OSBC 2010 - Highlights - Day 2

Day 2 of the 2010 OSBC again had several interesting sessions, including some insightful legal sessions.

A. Maximizing the Value of an Open Source Business

If you are looking for a nuts and bolts "how to" session on building an open source business from the ground up, this is the type of session you need to attend. Benchmark Capital's Rob Beardon made it through only half his presentation on "Tactics and Metrics for Scaling an Open Source Business" because of the volume of audience participation. Beardon, along with assistance from Zack Urlocker (former MySQL VP) and other open source veterans in the audience, sketched the following blueprint:

Guiding Principle: the value of an open source business is directly proportional to the size of the community and the company's ability to influence and monetize it.

Key Areas:

1. Foundation - every open source business must start with the following attributes to be successful:

• Technology - must add value by solving a customer's problem
  
• Community - must attract the best in the field with the promise of innovation and disruption
  
• Business Model - choose between the "owner/builder" (innovation) and packager/distributor (commoditization) models
  

2. Tactics - position for rapid scalability with viral awareness, then generating adoption, THEN sales

3. Metrics - traditional metrics are not relevant. State of the art is to measure web traffic, customer acquisition percentage and lead nurturing tools

A successful open source business will be able to create a "closed loop demand management" workflow that fuels growth. It is important to note that this methodology is not much different that standard "Entrepreneur 101" tactics, but is highly tuned to the particular needs of an open source business with a goal of a liquidation event for its VC vendors.

B. Legal Matters in Open Source
I attended several legal sessions on Day 2 as well. I won't recount all the details of the discussions, but here are some of the most interesting points:

1. GPL Enforcement. Karen Sandler, General Counsel of the Software Freedom Law Center, gave a thorough review of common open source software license incompatibility. Of note was her helpful clarification on the requirements of the GPL (Sec. 3 of v2, Sec. 6 of v3). In particular, she confirmed that the common practice of including only a download link to source code is not enough to satisfy the "written offer" requirement of the GPL. However, she also emphasized that a download link might be enough for all practical purposes as long as it is relatively easy to find the source code. This is true at least for the SFLC, which is more interested in software freedom than litigation. This is likely a relief for many developers that try their best to comply, even when the details often elude them.

2. Best Practices. Virginia Tsai Badenhope of Big Fix provided some great pointers in her session on how to handle open source within an organization. Her comprehensive checklist consisted of 5 categories:

• Inventory and assess usage of open source
• Comply with terms of open source licenses
• Implement an open source policy to whatever degree necessary to meet the business needs
• Update outbound licenses to ensure they reflect the use of open source
• Update inbound licenses to ensure suppliers make proper representations and warranties for open source

The details under each of these categories will vary depending on the company and particular circumstances, but it is critical to have a set of procedures in place to ensure nothing slips through the cracks.

3. Affero GPL. In his session on Open Source Litigation, Catalin Cosovanu from Wilson Sonsini primarily discussed litigation on enforcement of the GPLv2, but audience questions quickly transformed the discussion into the legalities of the Affero GPLv3. For example, the lack of definitive caselaw on the meaning of "distribution" under the traditional v2 means that the more comprehensive notion of "conveyance" under the could trigger more legal claims and lead to more uncertainty, particularly in the Affero network context. The network terms of Affero also make the notion of "corresponding source code" more ambiguous, particularly in a cloud environment. Finally, even simple questions like "where should the written offer appear?" are not as simple in the Affero context.