Free vs. paid business models: Why and how to build an open source business | Opensource.com

Free vs. paid business models: Why and how to build an open source business

Posted 10 May 2011 by 

ChrisMorse (Red Hat)
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Join us on May 19 for the latest in our Open Your World webcast series, an interview with two business veterans, Toni Schneider and Nicolas Pujol on "Why and How to Build an Open Source Business." This seminar for executives, managers, and scholars interested in further exploring open source business will take viewers from philosophical concepts to a hands-on discussion by practitioners for practitioners on designing and running a winning business.

Toni Schneider is a venture capitalist, serial entrepreneur, and CEO of Automattic, the company behind the #1 open source blogging system WordPress. As of April 2011 wordpress.com ranks within the top 20 websites on the planet, boasts 20 million blogs and counting, and 300 million unique monthly visitors. But perhaps even more astounding is the company’s resource efficiency: the Automattic team sustains this growth with only 85 employees on staff. Headed by Schneider, WordPress and the Automattic network are nothing short of an open source phenomenon.

Nicolas Pujol is an investor, author, and advisor to technology companies. He has lived and worked on three continents and was recently involved for six years in growing MySQL from a $10m startup to a $1B acquisition, making it the second largest open source company at the time. After his departure in 2010, Pujol dedicated himself to research on free vs. paid business models and is the author of The Mind Share Market: The Power of an Alternative Currency, the philosophical and practical reference on the subject.

The webcast will start with general concepts including the history and nature of non-monetary transactions and demonstrate the millennia of practice now found in open source business models. A brief synopsis of MIT experiments on the zero price concept will be followed by the opacity problem of market shares: why analysts and incumbent companies notice the impact of free products far too late and give them, ironically, a free ride. Next, open source managers will learn the two key methods to monetize open source, a perspective on why MySQL won the open source database game, and a method for entrepreneurs to predict the future.

Toni Schneider will then present the necessary incentives for communities and commercial markets and a Yin and Yang theory. Incentives (and disincentives) are particularly important in open source given its reliance on transactions that are more than monetary. It will also be time to reveal why a successful open source business can become more robust in the long term by setting up a foundation. A granular view of the Automattic business model will be followed by lessons learned while taking WordPress from ground zero to the top of the web.

Register now and join us on Thursday, May 19 at 11 a.m. (ET).

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I'm an Account Manager for the Brand Communications + Design team at Red Hat. I also work on exciting projects for opensource.com as the Marketing Manager for email and webcasts. My voice is the one you hear at the beginning of each Open Your World webcast and I'm the one that gets nervous about how many emails we send out to you all. I live and work in Raleigh, NC, but I was born and raised between Boston and Cape Cod in Massachusetts. (Go Red Sox!)

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