Open source model for startups - is it possible?

**michael.j2ee** · 11-12-2010 02:32 PM

There is open source development model for software which is quite popular. I am wondering if this idea is applicable for startups?

Imagine there is a web based start up at its early stage which is open for anyone who wants to contribute. Your can contribute into 1) coding/implementation 2) business plan 3) marketing research 4)advertising and promoting 5) infrastructure, etc. Afterward when the company is up and running all participants will get shares based on how much time, energy and resources they invested.

Is it possible?

**mattnelson** · 11-12-2010 11:32 PM

Doesn't what you've described sound like a regular startup to you? Different partners bring different skill sets and varying level of capitals and that is how the ownership of the business accordingly.

Unless you are thinking of involving thousands, in which case it would get ridculously messy.

**akula** · 11-13-2010 12:30 AM

no..we tried doing this years ago
open source startups fail for a lot reasons
read the case study
The Business Experiment: What I Learned About the Limits of Peer Production, Wisdom of Crowds, and Other Web2.0 Philosophies | Business Pundit

**greathermit** · 11-23-2010 02:49 AM

if you looking for alternative businesses, please pm me for details since i am looking for people all over the world to distribute my products

**veikoh** · 11-23-2010 06:21 AM

Open Source Software hasn't made much money (it's something that students can do for their schoolwork) and even destroyed NASDAQ so why you think Open Source Business will?

**SmartCompanySoftware** · 12-17-2010 09:10 AM

Without contracts upfront you will have one hell of a job sorting out the mess of who did what and who contributed what if it was to become successful.

**-Mike-** · 12-17-2010 09:24 PM

I agree, it would be difficult for the main reason, every successful business needs a very clear Vision, Mission Statement and Business plan add all this together and you have a successful marketable brand that provides some kind of value to people. Inviting open source contributors to join in the project will introduce an unclear vision since everyone will be contributing and have their own Vision and Mission in mind. The business starter, or Entrepreneur is the one who needs to create and control the efforts of the staff on the primary Vision and Mission. When an open source group is working within its tasks it will be hard to keep control of that vision without having them working directly for you.

They are in essence all working for themselves on the same project for a payoff at the end, and you should expect tons of bickering over who contributed what and who should get what. It is already difficult in traditional business structures deciding on the payoff, that's why there are no shortage of legal issues and business partners suing each other. By incorporating, hiring your own staff and paying them directly you have full control on which direction to point them in to make sure the Vision and Mission is on task. However I think it would lend itself more to a non-profit type of entity, in the end the group would not introduce conflict since there is no monetary payoff. The next big problem would be how any funds will be re-invested into the company, some may want to take the cash and run making it difficult for the business to continue growing past a one time gig. I do like the idea of converting conventional business over to open source solutions, that is a trend we are seeing nowdays from companies trying to save on IT.

What may work better is creating a website to allow people to bid on a particular task as a group, complete the task, take the payoff and look for the next project or task to work on. For example a website that can successfully bring together coders and customers with a project management system and pay system might work. This would allow coders to join the group for a % cut complete the project and the website divy up the payoff. It would be similar to the sites that allow coders to bid on jobs as individuals, however would allow groups to bid on larger projects individuals may not be able to do on their own. By creating a method for socialization and making it easy for a Group leaders to add or invite those with the right skill set to take on projects they can specialize in. The website can charge a percentage fee of each project total payoff and allow the groups to divy up the rest. I suggest a read though my E-book it gets more in depth with this topic and many others you may find helpful, its well worth the $. Thanks.