, accelerate adoption, and create competitive moats. It can also create support burden, enable competitors, and distract from business goals.
Here's how to think strategically about open source.
The Open Source Spectrum
Not binary:
It's not "open source everything" or "closed source everything."
The spectrum:
Fully closed: No source code public. Traditional SaaS.
Source available: Code is viewable but not freely usable. Restrictive license.
Open core: Core product open source. Premium features proprietary.
Fully open: Entire product open source, MIT or Apache license.
Example - Supabase: Fully open (MIT). Anyone can self-host. Monetizes through hosted platform, support, additional features.
Example - MongoDB: Switched from open (AGPL) to source-available (SSPL) to prevent cloud providers from competing.
Example - GitLab: Open core. Community edition open source. Enterprise features proprietary.
When Open Source Makes Sense
Open source works when:
1. Your moat isn't the code
Competitive advantage is:
- Hosted infrastructure and operations
- Support and SLAs
- Integrations and ecosystem
- Brand and community
Code can be public because value is in running it.
Examples:
- Supabase (hosting and platform features)
- Ghost (managed hosting)
- Sentry (hosted infrastructure, integrations)
2. You want community contributions
Developers will:
- Add features you don't have resources for
- Create integrations to other tools
- Fix bugs
- Translate documentation
Only works if you can manage contributions.
3. Transparency is a feature
For security/privacy tools:
Developers need to audit code to trust it.
Examples:
- Bitwarden (password manager - can inspect security)
- PostHog (analytics - can verify privacy claims)
- Plausible (analytics - transparency is selling point)
4. Developer tools and infrastructure
Developers expect infrastructure tools to be open:
- Build tools
- CLI tools
- Frameworks
- Libraries
Not open = suspicious.
Examples: Vite, Next.js, Deno all open source.
5. You can build a community moat
Strong community =
- Contributions
- Integrations
- Advocacy
- Network effects
Harder for competitors to replicate than features.
When Open Source Doesn't Make Sense
Don't open source when:
1. Code is your only differentiator
If competitors can:
- Copy code
- Launch competing service
- Undercut pricing
And you have no other moat.
This killed many open source companies before they found business model.
2. You can't commit to maintenance
Open source requires:
- Responding to issues
- Reviewing pull requests
- Maintaining documentation
- Handling security reports
No resources = abandoned project = hurts brand.
3. Your market isn't developers
If buyers are:
- Non-technical business users
- Enterprises that want SaaS
- Users who don't care about code
Open source adds complexity without benefit.
4. Regulatory or compliance constraints
In some industries:
- Healthcare
- Finance
- Government
Open source creates compliance complications.
5. You haven't found product-market fit
Early stage (pre-PMF):
Focus on finding product-market fit, not managing community.
Open source after you have traction and understand what you're building.
What to Open Source
Options:
1. Entire product
Pros:
- Maximum community potential
- Maximum transparency
- Maximum adoption (self-hosters)
Cons:
- Maximum competition risk
- Maximum support burden
When: Your moat is hosting/operations, not code.
2. Core functionality only (open core)
Pros:
- Community benefits
- Retain proprietary differentiation
- Balance monetization and openness
Cons:
- Tension between open and paid features
- Community may fork
When: Enterprise features clearly separate from core.
Examples: GitLab (community vs. enterprise), Mattermost (team edition vs. enterprise)
3. SDKs and client libraries
Pros:
- Transparency for integration code
- Community contributions (language support)
- Low competition risk
Cons:
- Maintenance across languages
When: Core product proprietary, but SDKs benefit from openness.
Examples: Stripe (SDKs open, API service proprietary), Twilio (client libraries open)
4. Tools and utilities
Pros:
- Goodwill with community
- Adoption of tools drives API usage
- Low risk
Cons:
- Maintenance burden
When: Tools complement but don't compete with core product.
Examples: Vercel open sources Next.js, drives Vercel platform usage. Shopify open sources Hydrogen, drives Shopify usage.
5. Internal tools
Pros:
- Community goodwill
- Potential outside contributions
- Recruiting (shows engineering culture)
Cons:
- Need to generalize internal tools
- Ongoing maintenance
When: Tool is genuinely useful to others, not just you.
Examples: Netflix OSS (many internal tools), Airbnb's tools
Open Source Licensing Strategy
Choosing a license matters:
MIT / Apache 2.0 (Permissive)
What it allows:
- Anyone can use commercially
- Can include in proprietary products
- Minimal restrictions
When to use:
- Want maximum adoption
- Not worried about cloud providers competing
- Building ecosystem around tool
Examples: React (MIT), Kubernetes (Apache)
GPL / AGPL (Copyleft)
What it requires:
- Derivative works must be open source
- AGPL: SaaS usage triggers sharing requirement
When to use:
- Want to prevent proprietary forks
- Force competitors to open source their versions
Examples: WordPress (GPL), MongoDB tried AGPL (before SSPL)
SSPL / BSL (Source Available)
What it does:
- Code viewable
- Usage restricted (typically: can't offer as competing service)
When to use:
- Want transparency
- Prevent cloud providers from competing
- Not truly "open source" but more open than closed
Examples: MongoDB (SSPL), MariaDB (BSL)
Dual Licensing
What it is:
- Open source for free use
- Commercial license for businesses
When to use:
- Want to monetize enterprise use while staying open
Examples: MySQL, Qt
Managing Open Source Community
If you open source, you're committing to community management:
Responding to issues:
Target: Respond to all issues within 48 hours, even if just "We're looking into this."
Triage: Label issues (bug, feature, question, wont-fix).
Close stale: Auto-close issues with no activity for 60+ days.
Reviewing pull requests:
Target: Review PRs within 1 week.
Quality bar: Set clear contribution guidelines. Not all PRs get merged.
Credit contributors: Thank them publicly. Include in release notes.
Managing expectations:
Be clear:
- What you'll maintain vs. what's community-maintained
- Roadmap and priorities
- Response time expectations
Governance:
For larger projects:
- Contribution guidelines (CONTRIBUTING.md)
- Code of conduct
- Maintainer team (who can merge)
- Decision-making process (RFC for big changes)
Monetization Models for Open Source
1. Hosted/managed version
Model: Open source is free to self-host. Pay for hosted/managed platform.
Examples: Supabase, Ghost, GitLab
Pros: Clear value (convenience, scale, support)
Cons: Competes with self-hosters, cloud providers
2. Open core
Model: Core open source. Premium features paid.
Examples: GitLab, Mattermost
Pros: Clear free/paid distinction
Cons: Tension over what's core vs. premium
3. Support and services
Model: Software free. Charge for support, training, custom development.
Examples: Red Hat, Elastic (partly)
Pros: Aligns with enterprise needs
Cons: Hard to scale, support-heavy
4. Dual licensing
Model: AGPL for free. Commercial license for businesses that can't comply.
Examples: MySQL, Qt
Pros: Monetizes commercial use
Cons: Complex licensing, legal overhead
5. Hosted + premium features
Model: Hosted version has features not in open source.
Examples: Posthog (cloud-only features), Sentry (some features cloud-only)
Pros: Flexibility
Cons: Can feel like bait-and-switch if not transparent
The Build in Public Strategy
Related but different: Building in public
What it is:
Developing product openly, sharing progress, learnings, metrics publicly.
Platforms:
- Twitter threads
- Blog posts
- YouTube videos
- Public roadmap
- Public metrics dashboard
Examples:
- Buffer (public revenue dashboard)
- Ghost (public roadmap)
- Plausible (public analytics)
Benefits:
- Accountability
- Community feedback
- Marketing and awareness
- Authenticity
Drawbacks:
- Competitors see your strategy
- Public pressure
- Can't hide failures
Works for: Indie hackers, developer tools, transparency-focused products
Doesn't work for: Enterprise software, competitive markets where strategy is advantage
Open Source as Marketing
Open source is powerful marketing when done right:
Benefits:
Developer trust: "They open sourced it = they're not hiding anything."
Organic discovery: GitHub trending, hackernews, word-of-mouth.
Contributions = advocates: Contributors become advocates. They're invested in success.
SEO: GitHub repositories rank well. Open source projects get links.
But it's not "free marketing."
Costs:
- Engineering time for open source maintenance
- Community management
- Documentation
- Issue triage and support
Underestimate costs = abandoned project = reputational damage.
When to Close Previously Open Code
Sometimes companies close source:
Examples:
- MongoDB (AGPL → SSPL)
- Elastic (Apache → SSPL for some components)
- Redis (BSD → dual license for modules)
Reasons:
- Cloud providers competing
- Unsustainable with pure open source
- Business model pivot
How to do it:
Grandfather existing versions: Previous versions stay open under original license.
New versions use new license.
Communicate clearly: Why you're changing. What stays open. What changes.
Expect backlash: Community will be upset. Some will fork.
Worth it if: Business viability at stake. Better to survive with restrictive license than shut down.
Case Studies
Supabase: Fully Open Success
Strategy: Entire product MIT licensed. Anyone can self-host.
Monetization: Managed platform, better DX, integrations.
Result: Massive community, contributions, growth. IPO trajectory.
MongoDB: Open to Restricted
Strategy: Started AGPL. Changed to SSPL when AWS competed.
Monetization: Hosted MongoDB Atlas.
Result: Controversial but protected business.
GitLab: Open Core Balance
Strategy: Core features open (Community Edition). Enterprise features proprietary.
Monetization: Enterprise edition, hosted GitLab.
Result: Successful IPO, active community.
Getting Started with Open Source
If considering open source:
Month 1: Decide
- What to open (all, core, tools, SDKs)
- License choice
- Monetization model
Month 2: Prepare
- Clean up code (remove secrets, sensitive data)
- Write README, CONTRIBUTING.md
- Set up issue/PR templates
- Documentation
Month 3: Launch
- Announce on GitHub, Hacker News, Twitter
- Respond to initial issues/PRs
- Start building community
Ongoing:
- Weekly issue triage
- PR reviews
- Community engagement
- Balance open source and business priorities
Open source is a strategic decision, not a marketing tactic. It changes your company's DNA.
Do it for the right reasons (alignment with values, business model, competitive advantage). Don't do it because it's trendy.
When aligned with business model, open source is powerful. When misaligned, it's an expensive distraction.
Choose intentionally.