A New Business Model for Open Source

If you talk to any software engineer about open source, you’ll realize two things:

1. Open source is the backbone of everything
2. There are no good options for funding open source at the moment.
   
   

There are a few ways to build a business around open source. Usually, you’ll see a few different options. You could offer consulting services around building software with that open source package. You can do a hosted version as a product and a self-hosted version that anyone can use. Or you can offer a donation button/accept company sponsors to fund the development.

But all of this usually ends up with a couple of different issues.

Consulting is harder to scale. Donations and sponsorships aren’t reliable. The closest thing I’ve seen work is the hosted vs self-hosted options.

That gives you the opportunity to offer open-source software and scalable product offerings. But that’s got a few issues too. It’s definitely not the easiest thing to do. Finding the balance between product/library can be really tough and you end up splitting time between the business and the software. For someone who isn’t knowledgeable in business, there’s a steep learning curve.

I wanted to make it easier for engineers to build small products that don’t need much in the way of marketing.

And that’s when I developed the Nexus architecture.

The goal of the Nexus is to be a network of humans that computers can operate in. Contrast this to a typical software product, which focuses on the networks of systems and how they interact. When was the last time each of your users ended up in your system diagram?

This is tough to imagine, because a large number of users wouldn’t fit in any consumable diagram.

Because it’s human-centric instead of computer-centric, you can quickly identify what people need and build that for them.

So instead of the normal options, I decided to do something different with this architecture.

Instead of a traditional startup, I’m actually launching open source software from a venture studio model. That way, I can work on identifying and paying people to build things on the architecture. Because it’s one developed with the understanding of human network dynamics, it’s a collaborative architecture that maximizes network effects for the size of the network. So anyone in a given Nexus adds to the value of the Nexus, and any Nexus can contain any number of sub-Nexus.

That means, if I invest in the people who want to build on the architecture, I automatically add value to everything I’m building product-wise. Notice I didn’t say invest in the companies of people, I said invest in the people.

As I identify users and builders of the architecture, I’m investing time and money as I’ve got available and helping people out without taking any sort of ownership stake. That will make it as easy as possible for them to build on the platform, while figuring out what they need to do in their lives to make that investment pay off as much as possible for themselves, without worrying about any of my say in what they do. I don’t want to worry about holding any sort of undue influence simply because I gave them some money. I assume that they will focus on doing what is best for themselves to maximize the value they create on the network.

It functions more as a grant, but in my eyes it’s an investment in the stuff I build, because it will create more data that can be used to identify and launch new products. And because it’s a shared data architecture, everyone will have access to the information according to the rules of the given Nexus.

I can also offer services to people I’m investing in, so they can focus on the things they know well. They might build something and pay me to host it. They might ask for some extra functionality that I can offer as a service.

The amount of data I can generate with some targeted investments of time and money will end up accelerating the growth of the Nexus, I won’t have any need to spend time in governance-type roles as an Investor In The Business™. So I get to minimize my time investment while maximizing the value I can create for the Nexus.

Ideally, it will get to a point where I (or anyone else) can just talk and people will build the bridge to get me (or anyone else)  to the next step, making money on their projects the whole time. It’s a great way for indiehackers to build small functional pieces of the network and get paid to operate them. I’m focusing on very small bits of functionality at low costs, so very limited scope. You can launch a serverless function and do a ton with it, or build a more full-fledged product. I don’t view the visual internet, where you have to view a specific place as the end-state of the internet, so instead of focusing on landing pages or company owned networks, there will just be connections between various people networks.

The first piece of the puzzle is getting My AI Cofounder live with users. I tested a version with a few people to see how they responded, and after getting some great feedback, V1 of the initial Nexus-powered product is going live soon. I have a couple small features to add, but it’s going to be live in the next week.

If you are interested in the source of the product, it’s located here: https://github.com/leo-guinan/nexus-chat

Over the coming weeks, I’ll be releasing a series of tutorials/documentation on the concepts of the Nexus and how the incentives work in the network.

Finally, if you are interested in chatting about this model, here’s my calendar:

https://calendly.com/leo_guinan/intro-to-the-nexus-open-source

I’m still in the process of setting up the venture studio and raising some initial funds to kick off a few expansions to the Nexus, so all I’ve got to invest for now is my time. And that is more valuable than any money I can give you.

Let’s flip the script and make open source as valuable as it deserves to be.