From Dan Guido’s presentation, I went to Marty Roesch’s talk titled, “From NASDAQ to the Garage with Open Source: Sourcefire’s Experience.” Not only is Marty a fantastic speaker, but his experience with open sourcing Snort is the best example I can find answering the question of how a company that embraces sharing code can be successful.
I am constantly asked by investors: “Where is the money with open source/free software?” Instead of my usual retort which used to be, “RedHat”, I’m now going to say, “Sourcefire!” Marty’s open source release of Snort’s code is a great business model and better in the sense that it’s applicable to companies that do not have as much of a service component to generate revenue but who want to produce a product. There is significant value in putting out a box containing your code that’s akin to a plug and play device as opposed to downloading the open version and having to have more of a technical background to fully make use of all of the features.
There is is also value and, as Travis Goodspeed would say, a neighborly interest in sharing your code and hardware designs to spark innovative products that will work with your code and, hopefully, foster something akin to an industry standard if you’re lucky. If not that lucky, you still have a product that a lot of people are using which creates a built-in user base, contribution to bug reports (and, I argue, better security because of this) and a reputation based upon a community that cares about quality code and hardware design.
Later that night at the Source party, I spent at least an hour talking with Marty about other lessons learned about organizing and funding an open source company. One of the most important aspects about which we both agree is the necessity to defensively patent. I know that many in the open source/free software community don’t think that patents are useful and are the antithesis of open/free releases, but if you talk to Marty about how a patent troll almost messed up their IPO, you’ll see how unethical patent attorneys buying up IP at fire sales are part of the problem with the patent system because they inhibit innovation and entrepreneurship. I know of a few companies this happened to and they ended up going out of business as a result of patent trolls. My advice to entrepreneurs with open source/free software: Patent and then license with GPL version 2! Defend yourself against evil trolls.
(Photo is of Travis Goodspeed doing a demo at SOURCE