Monetizing Open Source with Value-Add Products Instead of Indemnified Distribution
Early stage startup innovating a new go-to-market model based on the open source project, sendmail, the MTA (Mail Transfer Agent) used to build the public internet email infrastructure. Funded by Band of Angels and Morgan Stanley.
Domains
- Open Source
- Developers
- Email Server
- System Administration
Objectives
- Identify target markets, brand and launch company and products, build awareness
- Drive a technical-oriented volume transaction business model
Challenges
- Directed to keep the open source community “pure” and to not use their contact information for marketing programs
- No one had done this before, the current “best practice” for monetizing an open source community was the Linux companies offering indemnified distributions
- The dotcom era had created a noisy market with valuations being driven by advertising, press releases and buzz
Process
- Analyzed domains of open source downloads to model commercial markets using open source sendmail
- Created large presence at open source, networking, internet and other technical conferences where target market congregated to engage and learn from attendees
Findings
- Telecommunications/ISPs were using sendmail and had potential for large software and services deals
- System administers at enterprises managing email communications at the firewall had potential for low price point, volume deals
Solutions
- Created community site to engage and establish credibility with open source user community
- Engaged in large-scale outbound marketing communications campaigns encompassing PR, Advertising, events and email marketing to drive potential customers to website and inside sides sales team
Results
- Drove 80% quarter-to-quarter revenue growth achieving $15M in revenue in less than three years through 1,000s of transactions a quarter
- Lead machine produced 500+ leads a week with some campaigns generating a 3% response rate
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