How to Scale Open Source Software

India’s developer community, currently the second largest globally, is projected to surpass the US by 2027. In 2023, 3.5 million Indian developers joined the GitHub community, bringing the total to 13.2 million. The widespread adoption of open-source technologies among the Indian developer community is notable, with 85% of the country’s internet running on open-source software (OSS). However, the community’s contributions to building such software remain limited. Companies like Postman, Hasura, AppSmith, and Signoz are trailblazers in open-source innovation, and the time is right for entrepreneurs to embrace this model. Despite the potential, a common challenge we have observed among Indian entrepreneurs building OSS products is scaling open-source communities. In this article, we are sharing our learnings from founder conversations that will help entrepreneurs build and scale OSS communities.

Mechanics of open source network effects

Today’s developer tool entrepreneurs recognize the value of cultivating open-source communities around their products. With this approach, they drive product adoption, gather user feedback, and improve their products. Consequently, a new product-led go-to-market strategy has emerged, characterized by the creation and growth of open-source networks. 

An open-source network is characterized by 3 contributors within the network

  1. The project creator is the entity that wants to kickstart an open-source network around a centralized vision. Usually, this is the startup that wants to increase the adoption of its products via an open-source community. The main role of the creator is to write the first lines of code, set an overarching vision for the project, and make efforts to get contributors and users onto the platform. Creators are usually a few in number.
  2. Contributors are developers who add to the codebase of the project and expand its scope and performance. The incentive for them to spend their time and contribute is rarely monetary. Usually, it is the belief in the creator’s vision, the willingness to learn and apply new technologies, and the drive to improve the project for self-usage that drives contributors to improve the codebase. 
  3. Users are individuals who utilize the open-source code in their products according to the scope defined by the creator, which can include both commercial and non-monetary applications. Users are essential in promoting the widespread adoption and application of the open-source project.

To understand the dynamics of an open-source network, let’s examine a minimal viable setup consisting of a creator, a contributor, and a user. These three roles must be mutually beneficial and provide incentives to sustain the network:

  • The creator sets the project vision and mission, which invites the contributor to add to the project codebase. A contributor enhances the codebase, making it more attractive for creators to invite additional contributors and users. 
  • Once the open-source code becomes usable, a user applies it to their products. In return, the contributor benefits from the growing community and the product feedback provided by a user, helping improve the codebase. 
  • A user may also contribute to the project’s reputation by writing reviews, making it easier for creators to attract more contributors and users. Creators might offer personalized support to users to further strengthen the network..

As an open-source network grows and attracts more contributors and users, its potential for success increases. A crucial turning point occurs when super-users join the platform, as they act as both contributors and users. Super-users contribute to the codebase, use it in their products, and improve it, ultimately enhancing the overall value of the open-source repository. Once a substantial number of super-users are involved, the creators can shift their focus from expanding the network to capturing monetary value, by providing personalized support to these superusers.

Strategies for scaling open source networks

We’ll now discuss what are the best practices followed in scaling and launching open source software. There are 4 critical steps involved in scaling an open source network, namely, launching an OSS project, building a community, scaling it, and finally monetizing the product.

Launching an OSS Project

Documentation + Open Source License + Base Code

There’s a lot of effort that has to be put in before you actually launch your open source project. The more prepared you are for the launch, the lower the barriers would be for building your open source community. 

At this step, there is only one entity, that is the creator of the project, within the network. It’s critical to define the project goals and the target audience, similar to what you would do when you build your pitch deck for a startup. This creator’s vision has to be documented as your first entry to the README file, which is the dedicated document for anyone who wants to learn about the project. While the vision is what the project has to look like in a span of several years, there always has to be a starting point, which in this case, would be a functional base code contributed by the creator, that solves for atleast one use case contributing to the overall vision. Given that the code is will be pushed into production, the README file has to be expanded to included the software’s installation instructions and usage examples. 

The creator now has to choose the open-source license and establish community guidelines for the project, to define how the community’s code can be altered, managed and utilized. There are several types of licenses which projects can choose from, depending how they want to use the source code in their projects (derivative code). Several open-source stalwarts, including Apache, Mozilla, and GNU, have launched different versions of these licenses. 

The last step involves choosing  a hosting platform for the code and the documentation, consisting of the README and other file. Github is the most popular hosting platform for open source projects. WIth all this, the creator would now be ready to launch their open-source project.

Building the community

While scaling network effects, starting it is often considered the most difficult step. Given the cold start problem of starting a network, there’s no right answer for how do you do so. Fortunately, for open-source networks, this allows you to be extremely creative in getting your first contributor and users. 

It’s important to create awareness about your project in advance of the official launch date. This involves having an effective and consistent content strategy: blog posts, tutorials, or video demonstrations showing the software’s capabilities and use cases. But just creating content is not enough. It must be directed toward’s the ‘ideal developer profile’ of the project -individuals who possess both interest in the project’s domain and the necessary technical skills to contribute.. E.g. For an open-source LLM for biological modeling, the ideal developer profile would be researchers within biotechnology labs at universities, skilled in bioinformatics. For example, if the project is an open-source Large Language Model (LLM) for biological modeling, the ideal developer profile might be university-based biotechnology researchers with expertise in bioinformatics. 

Open-source events serve as valuable platforms for connecting with skilled and experienced developers in the field. Given the global nature of open-source networks, attending these events can significantly contribute to finding initial collaborators for specific projects. Notable Asia-focused events include Open Source India (OSI), fossAsia, ReactIndia, Angular India, and PyCon India.

Once a suitable number of developers have joined the network, it’s crucial to open it up to end-users. Building a strong reputation on platforms such as ProductHunt, HackerNews, and Reddit can help attract the initial wave of users to the network. By engaging with these communities, you can effectively showcase your open-source project and drive user adoption.

The metric for success in this step becomes achieving the milestone of a 1000 stars on GitHub., which indicates that the community is flourishing with a strong feedback.

Scaling the Community

As the open-source network gains momentum, it’s essential to maintain balance and engagement among contributors and users to prevent potential collapse. Creators must establish clear practices and institutionalize processes to ensure consistency and project identity. Some key steps to achieve this:

  • Hire community managers: Managers will help bring together the growing community of contributors and users, facilitating effective communication and collaboration.
  • Evolve and refine documentation: As the network expands, the documentation should become even clearer, providing comprehensive guidelines for new developers.
  • Optimize creator-developer communication: Creators often use platforms like Slack or Discord to interact with contributors and community managers. These channels enable efficient communication and help resolve doubts quickly.
  • Provide ample resources for newcomers: A successful open-source network should offer enough resources for new developers to get started while maintaining a balanced interaction between creators and community members.

As the center of the network shifts from the creators to the contributors, it is important to create consistent incentive structures for developers. Typically, this involves establishing a mentorship program between experienced developers and new developers. There are certain formal programs like the Google Summer of Code, which empowers experienced developers within an open source community to mentor and share the project’s culture with the next generation of developers joining the community. Other modes of recognizing and appreciating high-performing contributors includes contributor badges, shoutouts on social media, or even leadership roles within the project.

By offering mentorship and recognition, creators can ensure a supportive environment that nurtures growth and attracts talented developers to the open-source network. This helps maintain the network’s long-term success and relevance within the development community.

Monetizing the OSS Project

There are several ways to explore monetization while staying true to the open-source spirit:

  1. Open Core Model involved offer a free, open-source core version. Additional functionalities can be added for a fee. This model applied to both business and consumer end users.
  2. Donations and Sponsorships set up on platforms like Patreon, Open Collective, or GitHub Sponsors help the creators accept donations from individuals and organizations who value your project.
  3. Paid Services such as professional training, consulting, or custom development work related to your software become a source of revenue for these projects. 
  4. Freemium Model provides a limited free version of your software with the option to upgrade to a paid version that removes limitations.

Understanding an open-source project’s monetization strategy involves considering three essential aspects:

  1. Community’s needs and expectations to ensure that the approach doesn’t introduce barriers that may distance the contributors core users. 
  2. Project’s maturity to ensure that its foundation, community engagement, and demonstrated value are at their maximum
  3. Long-term sustainability for development, maintenance, and user support.

Conclusion

Building and scaling open-source networks is a journey that requires strategic planning, dedication, and continuous engagement with your community. By understanding the roles of creators, contributors, and users, you can foster a collaborative environment that enables growth and innovation. To ensure sustained success, create clear practices, incentivize developers, and tailor your monetization strategy to your project’s needs. By leveraging the power of open-source networks and communities, developers can now establish a bottom-up, product led growth strategy for adoption of their products. At Venture Highway, we are big believers in open-source as a catalyst for innovation and global adoption. We look forward to meeting entrepreneurs building such products and utilzing the open-source growth motion to their full potential.

Catalyzing Climate Action: Building a Sustainable Future

A sustained 1.5°C temperature increase from pre-industrial levels, staggering economic losses worth $300B+ in 2021, larger than the GDP of ~80% countries like New Zealand, Portugal, Qatar etc. and the increasing frequency and severity of climate disasters, costing over $1B, underscore the urgent need for proactive measures to mitigate climate risks.

Analysis by the ILO suggests that continued global warming leading to heat stress could result in losses of 2%+ of total working time by 2030, the equivalent of 80 million full-time jobs.

Regulators worldwide are pushing for greater transparency and accountability in environmental reporting, with a focus on carbon accounting and the growing demand for carbon credits to offset environmental impact. Organizations globally are incorporating climate risk as a core tenet of their enterprise risk management framework.

In a world grappling with the escalating impacts of climate change, ClimateTech startups present a promising avenue for driving innovation and sustainability.

As global warming trends continue to accelerate, ClimateTech startups are at the forefront of developing innovative solutions to address climate challenges, offering mitigation strategies, transition pathways, and sustainable technologies to combat climate change and build a more resilient future.

Amidst a competitive landscape, Indian startups have a unique opportunity to carve out a niche in the burgeoning ClimateTech sector. By leveraging local expertise, fostering innovation, and embracing sustainability principles, Indian startups can position themselves as key players in the global fight against climate change.

Through this thesis, we want to share our investment framework on the ClimateTech startups we wish to partner with and we humbly offer our limited perspective of what we believe are important elements to build ClimateTech “enterprises”.

If you are building in ClimateTech and want to brainstorm/fundraise, please reach out to us at reachus@venturehighway.vc

OTPless – Authenticating Digital Users

We invested in OTPless almost a year ago, backing their vision to enable the authentication of digital users. Fast forward 1 year, they have built a full stack authentication platform enabling businesses to seamlessly incorporate multiple authentication workflows in their existing mobile/web applications to authenticate their user’s digital identity (mobile or email). They have expanded beyond India to multiple countries. 

Let’s deep dive to understand the problem statement, solution, and the journey ahead.

Problem Statement

Imagine you’re a B2C gaming platform. You have a new user on your platform trying to sign up. While signing up, the new user faces an OTP challenge (say OTP does not arrive), the user will drop off due to a bad user experience, and you lose the opportunity to convert the lead to a customer. Imagine this happening to 20% of your users landing on your page. Now, that’s a lot!

And this is not limited to just gaming, every company offering Signup/Signin functionality needs to verify a user’s identity every time they log into their app or website. 

A user’s mobile number has become his / her digital identity on the internet in today’s world. Similar to how a person needs a passport (Physical identity) to travel to multiple countries, users need a digital identity (mobile number) to use specific mobile/web applications in the digital world. Also, similar to how immigration is the authentication layer for physical identity, OTP-based verification is the authentication layer for mobile number verification (digital identity)

Authentication of users is a “Must-have” step that companies cannot do away with. However, any friction at this point can lead to losing a lead who has landed on the site or downloaded the app and is present on the home screen. Hence the right balance of authentication and user experience needs to be ensured.

OTPs come with various challenges for businesses & users. These include:

  • Challenges for Business:
    • Broken Outbound SMS – The current SMS infrastructure cannot support rising SMS traffic. On an average, 40% of SMS fail. During peak hours, the success rates are even worse. OTPs are time sensitive and has to reliable.
    • Significant Development Efforts – Need a team to build and monitor consistently given the fast-paced developments in technology.
    • Less Secure – SMS OTPs are relatively easy to hack. Rs. 1,500 Cr lost in 2021 due to OTP Phishing frauds in India alone.
    • High cost of SMS – SMS cost of $120k vs. WhatsApp cost of $40k for 10M authentications.
    • Lower conversion – High friction on Login/Sign-up leads to users dropping off
  • Challenges for users:
    • Remembering multiple passwords: Multiple B2C applications have their unique password requirements.
    • Cumbersome password reset – Many steps in the reset process increases friction.
    • Time-bound sessions – Limited time to enter OTP and delayed receipt of OTPs by users.
    • Additional friction with 2FA – Almost all large platforms & banks require their users to validate their mobile number as an additional factor of authentication, adding an additional step in their onboarding or transaction journey.

While there are many companies like Google, Meta, Twitter, Okta that provide a suite of tools to enable businesses to authenticate their users, they are limited to email-based authorization. 

SMS-based OTPs were first used to authenticate mobile numbers in the 1980s, and since then, no significant shift has been made in this workflow. While efforts have been made to make the flow of OTPs smoother, no new alternative for authenticating mobile numbers has been developed.

OTPless is looking to disrupt this and reimagine the authentication of Mobile Numbers.

Solution & Value Proposition

OTPless started by building a simple ‘WhatsApp Sign-in API’, which could be integrated into a business’s mobile/web app flow as an alternative authentication modality to enable authentication of mobile numbers. It was an authentication protocol to authenticate a user using WhatsApp. 

Factoring in feedback from various customers & users, they have now expanded to become a full-stack identity and access management suite for businesses to provide multiple authentication methods to their end users like Sign in with Google, Facebook, Twitter, Slack, Github, Line, Viber etc. Moreover, the platform offers much-needed functionalities like user management and session management.

The platform is fully customizable, highly scalable and caters to businesses of all sizes, whether they have 10k monthly authentications or 10M. OTPless can be integrated in minutes with your Shopify store, WordPress Site, Android or iOS App. The SDKs/APIs are available for all platforms.

Merchant Onboarding Journey

User Sign-up / Login Flow on OTPless powered Application:

‘Login via WhatsApp’ ensures a seamless experience for end users through:

  • Smooth Sign-up / Login – Two-tap login for users via WhatsApp
  • Removes Re-Authentication – Once a user logs on to any OTPless-powered application once, for any future sign-up / login, the user shall be automatically authenticated without the need to go through the same steps unless the user changes the device.
  • Improved Security – End-to-end encryption of WhatsApp improves security.

OTPless has received a High Degree of Customer Love from its merchants & their users:

  • Across our conversations with Merchants and their end users, the product has been loved, whether it’s their simple onboarding or frictionless experience for their end users.
  • For Users – The product delivers a strong value proposition in terms of high user satisfaction.
  • For Businesses – Ease of integration and exhaustive developer-friendly documentation make integrating OTPless a minute’s job, saving time, effort and cost in development.

Large Market Opportunity

  • Authentication is a large TAM globally – There are 60 bn first-time sign-ups on mobile apps annually across the globe. Repeated logins are 3 – 4X of this. Assuming a cost of $0.01 per authentication (across modalities & geographies), TAM for just Sign-up / Login is $2.4Bn
  • Adjacent use cases provide an opportunity to expand the TAM – Besides Login / Sign-up use cases, multiple use cases are present, which have the potential to add significantly to the TAM like Checkout, payments, workforce authentication, etc.

High Pedigree Founding Team

FounderExperience
Bhavik Koladiya
Exp: Ex-BharatPe Founder (7 Years)
Tanmay Sagar
Exp: Ex-BharatPe founding team, IIT-Delhi (6 Years)
Satyam Nathani
Exp: Ex-BharatPe founding team, IIT-Delhi (6 Years)

Bhavik is a proven founder who has demonstrated his execution ability, having built BharatPe from ground 0 along with his other co-founders. At BharatPe, he scaled the company to a 550+ member team, indicating his ability to drive innovation and attract / retain high talent. He also brings an extensive network of founders / banks / investors / regulators that he built during BharatPe.

Tanmay & Satyam were part of the founding team at BharatPe, where they worked on multiple 0 – 1 initiatives. Tanmay handles all things business, and Satyam handles all things Tech at OTPless.

Traction & Journey Ahead

Within the first year of inception, OTPless has authenticated over 15mn+ users across 4,000+ websites and apps in 15+ countries. With the rapid adoption of this innovative authentication method, OTPless is poised to grow and capture a significant market share in the global authentication industry.

The next phase of growth rests upon 3 key pillars – (i) Expansion to Indian enterprise customers, (ii) expansion to adjacent use cases like payments, and checkouts, and (iii) international expansion – acquiring international customers.