Opensourcing your core, as a strategy

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Open-sourcing your core is such a powerful move.

Years ago when Reddit was getting way too much competition all around – Digg was reinventing, Stack overflow was trying to build something similar etc – they did a radical thing and open sourced their code base.

It sounds like a dumb strategy, but is a brilliant way to stagnate the competition in the market. For one, for a short period you spawn 10x more copycats, and everyone starts verticals that they have a interest over, and have social influence in – but they are teaching the audience how to use your tool. Suddenly all those guys who are attempting to capture the same market with new UIs or a different take are fighting an uphill battle.

Give it a year or two, and when the new spawns die out, the newly created audience, finds its way back to you – for one simple reason, familiarity.

Tesla is playing that same card. Commoditizing the stack means, you kill differentiation very quickly (you realize if you want to “borrow” one part of the technology stack, there is a dependence on the other and so-on and so-forth) and he who built the stack can command leadership for a long time to come.

The lethargy to reinvent the stack is what will kill most competitors who even want to attempt disrupting that play.

PS: You need to lead in atleast one vertical / niche before you do this, or don’t be surprised if someone takes your own code and beats you at it. That’d be ouch!

 
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One Response to “Opensourcing your core, as a strategy”

  1. Mitesh Sanghvi

    What an explanation! I’m sure everyone will learn a couple of things from these examples. Thanks for putting this online and keep sharing :)

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