Balancing Community and Monetization in Open Source With Birthe Lindenthal  ## Metadata - Author: [[The Business of Open Source]] - Full Title: Balancing Community and Monetization in Open Source With Birthe Lindenthal - Category: #podcasts - URL: https://share.snipd.com/episode/01dd3443-ca3e-4db5-8581-758507d66931 ## Document Notes ## Highlights - **From Custom Dev to Open Source** - OpenProject started as a custom development project that evolved into an open source project management tool. - Clients wanted to use the tool, which led to forking and building OpenProject as its own open source product. Transcript: Speaker 1 Yeah, as you said, I'm one of the co-founders of Open Project and Head of Marketing and Communications. Actually, Open Project is not a real typical startup, so it has a quite a long journey. So I did a lot of roles in this company during all the time. And yeah, currently, as I said, responsible for all marketing and communication topics, communicating to the community as well. All is Open Project. The product itself, we founded in 2015, but the company itself, it's much older. We started, actually, with custom development. So there wasn't just like one product vision we had as an open source product we wanted to build, but it more evolved over time. So we started to do a lot of custom development for different clients here in Germany. And we always needed a project management system. So we started with an open source project management system to steer our projects. And this is actually how Open Project started initiated because the clients then also wanted to work with this project management system. Yeah, so we actually forked and then built our own open source project and continued with it. ([Time 0:01:23](https://share.snipd.com/snip/6ab9bb8f-d023-4bf6-895c-51ef96f05494)) - **Transition from Custom Work to Revenue** - Finance your open source product initially by custom development projects aligned with product vision. - Slowly reduce custom work as you achieve product-market fit and move to recurring revenue. Transcript: Speaker 1 So it evolves over time. Since we are not a VC funded, so we bootstrapped the company from the beginning. And so we always did custom developments in the past for the clients. And yeah, basically, yeah, earned the money we then spend on the product and slowly started to build a business model with recurring revenue. So this is like how it all got started. So there wasn't one point we decided not to do custom development anymore, but more or less. Yeah, finance the product with the custom development. And then we started to do less custom development over time until we had now like a product market fit and we now earn our money with recurring revenue. How long did that take? 10 years. And we still do some custom developments if we like, but not only just together with the product. So if it fits a product vision, we also still do custom development, but it's not like more the general development. ([Time 0:02:55](https://share.snipd.com/snip/b96c5e61-cf17-4791-8f2d-f625b7bc6a8a)) - **Bootstrapping vs. VC Funding** - Bootstrapping offers the freedom to follow your own vision but can make the journey long and harder. - VC funding may accelerate growth and product focus but changes the dynamics and pressures. Transcript: Speaker 1 That? It was not a conscious decision, but we really enjoy the freedom we have right now to just go our own path and follow our own vision and build the product we think that really fits the market. And the question would be actually if I would do it different with today's knowledge. And maybe I would, yeah, because it was really a long and hard journey. And I think if you take VC funding, then you can just start to focus on the vision and be much clearer and maybe much straighter from the beginning, I would say. So it, yeah, it was a little bit back and forth and trying out things. Speaker 2 And yeah, I think that's interesting, because as you were saying that I was also thinking, I wonder, though, if you were able to get where you are now, because you went slowly, like, would The acceleration necessarily have gotten you to where you are now? Speaker 1 It's always hard to say where we would be, if we had more funding from the beginning. ([Time 0:04:21](https://share.snipd.com/snip/0887b0bf-2f5b-421a-9eff-067ebf725158)) - **Open Source Transparency Advantage** - Being open source is highly valued because it brings transparency and enables direct interaction with development. - Customers appreciate visibility into code, roadmap, and ability to contribute feedback and ideas. Transcript: Speaker 2 How do you see that as contributing to your business? Let's say, like, what do your customers value about this open source foundation? Speaker 1 It's definitely a big benefit. As I said, like, the market of project management, it's huge. And there are really big competitors out there. And the fact that we're open source is really valued by our customers. So people, customers, users who work with our software are really looking for an open source solution. So, we do have big clients, real big corporates here who have developed themselves just contributing to the product. And they really value the transparency we have. Like, everything is public, not only the source code, but also like all the development roadmap, our epics, our features and bugs. Everybody can comment on it, can share ideas. And I think that's really valued by the users and customers. ([Time 0:06:16](https://share.snipd.com/snip/3b22bc92-5d6b-48df-8027-4bfd48c377c8)) - **Community-Funded Features Example** - Customers collaboratively funded an integration with NextCloud instead of building document sharing in-house. - This exemplifies community and customer collaboration around mutually beneficial features. Transcript: Speaker 1 So they come together to get to contribute to the project together. So for example, we just recently built an integration with NextCloud, which is the content collaboration platform. We always had a leg for document sharing and didn't want to build this on our own, because there are great solutions out there. And we had many users asking for that. So they just collaborated now and funded this new integration. ([Time 0:08:05](https://share.snipd.com/snip/36124223-9545-4669-aa2a-1bc5c38be07f)) - **Monetization Path from On-Prem to Cloud** - Start monetizing with maintenance and support for large on-prem installations. - Then expand to managed cloud hosting for smaller organizations lacking technical resources. Transcript: Speaker 1 Like, how, what did you try first and how did you make that decision? We actually started with quite only a few huge on-prem installations where we did maintenance and support. So these initiated from the fact that we did a lot of custom development in the past. And organizations wanted to work with this project management software also after the project was finished. And we then just kind of left the project management system with them. And we did the maintenance support for this software. And so we had just very few big installations out there with a lot of specific integrations and plug-ins. So huge applications running. And we took care of it. And then we built a cloud product. So we needed to make the application available for multi-tenancies. ([Time 0:08:46](https://share.snipd.com/snip/13f10a2f-de8d-48fb-97ee-e7adaa690960)) - **User Base and Revenue Split** - Majority of users rely on the free community version with no business relation. - Revenue mostly comes from on-prem enterprise support contracts serving privacy-conscious organizations. - Cloud version targets smaller organizations with less sensitive data needs. Transcript: Speaker 1 And actually, I'd also be curious, you know, what percentage of your revenue and what percentage of your customers are in each? Well, the biggest part of the software is still the free-of-charge community version. So we have an estimation of about 20 million downloads and installations of the software out there. We don't have any business relations with it. So we don't track the customers. We don't know who is using it. That's our initiation. So we really want to have the customers do what they want with the software on their own and really benefit from the fact that it's open source. And they can do whatever they want. They don't need to be in any business relationship with us. Then the bigger part actually is the on-prem version. So this is basically on top of the free-of-charge community installation. We have a supported enterprise on-premises version where we then also offer like onboarding trainings, consultancy, installation support, basically like a support contract with Us. And with it, there come a few additional enterprise add-ons which we offer together in this enterprise plan. And there I would say it's about two-thirds of the revenue coming from. So the bigger part is actually the on-prem installations. And that's also due to the fact that people who decide for open project, they have a big awareness for transparency, privacy, security, and also data sovereignty. So they don't want to give away their data to any US companies or any cloud providers. So they all do everything in-house and they install and run the software themselves and they just have a support contract with us. So that's the biggest part and also the rapidly growing part. And of course, it's less competition. So cloud products for project management, there are tons of providers out there. And people who choose our cloud product, they are probably less data, privacy sensitive, and just want to have a quick solution. And there's quick and easy solution where they don't have a lot of maintenance efforts, etc. And of course, there's a lot of competition out there even in Europe. Many providers who also focus on data privacy and so that's the smaller part. It's more the smaller organizations who then hook the cloud version. And I would say here, the fact that it's open source, it's not that important compared to the on-prem solution. ([Time 0:10:36](https://share.snipd.com/snip/e0384727-3559-4609-aa70-46e394147282)) - **Why Offer Cloud Hosting?** - Offering a cloud hosted version ensures accessibility for users lacking technical staff. - It provides a quick, easy solution without the need to self-host software. Transcript: Speaker 1 Because I think we still wanted to offer the product for people who don't have the technical background in their company, who are not able to just run the software themselves. They don't have the people or don't have the knowledge about it. So we just wanted to have a quick and easy solution for the organizations that just don't want to have the hassle with running the software themselves. And still, there are also other providers out who host open project. So organizations are not bound to do the hosting with us, ([Time 0:13:19](https://share.snipd.com/snip/294a91fa-cfc1-44e6-ab61-85256cbb8cb1)) - **Customer Profile: Privacy-Conscious IT** - Buyers are mostly technical IT professionals sensitive to privacy and data sovereignty. - Customers come from diverse industries globally, especially public sector and administrations. Transcript: Speaker 2 So who is your customer and who is your user? Our customers and users are also, they also have a mostly technical background. Speaker 1 So organizations who are happy with open project, they're probably the buyer persona is more in the technical IT department, like system administrators or technical project managers. And they are mostly very sensitive to data privacy security. And as I said, data sovereignty, so really focusing on that topic, so privacy conscious organizations. And this is a lot of public administries and the public sector in Europe, but also worldwide. So it's really quite of industry overarching. So we're not focusing on any industry because it's just like industries who manage multiple projects and parallels or multi-project organizations, and definitely all around the World. So we have customers from all around the world. And yeah, but one thing that combines these customers is always this focus on data privacy. ([Time 0:14:12](https://share.snipd.com/snip/2bbbd6cc-cb85-4169-aaba-c11ab0e45ccf)) - **Pricing Experimentation Importance** - Being hesitant to experiment with pricing limited business growth. - Pricing adjustments improved customer clarity and revenue consistency over time. Transcript: Speaker 2 Being lightweight project management software. Tell me a little bit more about some things that you think of, like the most interesting mistakes that you've made. And I say interesting for a reason, not necessarily the biggest mistakes, because you can make a mistake and it can be very, you know, a very, a very dumb or very uninteresting. But what are some mistakes you think of as interesting? We had our learnings with regard to the pricing. So it took some time to find the right pricing. Speaker 1 And still, we're quite hesitant to change prices. So probably a mistake I would point out is that we were too hesitant just experimenting with pricing. ([Time 0:16:41](https://share.snipd.com/snip/495b732b-18fe-4432-88dc-ae5d01808315)) - **Unified Branding Strategy** - Branding unified under one open source product to emphasize it as a single solution. - Enterprise paid plans add services but remain part of the same product. Transcript: Speaker 2 You don't. And I'm curious if that was again, was it a conscious decision or did it just sort of end up like that? Speaker 1 And if it was a conscious decision, you know, why? It also evolves over time. So we started also when the company itself had a different name than the product. And then we rebranded actually the company to the name of the product open project. So just to make it easier not to have this transfer, the company itself is called this, but the product itself is called that. And we also started actually with not with a different product names for the community and the paid version or the, I mean, both is open source, but like the paid plans, but we had different Colors and also different kind of different branding. And at some point I just decided that it's not necessarily to have that. So that people understand that there's a free of charge community version. And then if they book the enterprise plan, that's still the open source project itself, the product. But they just book additional services. So there was never really a need to have these different brandings actually for us. This is something that I know people struggle with. So what made you come to the conclusion that wasn't necessary? I think because we understand open project itself just as one product. So it's for us, it's just one open source product. And the enterprise version, that's just in addition to the main product. So we don't see two different products, one open source version and one paid version, because the paid version is also open source. ([Time 0:19:04](https://share.snipd.com/snip/7012774c-c67a-49af-9815-c06f55ada59a)) - **From Business to Open Source Passion** - Birthe's non-engineering background led her to open source through licensing and collaboration. - She values public money public code and wide community benefit from shared software. Transcript: Speaker 2 Well, I actually have a business background and I did a lot of consultancy for the clients who were where we did individual development projects. Speaker 1 And as I said, then it came with a fact that we used this open source software for the project management itself. And there, somehow I got into it and started to work out all the different aspects about the licensing and about our contribute, license agreements, etc. So I really felt that I was fascinated by the topic that people are collaborating together and working on one bigger thing and really felt the advantages of it. It's something that's developed and a lot of organizations benefit from it. So there's FSE like the free software foundation in Europe. They have this public money public code. And that's really something like some of the values I share that's something that is developed from public money that like the wider community will benefit from it. ([Time 0:22:52](https://share.snipd.com/snip/f0ad7187-64c8-4aeb-afa4-c0e146079315)) - **Dual Marketing Focus** - Marketing balances community engagement with customer acquisition funnels. - Transparent communication with the community generates valuable feedback and loyalty. Transcript: Speaker 1 Marketing, we always have these two different target groups, I'd say, the community. And we don't really want to convert them to buying customers, but we just accept that they are using the free product and we want to use this. We want them to use a free product, but nevertheless, we want to stay in touch and we want to we want them involve the community. And that's from my point of view, a really big benefit just to interact with them and get feedback, get the ideas. And we really have a great communication with the community. So they write emails, they thank us, they thank the team for the product. And so we just want to inform them from a marketing perspective about our roadmap, about new developments, about the features that are on the roadmap that are coming up. I want to ask for feedback. So this is like one big part, it's just all the whole community management, I'd say. And then of course, there is just like the typical channel, the funnel, where we want to attract people coming to our website and just starting a free trial with us and then either installing The software themselves or just subscribe to our cloud service. And that's just for just just as for any other product, like create awareness and then trying to convince with a good product in the end so that people subscribe and stick with us and are Happy. ([Time 0:25:01](https://share.snipd.com/snip/57835afa-dcbf-4649-990f-d529a3d0d5b1)) - **Website and Organic Growth Focus** - Prioritize your website with well-maintained, content-rich pages. - Use organic growth through SEO and content sharing rather than paid ads. Transcript: Speaker 1 Most important thing is our website and we put a lot of effort into our website. So we had built a aesthetic website on our own. So we always want to have a full control here and also all maintained and repositories and we just do pull requests. If we want to change the website, most of the effort actually goes into the website. So I'm building really relevant landing pages offering really good documentation as well. And so having content, valid content strategy, so publishing, blog post and distributing then the content via our channels like social media and newsletters. But yeah, most of it actually is online marketing and we just do really organic growth. So we don't have any advertising on search engines. ([Time 0:28:02](https://share.snipd.com/snip/aacc5352-7d67-4880-a2c9-deada4867970)) - **Glossary Project Unites Teams** - Creating a company-wide glossary revealed inconsistent terminology. - Harmonized terms improved marketing, development, product features, and support communication. Transcript: Speaker 1 Yeah, we just had an example. So we just come back from, we had two weeks, passion time, we call it. So that's a time where all of the employees working on the product are basically allowed to work on projects closer to their heart. So they choose a project they want to work on for two weeks and a small team picked a glossary. And this was really, I mean, it sounds really straightforward and so easy, but it turned out to be such a topic which really touches a lot of disciplines. And we realized that even within the company, there were so much terminology that we use differently. And not only was we got to the product, but with regard to project management and also like modules in the product and things we do. So it turned out like to be a project which touched with which touched not only marketing, but also the dev team and also customer support and the product team, because they started to Specify new features. And then it was a complete different name for it than we then finally communicated the marketing. So we now have a harmonized terminology we use throughout the whole company. And then also for let's say within the application in the documentation, in all our communication, which goes out. ([Time 0:29:27](https://share.snipd.com/snip/b346776a-c3f2-4f24-a526-ad5dc002b23d)) - **Prioritize Product-Market Fit** - Focus deeply on finding product-market fit through research and customer conversations. - Adjust and stop unproductive efforts to shape your product around real needs. Transcript: Speaker 1 Yeah, I think for us, we had difficulty finding product market fit. We tried a lot of things. We also tried to focus on just certain industries, etc. So this is really one advice I would give really focusing on the product market fit, like really digging into it and not just keep on going, but more doing more research and talking to Customers and really finding out what's it that you want to build. So we really did a lot of things. We stopped doing in the past. So I think that really turns out to be quite important just to shape your product that really fits to your ([Time 0:31:21](https://share.snipd.com/snip/b73696be-0ca2-4897-ba78-0a95ed936735))