In an era where many companies use open source as a foundation to win over the developer community, nailing a go-to-market strategy that monetizes a product is important to successfully scale the business.
Our October NY Enterprise Tech Meetup (#NYETM) featured a panel of open-source juggernauts, including Doug Hanna (Former COO at Grafana Labs & Member of Work-Bench’s Next NYC Network), Jared Palmer (VP of Product at Vercel), and Peggy Rayzis (Senior Director of Developer Experience at Apollo GraphQL). They walked through the art of maintaining authenticity in building and selling a product rooted in an open-source and developer-centric ethos, all while driving its evolution to a complementary top-down GTM approach.
Check out our tactical recap below and the full recording here.
Building an open-source project and monetizing it via enterprise sales tends to be an ebb and flow between value creation (providing a free high-quality open-source project to the community, expecting nothing in return) and value capture (making money off of that project or in some other way). However, this GTM path is not linear as an open-source project grows – it depends on the technology, industry, end user, company size and maturity, the current market, and many other factors.
“Developers hate being marketed to.” - Doug Hanna
“That’s why we even have a special industry term for it…‘Developer Relations’ vs. ‘Developer Marketing.’” - Jared Palmer
High-quality projects can establish a bedrock of trust among developers, spreading organically across the ecosystem by word of mouth. However, beyond that, it’s important to be “wildly authentic in sharing a project’s journey” with developers. One method for achieving this is through robust developer education campaigns. Because at the end of the day, even if it’s the best product in the world, its value will remain untapped if developers lack the knowledge to effectively utilize it.
“You can build the best product in the world, but if developers don’t understand how to use it…they won’t.” - Peggy Rayzis
A few examples:
What’s your North Star metric(s)?
In order to effectively gauge the performance and value of an open-source project, it’s critical to implement telemetry to understand how the product is used. By providing users with the choice to engage, it fosters transparency and respect for their preferences, even if they're not yet considering a purchase. However, users should be given the ability to opt out of these settings in order to preserve their trust.
Additionally, our panel consistently emphasized that "active users" serve as the most reliable indicator of success and actual value. While “active users” can be defined in many different ways, being able to capture whether or not users are using the product multiple times a week should be a good indicator of its utility.
They doubled down that while metrics like stars and download count may offer some directional insight, they often fall short in terms of precision and are more akin to superficial metrics.
How do you get feedback?
“We treat feedback as a gift and are relentless in its pursuit.” - Jared Palmer
Open-source communities thrive on reciprocal engagement. The challenge, however, lies in the fact communities tend to be dispersed across various platforms. Though impossible to reach every user, channels such as Slack, Common Room, Orbit, and Discord serve as vital conduits for both support and community interaction. This personalized approach fosters a stronger and more responsive community.
Transitioning to an enterprise sales motion is a tricky and delicate balance - the goal is to uplevel the sales approach without alienating the existing, open-source community.
Preserving the foundational principle of “open and free” is important in maintaining developer trust. Being attentive to user feedback helps navigate the need to start building in areas critical to enterprise needs such as audit logs and security features, which become premium offerings. Notably, Grafana’s most prominent open-source users expressed willingness to invest in additional features, demonstrating the value they perceive in enhanced features.
“Extracting purchase orders from a large company is a very clarifying moment. Failed monetization is worse than no tried monetization.” - Doug Hanna
Starting with a bottoms-up strategy: A bottoms up strategy is the most common open-source monetization GTM practice. Open-source users have the ability to experience all of the product and understand its value, then eventually, they’ll tell their boss to invest in the enterprise-grade product. To nurture these leads, it’s important to take a consultative sales approach where the product remains top of mind to the developer and the sales team can do some discovery without pushing a sale: “Hi, I saw you use our open-source project…can we chat about how you use it or how we can help you?”
Mixing in a top-down strategy: From a sales perspective, the common developer likely won’t be the decision maker or check writer for an enterprise-level product. This is where it’s important to create what Doug calls a “love sandwich,” aka a combination of developer advocates to help power a crisp, traditional enterprise sales motion.
Additionally, one piece of advice our panel agreed upon was to write a FAQ with all the anticipated questions users will have during pricing and tiering changes. Be clear and transparent about what will remain free and what is a paid feature, etc.
If you’re an early-stage enterprise founder or operator — connect with us directly to chat about anything GTM or check out our events page to stay in the loop on all things happening in the Work-Bench community.
