Why Your Startup Should Be Open Source – by Peer.fm (formerly Napster.fm)
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Editor’s Note: CitizenTekk publishes startups and experts in technology. We are featuring Peer.fm (formerly Napster.fm) because the music-streaming service is completely free to use, free to change, and free to redistribute and share. The app was launched under the GNU General Public License v3 as Napster.fm. Shortly after launching, Ryan Lester received a cease and desist from Rhapsody, resulting in the new name “Peer.fm”.
Many organizations have banned the use of GPL software in their codebases; here’s why my roommate, Peer.fm Founder Ryan Lester, chose the opposite approach.
Releasing your software under an open source license will quickly expand your developer team. Immediately after Peer.fm launched, for example, Ryan received multiple pull requests (code contributions) on GitHub.
Rather than staying limited to a small team (perhaps even a single developer), fostering an open source community will open the doors to potentially unlimited contributions from other developers, especially ones who happen to use your software; this type of feedback is thus a great indicator of major pain points your users have with your product. Even among your users who aren’t programmers, the GitHub issues system is an incredibly useful tool for tracking bug reports and feature requests.
Closed source software, by contrast, forces users to blindly trust the team behind it; I bet you can still remember the last time some Web service was “hacked” and one of your passwords was leaked in plain text as a result. The very nature of open source causes the likelihood of such careless practices to become increasingly small as the popularity of your software grows.
Couldn’t a competitor just steal your code? Under the GPL, if a competitor were to use and distribute part of your codebase, they would legally then be required to openly release all of their code under the same license. This offers fairly good protection from competitors with proprietary software whose source code they would never want released.
“Regarding matters of competition, I’m definitely at risk for potential brand dilution and/or project failure in the case that another entity reuses my code and executes more successfully on the business end; that having been said, if another entity were to pour money into development, the GPL would ensure that it would work in my favour as well.” – Ryan Lester, Founder of Peer.fm
One major concern for a new startup considering this route is whether they could be blowing their potential for future acquisition. After all, barring an “acqui-hire” situation, why would a tech giant want to buy your code off you when they can just download it for free on GitHub?
Another point is that, despite the completely open nature of Peer.fm, the application is still protected from major tech companies taking advantage of its code in their products by the GPL – unless they were to open source their own code or acquire ownership of Ryan’s. In either case, his product is guaranteed to live on, in contrast to the majority of startups which shut down post-acquisition.
That said, if Peer.fm were to take off as a community-driven project, a hypothetical acquisition event would force Ryan to sort out which code he could and couldn’t legally sell ownership of.
Another potential tradeoff is that Ryan will be more limited in terms of control and potential strategies (e.g. for monetization), in that if he were to add something like ads, which the community were to perceive as degrading to the quality of the product, then he would be immediately forced to compete with an arbitrary number of forks that each have the aforementioned degrading quality removed. Taking this into account, however, is definitely a powerful internal check against releasing changes which would be detrimental to the community.
Launching a Web startup like Peer.fm as open source has been a pretty unique experiment, one which will be interesting to watch unfold. The benefits definitely seem to have outweighed the tradeoffs, in this case; going GPL should be a very strong consideration as well for other startups in the future. http://peer.fm
As reddit user barkappara has pointed out, while the GPL is appropriate specifically for Peer.fm given that its code is pure client-side, Web startups should strongly consider using the GNU Affero General Public License instead of the vanilla GPL. The AGPL offers broader protections for software which is used over a network, especially Web applications that rely on server-side code.