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How Open Source Drives Down Startup Costs
prostoalex writes "Reuters Plugged In article (usually syndicated to your local paper's Technology section) talks about the real impact of open source in the technology world -- cutting down startup costs for other developers. New ventures are coming out, where the startup costs range in five-digit numbers, not seven-digit figures, where venture capital financing would be required. The article talks about Project for Open Source Media, Blogger.com, Odeo and Asterisk telephone system."
of course it does. Free = lower cost than money >.>
Show this to your friends and family that don't know what a real hacker is
I have been involved in several early-stage ventures since the bust and completely agree with the article. With open source software and equipment from ebay, $50k goes a very long way.
Actually making money with your product is still as hard as ever, but the financial risk associated with technology ventures has been greatly reduced.
Is that open-source usually works well with cheap commodity machines, like the ubiquitous PC.
True story: I once did an interview with a very interesting start-up, who designed custom chips for high-speed routers.
During that interview, one of the founders of the company mentioned they were moving all their engineers from Sun machines to 4 CPUs Intel machines running Linux.
He said Linux was already good enough to do 90% of the job, for less than 10% of the cost of a Sun machine. The move, of course, saved '000s of dollars for the company.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Except of course, the opportunity cost of your time. I am working on two different business plans at this moment that have NO startup costs because of open source software. Granted, they are both development projects, however they are both quite viable businesses, and all they require is the spare time of a few dedicated developers after they get home from their "Real" jobs.
Now that a useful machine is less than a thousand dollars, it seems much harder to get training, conferences or other ancillary spending approved.
Just as long as your business isn't based upon "IP".
Yes, best to stick with TCP and UDP.
It is extremely rare that another protocol at that level proves to be successful in the long run.
When information is power, privacy is freedom.
If you can get a company going for five figures, you have my respect. I am trying to get a startup going and after doing alot of analysis, the cheapest I think I can do it is for just over 7. Each business if different but getting one running for 90K is just about impossible. That won't even cover two people for six months. I guess you would need a product already written and a customer already signed up to even think about this. But FOSS does make running a software business alot cheaper. If you have five developers, it would save probably 5K a year at least and that is assuming you don't need anything special that can be replaced with a FOSS alternative. Good luck.
"Those that start by burning books, will end by burning men."
One thing I've learned over the years is that when you start any type of business you can't just go out and get desks, chairs and other equipment you'll never use if you aren't profitable.
It's almost always a good idea to start a business on a shoestring. Most businesses who fail before they start do so because they spent all of their capital on things you don't need or things you can rent or borrow.
Open source makes sense in this repect. Instead of starting with MS SQL server for example, start with PostgreSQL or your preferred free alternative. Migrate if you must later; but why spend top dollar on something that may never get paid for?
Get your Unix fortune now!
If you think of Google, their infrastructure runs on top of Linux on cheap commodity hardware. How much would it cost them to do what they do if they were forced to run on proprietary hardware and software? For example Sun on HP in 80s or early 90s? Not to mention how much Windows server licenses they would have needed if they went that route.
Another instance is Yahoo. They use a hodge podge of languages and databases for various parts of their online empire. There seems to be a trend towards open source solutions laterly, for example PHP and MySQL.
Yes, open source does save a lot. Not only now, but ever since the GNU C compiler system came out.
2bits.com, Inc: Drupal, WordPress, and LAMP performance tuning.
The expensive or difficult thing, item #0 is the IDEA, the thing that makes the startup actually worth something...
Phaw. Ideas are cheap. There are a million of them, and a good, healthy percentage of them can be quite profitable.
It's the combination of idea, product delivery, legal stability, financial competence, and (most especially) marketing that makes a startup fly.
I remember reading a while back about the "card table" test. The idea goes something like this:
When looking at a startup to invest in, visit their main offices. If they have nice, leather seats and elaborate furniture, take your investment capital elsewhere. They aren't prioritizing their investments on delivery.
On the other hand, if they are using cheap, Costco furniture and/or card tables, they are putting their money where it matters, and are much more likely to succeed.
I have no problem with your religion until you decide it's reason to deprive others of the truth.
The startup costs are one thing; but time-to-market is another huge factor. And what the article missed was the time-to-market factor.
I've done a number of successful embedded projects, and you just can't beat the time-to-market involved with Open Source. I can beat any closed source project hands down if you're talking about new hardware.
What I commonly see is that something unforeseen will arise. With commercial closed-source solutions, I'd be stuck waiting on the Vendor to provide a solution. Often that same solution either already exists, or is easy to implement, in an Open Source implementation.
Recently I saw this on a new motherboard. The ROM BIOS guys (at the mobo company, and at the well-known ROM BIOS company) had lots of problems when we were bringing up new hardware. So we just grabbed LinuxBIOS, and we could diagnose the problem quicker than they could. But I've seen this theme time and time again.
When someone tries to recruit me, I write them off now if they are using something like VxWorks. I really view it as a red flag that they don't know what they are doing.
The bottom line is that I need solutions, not problems. And Open Source either solves it immediately, or allows me to solve it faster than Closed Source. That's why Open Source products are now becoming prevalent.
Closed source software tends to get the "crown jewel" treatment. It starts of with a high value - often being a company's strategic advantage. But, because it is isolated and cost a lot to originally develop it tends to stagnate. Pretty soon your cutting-edge best-in-the-world software falls behind and the company hurts.
Open source software, on the other hand, tends to stay fresher. Because more people are involved, the boundaries are being pushed a lot harder instead of being hampered by internal corporate politics.
Engineering is the art of compromise.
- 1) Programmer willing to work for percentage.
This is one of the biggest challenges. Not everyone can work for no or minimal salary for a year or two, but it's a huge win if you can.Salaries are really expensive. Fully loaded costs (including benefits, etc.) are $10k/month. A few salaries and you'll have burned through all your cash before you know it.
Burn rate is like a ticking clock on your startup. When you hit 0, it's game over, man. Keeping the burn low is key.
right now and open source has saved us untold thousands. We needed a real phone system so that we would have voice mail and "sound" bigger than we were: Asterisk to the rescue. For a couple of $39 cards and an old pc we've got a pbx. Instead of using Oracle or Sql Server we're going with mysql and php. We need to print bar codes. $800 active X library? Nope, a php library I found on the web for zero.
However, I think it really depends on the kind of company you're going to start. In our case, we're developing software for our own use. I can't imagine trying to bundle some of these pieces and sell them. Surely it would work with some things but, imho, no the majority of OSS projects. I don't say this to belittle the efforts of those who have done so much for me. The reason I say it is because the mindset of the vast majority of users runs completely counter to that necessary to effectively utilize much of the open source software available.
Take Asterisk for example. I had to reboot my phone 4 times on Friday to fix various problems. I'm not crying, just pointing out that the first time you tell a user to reboot his/her phone, they are going to look at you like you have 2 heads.
ClarisWorks was developed with a four-figure startup cost, starting in 1989, and became a top-selling product with millions of users. It's true that that success was not achieved until the program was sold to Claris, and additional development resources were added.
But from the point of view of the original developers - myself and Scott Holdaway - our startup costs were very small. We bought two computers, rented a house together, and hacked. Details here:
http://www.swiss.ai.mit.edu/~bob/clarisworks.php
I should add that from my personal point of view, the open source meme has made it much harder to figure out how to make a buck selling software. In the old days it was simple. OK, call me clueless. I gave up and went back to school.