Introduction
Today’s SaaS market is more competitive than ever, making it incredibly hard to find market fit and create a sustainable business.
The goal of this blog post is to make your SaaS more profitable, and one way of achieving that is by creating an open source solution. We’ll explore some advantages, disadvantages, and some success stories around open source.
What is Open Source?
As you already know from our anterior blog post, Everything you need to know about using OSS in your application, open source is the process of transparency, where you make part of your software solution public. This allows others to view your code, edit it, or even use it in their own business. There are three reasons for choosing to open-source your SaaS: support, visibility, and culture.
Why open source your solution?
Support
Support is about any help you can get from outside, usually from individual developers or even companies. Think of this help as the wheels of a car while you remain the engine that got the direction. They assist with bug fixes, feature suggestions, and implementing integrations with third-party solutions. However, you will still be in charge of implementing new features, planning releases, and so on. The advantage here is that you decentralize the implementation to a larger public, which can help you navigate faster through releases and find bugs faster.
Visibility
Visibility is another advantage for open source solutions. It acts like a community garden and it can increase the conversion from lead to customer visibility, boosting your SaaS presence in online blogs, GitHub discussions, and open source events, expanding your reach to a new audience that you might not find otherwise. It also helps with lead conversion as potential customers are more inclined to buy something that they have access to.
Culture
If you look at how companies operated 20, 30 years ago – they were all about the product. The buyer didn’t care where did it come from, who is behind the product. But nowadays, people care about transparency, adding value to the world, sustainability – and open source solutions check all of these. It gives direction in your company, attract top talent and increases the overall productivity in your company.
And that’s why some companies choose to open source their SaaS. They take advantage of Support, Visibility and Culture.
The dark side of the OSS
But why not all companies use this approach if it’s so great? Why some companies will still not take advantage of it? Some of the reasons are:
Security – it’s like a double edge sword. From one angle, the open-source contributors will help your SaaS identifying and fixing the security breaches. On the other hand, having access to the code, adversaries can exploit some vulnerabilities.
Then there are Competitors – open-sourcing part of your code will allow your competitors to have an advantage. But still, if they are copying you, they will always be one step before you.
As we had the advance of culture, we also get the problem with “no way back” direction. What I mean by that? A company that chose to be a transparent and open company, cannot close source their solutions because the customer will backfire. So culture in itself a great thing, but the downside is that you cannot go back afterwards.
Differentiating your SaaS in a competitive market
Out of 100 new software products, 90 of them are replicas of existing ones, another blog platform, CRM, or social media SaaS. So how can you differentiate and attract new customers? During our research, we found a Reddit post that resonated with this idea. “Given a choice between two offerings with the same features and similar pricing, but one of them is open source and the other one isn’t, I’ll pick the open source one.” So if you’re building a SaaS that already exists and it is in a competitive market, a great advantage you can take might be to open source it.
From a client discussion, who wanted to launch their new software product, the idea of using an open source solution arose. They loved the idea, saying that in case they increase the price drastically or if any problem arises, we have the open source that we can work with. This transparency gives your leads the trust they need to buy your solution.
Examples of successful open source solutions
Let’s take some examples. Supabase is a free alternative to Firebase and they’ve managed to stand out by being open source. Call.com is yet another one. They are an open source appointment scheduler and they are an alternative to Calendly. RuskDesk is a remote desktop connection tool and they are an alternative to the paid version called TeamViewer. All these solutions came after closed ones and managed to gain market just by being open source and all of them are successful.
Recommendation
Our recommendation is to take advantage of open sourcing your SaaS if you don’t have a strong differential over your competition. Remember, this is not a zero-sum game. You’ll make money from your customers while also helping people who just want to use your open source solution, and those might eventually become your customers. It’s a win-win situation.
But what if you want to create an open source SaaS from scratch? You can take advantage of other open source solutions to achieve a faster product-market fit. Check out this blog post to find out more.
Conclusion
In conclusion, open sourcing your SaaS can be a powerful strategy to stand out in a crowded market, drive innovation, and build trust with potential customers.
By embracing transparency and community collaboration, you not only enhance your product but also create a vibrant ecosystem that can support and amplify your efforts. Whether you’re looking to leverage external support, increase visibility, or differentiate your offering, open source provides a pathway to achieve these goals.
The journey of open sourcing is not just about sharing code—it’s about fostering a culture of openness and continuous improvement. As you consider this approach, weigh the benefits and challenges, and explore how it can align with your business objectives.
So, take the leap, harness the power of community, and watch your SaaS thrive in ways you might not have imagined. For more insights and detailed strategies, continue exploring our resources.