#92 — To be open source, or not to be open source, that is the question
July 19, 2025•6 min read
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Why it matters: The open source decision can make or break infrastructure and developer tool startups, yet most founders treat it as an afterthought rather than a strategic choice that requires "extreme consideration and gravity."
By the numbers: HashiCorp's Vault Enterprise grew from zero to over $100M ARR using an open core model, proving the commercial viability of strategic open source approaches.
The big picture
Much like former HashiCorp executive Andy Manoske, we'd argue that founders need to approach open source decisions as core strategic choices, not default settings. The decision affects everything from product development to community relations to legal exposure.
Key insight: There are significant costs associated with creating and cultivating an open source community. Without proper investment in time and resources, simply open sourcing "for kicks" appears disingenuous to the broader open source community.
Two fundamental motivations
The moral imperative
FOSS philosophy: Free and Open Source Software communities, exemplified by Richard Stallman's GNU Foundation, view open source as protecting fundamental civil liberties around privacy and security.
Core principles:
- User rights to privacy and security
- Legal protections through licenses like GPL
- Software freedom as social action
Examples: Debian Linux, GNU C Compiler (GCC), Gnome and KDE window managers
For founders: If you align with FOSS values, that alone justifies going open source — no strategic business case required. You should feel confident standing up for these values, even with stakeholders like investors.
The commercial approach
Different mindset: Commercial open source communities see open source as a functional means of developing commercial products, not necessarily social change.
Business focus: Using community-developed components to build potentially even closed-source commercial products.
Smart reasons to go open source
1. Force product excellence through transparency
The principle: Being open source forces your product to be better by subjecting it to public scrutiny.
Kerckhoffs's Principle explained:
- Created by Dutch cryptologist Auguste Kerckhoffs
- Defines encryption systems secure enough for military use
- Core concept: "No security in obscurity"
- System remains secure even when enemies know how it works
HashiCorp case study: Vault's core cryptographic libraries stayed open source to:
- Meet globally accepted security standards
- Leverage community scrutiny from world-class cryptologists
- Validate new encryption mechanisms safely
- Outperform closed-source competitors on security
Broader application: If your market constraints mean open source will force you to hold your product to a higher standard, that's strategic justification.
2. Win developer trust for infrastructure
Market reality: For fundamental infrastructure components, developers often won't consider products without open source elements.
Database example:
- Most successful databases (except Oracle) are open source
- Developers trust what they can inspect
- They'll pay for managed services, but want open underlying technology
- Closed alternatives (Dynamo, Aurora, Spanner) continue losing to Postgres and MySQL
Bottom line: For low-level infrastructure, open source is table stakes for developer consideration.
3. Enable enterprise evaluation (freemium strategy)
Target market: Mid-enterprise companies ($100M-$3B annual revenue) need hands-on product evaluation.
Why it works:
- Decision-makers can run code locally or in their environment
- They can modify, test, and validate solutions
- Provides confidence before standardizing on your technology
Key difference: Closed source or source-available free tiers often fail because they don't allow meaningful modification and customization.
Success factor: "There's a delicate art to doing good open source marketing like this, and people who can do it are worth their weight in gold."
Dangerous motivations that backfire
❌ Lead generation exploitation
The scheme: Using open source repositories to harvest contributor emails for sales outreach.
Why it's toxic:
- Violates social contract with community
- Following a repo ≠ consent to marketing
- Committing to projects ≠ sales lead qualification
- Creates serious reputational risk
- May create legal exposure in some countries
Community perception: Seen as significant transgression across all open source user types.
❌ Free labor expectations
The myth: Open source will generate meaningful community contributions and free development work.
Reality check:
- Most open source projects face maintainer crisis
- Projects typically maintained by small, overworked, underpaid groups
- New projects rarely receive substantial outside contributions without massive coordination effort
- Treating contributors as unpaid employees damages reputation
Current context: Particularly problematic during tech layoffs and industry turbulence when many contributors are already struggling.
Better approach: Hire regular contributors you enjoy working with — HashiCorp found these became some of their most productive employees.
Strategic implementation framework
Decision criteria checklist
Ask yourself:
- Do I have philosophical alignment with FOSS values?
- Will open source force my product to be better?
- Is open source required for developer trust in my market?
- Do I need hands-on evaluation for enterprise sales?
- Can I invest properly in community building?
- Am I prepared for the long-term maintenance costs?
Community investment requirements
Essential commitments:
- Dedicated resources for community management
- Clear communication channels and response protocols
- Proper documentation and onboarding materials
- Transparent roadmap and decision-making processes
- Legal frameworks that protect both company and contributors
Avoiding common pitfalls
Respect boundaries:
- Never harvest emails without explicit consent
- Don't treat contributors as free employees
- Maintain transparent communication about commercial interests
- Honor the social contract with your community
Set realistic expectations:
- Don't count on significant community contributions early on
- Budget for internal maintenance and development
- Plan for community management overhead
- Prepare for public scrutiny of your code and decisions
The bottom line
Open source isn't a growth hack, marketing tactic, or cost-saving measure. Open source is a fundamental strategic choice that affects your entire business model, product development approach, and relationship with the developer community.
The stakes: Get the reasoning right from day one, or risk damaging both your product and reputation in ways that are difficult to recover from.
Next steps for founders:
- Evaluate your specific market constraints and personal values
- Assess your capacity for proper community investment
- Make this decision early in your company's lifecycle
- Treat it as doctrine, not a tactical choice you can easily reverse
Remember: This decision will shape your company culture, hiring strategy, product roadmap, and go-to-market approach for years to come. Invest the time to get it right.
Frequently asked questions
What are the actual costs of building an open source community for startups?
Building an open source community requires significant upfront investment in community management, documentation, support infrastructure, and ongoing maintenance. HashiCorp invested heavily in community building to reach over 450 million downloads by 2023, with dedicated resources for user groups in 60+ countries and 50,000+ community members. Without proper investment, simply open sourcing 'for kicks' appears disingenuous to the community.
How do I know if my infrastructure startup needs to be open source to compete?
For low-level infrastructure components, open source is often table stakes for developer consideration. The most successful databases today (except Oracle) are all open source—Postgres and MySQL continue to dominate despite strong closed alternatives like Dynamo, Aurora, and Spanner. If developers in your market expect to inspect and trust the underlying technology, open source isn't optional.
What's the difference between FOSS and commercial open source for startups?
FOSS (Free and Open Source Software) communities like GNU Foundation treat open source as a moral imperative protecting user rights and freedoms. Commercial open source communities see it as a functional tool for building products. If you align with FOSS values, that alone justifies the decision—no strategic business case needed. Commercial approaches focus on business benefits like community trust and enterprise adoption.
Can I use open source as a freemium strategy for enterprise sales?
Yes, but it requires sophisticated execution. Open source works particularly well for mid-enterprise companies ($100M-$3B revenue) who need hands-on evaluation before purchasing. The key advantage is allowing prospects to modify and customize code during evaluation—something closed source free tiers can't match. Companies that master 'open source marketing' are 'worth their weight in gold'.
What legal risks do I face if I harvest emails from my open source contributors?
Using open source repositories to harvest contributor emails for sales leads creates serious reputational risk and potential legal exposure in some countries. Following a repository or contributing to a project is not consent to be marketed to. This practice violates the social contract with your community and is seen as a significant transgression across all open source user types.
How does Kerckhoffs's Principle apply to my non-security software product?
Kerckhoffs's Principle states 'there is no security in obscurity'—systems should remain secure even when everything except the key is public knowledge. For non-security products, the same logic applies: if your market constraints mean open source will force you to hold your product to a higher standard through public scrutiny, that's strategic justification. HashiCorp used this principle to make Vault's cryptography more secure than closed-source competitors.
Will I actually get meaningful contributions from the open source community?
Probably not initially. The likelihood of receiving meaningful contributions from the community without massive coordination effort is quite low. Most open source projects face a maintainer crisis, with small groups of overworked developers handling most work. However, regular contributors you work well with often become excellent hires—HashiCorp found these became some of their most productive employees.
What happens if I treat open source contributors like unpaid employees?
Treating contributors as unpaid labor by demanding unreasonable timelines creates serious reputational risk, especially during industry layoffs when many contributors are already struggling. This approach exploits the open source community and can damage your company's standing. The better strategy is to hire contributors you enjoy working with rather than expecting free labor.
How do successful companies like HashiCorp monetize open source without alienating the community?
HashiCorp offers core tools as source-available projects while providing enterprise offerings and managed services with both free and paid tiers. They focus on solving organizational challenges at scale through commercial products while keeping community tools accessible. This approach enabled them to grow Vault Enterprise from zero to over $100M ARR while maintaining community trust.
Should I open source my product if I'm getting pressure from investors to stay closed?
The decision requires balancing stakeholder interests, but you should feel comfortable standing up for your values if you believe in open source principles. The decision is complex with many stakeholders, especially investors, but shouldn't be treated as an afterthought. Consider whether open source provides strategic advantages like developer trust, product improvement through transparency, or enterprise evaluation capabilities before making the choice.
What open source license should I choose for my startup?
License choice is arguably the crucial link between your open source project and commercial viability. Permissive licenses (MIT, Apache 2.0) allow broader usage but offer less protection. Copyleft licenses (GPL, AGPL) require derivatives to remain open but may limit commercial adoption. Consider your business model, target market, and long-term strategy—choosing the right license early can prevent painful switches later.
How do I build trust with developers through open source?
Developer trust comes from transparency and community engagement. Establish clear contribution guidelines, adopt a code of conduct early, invest in comprehensive documentation, and maintain responsive communication channels. The key is consistency—developers trust projects that demonstrate long-term commitment to the community and transparent decision-making processes.
What are the best open source monetization models for B2B startups?
The open core model is most popular—offering free community editions while charging for enterprise features. Other proven strategies include professional services (implementation, integration), premium support, training programs, and managed services. Red Hat and GitLab successfully use these models. The key is providing clear value differentiation between free and paid offerings.
How can open source help my startup's SEO and content marketing?
Open source projects generate natural backlinks and developer engagement that boost SEO rankings. Developer documentation, tutorials, and community discussions create valuable content. GitHub stars, contributor activity, and project mentions improve domain authority. Companies like PostHog report significant SEO benefits from their open source strategy, attracting organic traffic from developers searching for solutions.
What are the hidden disadvantages of open source that startups should know?
Beyond the obvious challenges, open source creates support burden expectations from users who may not pay. Quality can be inconsistent without proper governance. There's potential for competitors to fork your project. Security vulnerabilities become public immediately. You may face pressure to accept contributions that don't align with your roadmap. Factor these ongoing costs into your decision.
How do I create contributor guidelines that attract developers without overwhelming them?
Start with basic onboarding clarity—how to clone, install, and run the project. Create simple contribution workflows with clear acceptance criteria. Establish a welcoming code of conduct from day one, regardless of project size. Provide templates for issues and pull requests. The goal is removing friction while maintaining quality standards. Astro's team emphasized having these ready before their first external contributors arrived.
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