Business models
The open core business model
The open core business model: the basic product is free and open source, and companies pay for what they need around it. Developers adopt the free version, and companies pay for support, hosting or extra features.
How it makes money
Developers adopt the free version, and companies pay for support, hosting or extra features. The free product is your marketing.
Real examples
- GitLab has a free core and paid plans.
- Red Hat built its business on support for open-source software.
The numbers to watch
- Active users of the free product
- Share of companies that pay
- Revenue per paying company
Who it fits
Developer tools and infrastructure.
What goes wrong
A bigger company offers your free product as a service, or the community turns on you when you change the terms.
Try it this week
Decide now what stays free forever. Changing it later causes trouble.
Then give it a time: one block of 90 minutes this week, in your calendar. Our playbooks have the next steps for finding your first customers.
Questions
What is an example of the open core model?
GitLab has a free core and paid plans.
What is the biggest risk with the open core model?
A bigger company offers your free product as a service, or the community turns on you when you change the terms..
Plan your first week of building it
Free forever for planning, XP, streaks and the Arena. Reserve your @name now.