Fights About Information Flows in Companies Switching to Open Source

I am a big fan of Clay Shirky. He presented “It’s not information overload. It’s filture failure.” at Web 2.0 Expo NY last year – a fabulous speech you should not miss:

http://blip.tv/play/Ac6tV4a8DQ

Shirky’s talk made Matt Asay think about how filture failure applies to Open Source which again made me realize just how true Shirky’s call for a “mental shift” in organizations applies to companies switching from a proprietary to an Open Source business model.

Such companies face a cultural change related to what Shirky calls “the fight about information flows and access to it”. The reason being that “the Internet allows large systems that are freerider-tolerant” in contrast to the offline-world where “small groups defend theirselves against freeriders”. Proprietary companies is what I’d call a “small group” regarding their mentality, no matter how many employees they actually have. Proprietary software vendors constantly strive to defend themselves against freeriders e.g. with patents and non-permissive licenses. Their partner companies benefit from being a partner because they have better access to information provided by the proprietary ISV.

Now think of a proprietary company leaning towards a FOSS business model, opening up their code and consequently also their communications. This means a lot of change, because communicating about Open Source products is essentially about communicating on the Web, where – as Shirky pointed out – large systems can evolve that are freerider-tolerant. And of course every Open Source vendor wants to have a large community. So, suddenly the gates are open and information is supposed to flow much more freely between the former proprietary software vendor and its community, which just as well includes partner companies.

In such a situation, communication tactics of employees and partner companies will have to change dramatically to sustain a successful Open Source business environment.

A Year in Retrospect: InitMarketing in 2008

2008 was an exciting and very successful year.

I officially started my own business in February: InitMarketing, the open source marketing company. Ever since then, the InitMarketing customer base keeps growing. As of today, there are 15 paying customers including open source software vendors and associations, ranging from content management systems, e-shops to Linux distributions, from mega corporations to small start-ups. Some of them are in the FOSS business for several years, others recently started or even open sourced their formerly proprietary product. InitMarketing helped them with marketing strategy definition, community building, public relations, blog coaching, event management, creating product brochures, writing case studies and white papers and much more.

Revenues for 2008 clearly exceeded my expectations. We have been contracted for project-specific work as well as on a retainer basis. A good part of that money went to InitMarketing’s team members who have done an excellent job helping out with their special expertise on customer projects.

I am particularly proud of InitMarketing.tv, because it is first of all a lot of fun to record the video interviews about Open Source marketing. Second, the videos provide real value to those who watch them much in the spirit of Open Source communites where expertise is being shared happily. Furthermore, video recording and editing has turned into a passion and I very much enjoy extending my prosumer skills.

The goals for InitMarketing in 2009 are to double our revenues, but given the world-wide economic downturn, I am clueless if we can make it. Honestly, I wish that those claims about Open Source software doing better during a recession turn out to be true. So far, I don’t have any reasons to not believe that this self-fullilling prophecy will fullfill itself.

There are positive signs: none of our customers face any economic problems yet. Some of them even performed better than projected during the second half of 2008 … but – you know – only the paranoid survive.

Given the overall economic climate and the general bad financial situation of the U.S., I don’t want to be overly optimistic. Nevertheless, the advantages of open source software over proprietary software in times of tight budgets are obvious. The only real problem are completely cut-down budgets…

Anyway, I wish you all a 2009 that can only become better than expected, right?

Stephan Voigt Provides Business Consulting in Germany

My former appreciated boss at Mindquarry started to offer his business know-how as an independent consultant for software companies in Germany: Stephan Voigt was CEO at Mindquarry and I always enjoyed working with him while being the VP Marketing there.

Stephan offers consulting services such as:

  • interim CEO/COO
  • marketing strategy consulting
  • sales concepts and execution
  • investor relations
  • and more

His focus is not on Open Source software only, but of course he has expertise in that area.

All the best for your business, Stephan!

Marketing Microsoft's Open Source Partner Program

Through our Open Source marketing consultancy, Stephe and I are currently in contact with Microsoft evaluating how we might help them with marketing their NXT partner program geared towards Open Source ISVs.

Very recently, Microsoft’s OSS partner program has been heavily criticized by Mary Jo Foley and Matt Asay (in reply, Stephe provides background information). Furthermore, the credo of InitMarketing is: “If you are Open Source, we will help you succeed”. Our corporate mission is to foster the success of Open Source in general.

Our first major concern was: Would an engagement with Microsoft foster the success of Open Source as far as their partner program is concerned? Could InitMarketing live up to its claim?

While Microsoft’s flagship products are not open source software, if InitMarketing helps open source ISVs to optimize their interoperability with Windows through the Microsoft partner program, then this will benefit Open Source vendors, opening up access to new customers and a higher distribution of their OSS products. From that standpoint, I believe InitMarketing can live up to its claim.

Our second major concern was that we might sacrifice InitMarketing’s yet young and innocent reputation as a trustful actor in the Open Source domain. To tackle this problem, we proposed to Microsoft’s Open Source Software Lab and ISV team to make our work highly transparent to the Open Source community.

Microsoft supports us working in this transparent manner.

The benefits of open communication around the NXT program are clear for everyone involved:

  • InitMarketing can establish itself as a neutral facilitator.
  • The Microsoft ISV team can understand better the concerns of the open source community in general and ISVs in particular and gets valuable feedback which helps to improve the NXT program.
  • By having InitMarketing communicate in the Open Source style (= transparently), it raises trust in the NXT program in the broader context of Microsoft messaging.

We feel very comfortable entering this sort of working relationship with Microsoft. We still value your feedback: Would you do Open Source marketing for Microsoft?, asks Stephe – please let him know your comments.

Winning Pragmatists with Open Source Products

The meritocratic style of Open Source communities can irritate those who simply want to make a deal to raise their own productivity (so-called pragmatists). Highly community-driven projects without at least one strong corporate leader provide too many options frustrating especially those pragmatic buyers who are willing to spend good money for the best services.

A community without one ore more strong companies is in danger to alienate pragmatists who don’t want to invest time to become part of that community to later trade merit, but instead want to invest money to benefit immediately from the expertise hidden inside the community. For highly community-driven projects, crossing the chasm also means trading merit for money and building at least one strong corporation to provide the buying experience pragmatists expect (i.e. the whole product).

pragmatists_in_oss

For example, Drupal is still a largely community-driven Open Source CMS project without a strong company taking the place of the cathedral in the bazaar. Where could a potential pragmatic customer turn to if in search for the one and only Drupal service provider with the best expertise, longest and most successful in-market track record and offices around the globe?

In fact, things are changing when it comes to Drupal: Acquia sets out to become for Drupal what MySQL is for MySQL. Chances are good they will succeed, given their team and $7 Million VC financing. This means that Drupal can finally line up with those Open Source competitors who are Open Source CMS vendors providing enterprise-grade services, such as Magnolia, Alfresco, eZ Systems.

Interestingly, Joomla! (formerly known as the CMS called Mambo) has gone the opposite way by cutting off the one malicious corporate head and letting a thousand small heads grow. It remains to be seen if this puts Joomla! into a good position given the long march towards consolidation in the CMS market. Same goes for Plone, now a true democratic community.

Pragmatic customers want to buy the best from the best. They appreciate simple choices and distinct correlations between a product and a company – even if they just want to turn towards that company to check out which other companies provide similar services (e.g. partner companies).

In other words: Pragmatists don’t want to search whom they need to talk to. They need a point of reference, even if it is just for comparison sake. Allow me a pointed remark: A “secret society” of community members or a multitude of small companies scares pragmatists away if that’s the only way how they can get an Open Source product up and running.

Find more Open Source marketing articles in my Wiki.

Starting Open Source Marketing Consultancy

Due to solid demand, I will officially start my own business offering marketing consulting services to Open Source software creators and contributors in February. Clients will be able to choose from a broad range of marketing services, including strategic as well as operational tasks and social media as well as traditional marketing.

The mission is to help companies and organizations behind Open Source projects become more visible and profitable, hence to boost adoption of Open Source. The only criteria is that a client contributes to Open Source software development, which makes up for the following types of potential customers:

  • Creators: Vendors of Open Source products
  • Contributors: Companies offering proprietary software including Open Source components they contribute to
  • Investors: VCs financing an Open Source venture

The consultancy will be able to help with:

  • Defining an Open Source marketing strategy
  • Open Source communications coaching of management
  • Branding and positioning
  • Community building/maintenance
  • Building/maintaining a partner network crediting Open Source contributions
  • Public relations (printed magazines, blogosphere, …)
  • Collaterals (brochures, business cards, …)
  • Events (e.g. (un-)conferences, partner meetings, …)
  • Investor pitches
  • Managing the contents of a client’s Web site
  • Social media: creating product Screencasts, coaching bloggers, …

One could completely outsource all marketing activities to the consultancy or take it in for specific projects or campaigns only.

I’ll be happy to share my experiences in this Weblog with you along the way and I will continue to provide general Open Source marketing know-how distilled from client projects to the public.

I’d also be happy to hear your advice.

Mantras for Entrepreneur's Hygiene

Entrepreneurs are exposed to hubris and heart attack. Below mantras should help to gain back a calm state of mind. Read minimum twice per day (and thanks for raising my page view statistics).

You are not a genius!

Got the feeling that things only get done well if you do them yourself? That only you strive for perfection and others don’t care enough? Relax! First, there are so many chaotic companies out there who make a lot of money. Second, human beings are never perfect, not even you!

Don’t do it for money!

Your VCs scare the hell out of you and you do everything they ask you to do? Stop it! You did not start your business because of money, but because of a vision (make the world a better place or help yourself to afford living in a better place). In the end, it’s you who started it all, it will be your failure or success and that’s just fair.

You don’t own it!

You think you know exactly how your product should look like and you hate when others don’t get it? Let loose! Business success has a lot to do with not being selfish. If your product is a success, the whole world owns it (given a best case scenario). Everyone will buy it (again, best case scenario), because it helps them in their daily life. Listen to potential customers from the early days, because they might want to own your product.

If you take these mantras seriously, you will feel like a sociable genius, soon-to-be rich entrepreneur, and you will be proud of the company you own. Now, read again!

Trust is All You Have

About 6 years ago I quit my studies and started to regularly earn money. I did quite a few different things: from running my own business to being employed, from software development to marketing.

Experiences I’ve made were good and bad, but mostly good, hence I almost always enjoyed what I did. Whenever terrible things happened, I realized that in the end, all you can do is to keep trusting others.

Of course, I became more aware of what can go wrong and I became more picky on whom to trust and also to which extend. But what it all comes down to is that you cannot be happy in your work life if you refuse to trust and instead become skeptical and bitter.

Those who do not trust, they are quite easy to spot: They take all the fame for themselves and blame others. They are extremely nice to their boss and behave ugly to their subordinates. They are always under pressure and make others feel nervous.

Those who don’t trust others, don’t trust themselves and lack confidence in their own and other people’s abilities. This prevents those without trust from achieving successful results.