The Cambridge Startup Masterclass I gave in late 2011 turned out (for me at least) to be a fun and pleasant experience. I spoke about the Lean Startup and tools that help a Startup stay lean.
It’s a timely topic as during that same week Eric Ries, author of “The Lean Startup”, announced some speaking dates in Cambridge (January 13th) and London (16th). It’ll be a chance for me to hear if I did a fair job of summarising the book!
The Lean Startup concept isn’t a step-by-step rulebook for developing a company or an idea. Yet it seems there’s an order in which tasks should be tackled, and talents become valuable at different times. There is an analogy here with Edward De Bono’s “thinking hats”.
I wanted to devise the smallest number of categories possible to list these talents and skills (which I call Abilities). The premise is that every Lean Startup needs to do all of these but it does not need to do them all at the same time. If you were to analyse any individual Startup and you found they were excessive or deficient in any one category, you could make a reasonable prediction of how that Startup will falter or even fail.
At any stage of a business plan you should be able to profile your venture and assess strengths and weaknesses in these Abilities.
The full presentation is online at http://www.slideshare.net/paulwalsh21/tools-for-startup-wizards-revised but I will summarise it here.
In my view there are 6 Abilities:
Forming is about generating new ideas for features, process improvement or cost reduction, but it is also about forming teams and wider networks. It’s also about forming a company culture – one that will hopefully be desirable and last the course when the company grows. Good research is the ideal companion to good forming.
Transforming is taking those ideas and making things – software programs, chemical compounds, books or whatever. Where software is concerned, it’s best treated as an iterative process and it’s good to keep a model of users at all times in your design thoughts.
Projecting is letting the world know that you have made that thing. It’s about spreading the message to customers, enthusiasts and investors in a way that ensures it will be noticed. Some of them will be interested enough to seek out more information.
Persuading is how you take that initial interest to a level of adoption where they use your software or read your book. If your product has minimal viability, so too has your business model. Knowing where it can be improved takes research.
Collecting is how you get rewarded in return for the value you’ve given them. Bear in mind that Lean Startup disasters are often pricing-related.
Protecting can be about patents and intellectual property, but it is also about making sure your e-commerce server stays up during your peak sales period or avoiding your site being hacked.
In the slides I give examples of how specific tools can help enhance these Abilities.
Some tools fit closely with the Lean concept, others not at all.
Over the last few years I’ve gathered information on literally 100s of software tools and what I found interesting was that they could be readily sorted into one of these 6 categories.
The tool I prefer for sorting is a Mind map, and I created a mind map (using an open source tool called Freemind) which can be found at www.cognidox.com/toolkit. At the time of writing it has hyperlinks to somewhere in the region of 300 tools. I can’t claim that I use all of them, but I have tried to keep the list down to the ones I think are best. The list excludes tools that are constrained in usage (e.g. only run under one OS) and they are all standalone (web browser add-ons typically not included).
Hopefully this will be a useful resource for others – if you are looking for a tool to help with web site SEO, for example, follow the Projecting path of the mind map.
To use it, hold down your mouse to drag the image around the screen, and left-click on any node to expand or contract it. Clicking on any link will open a new tab or window onto a web site for that tool. In most cases you can download or register for free or a small fee, so the pricing is Startup-friendly. When you are finished browsing the mind map tool, just close the window.
The intention is to add new tools as they become known, and also to capture more of my notes about the value in each tool. But that’s for another day.
As an aside, this is an example of content (a Freemind .mm file) that is managed using CogniDox. When I add items and up-issue the version there, it is automatically published to our website (the document entitlement rights are set to public). Freemind is an open source tool. Our website is managed using open-sourced Joomla, and extensions are available to display Freemind maps in a Joomla article (http://www.waltercedric.com/old/downloads/joomla/851-freemind.html). I mention this as an example of the type of “virtuous circle” Startups should be looking for in tools. This is a powerful way to help me with Projecting, but the tools involved cost us time rather than money.
When I was asked to teach a Cambridge Startup Masterclass the first obstacle was to choose a topic. In the end I opted to talk about the Lean Startup and the tools that would help a Startup stay lean.
That’s the first challenge: What is a Lean Startup? During the class I’ll summarise the work done so far (mostly by Eric Ries in his book “The Lean Startup”).
Everyone tends to think of “Lean” in this context as being short on money and having to make do on free or cheap tools. That can well be true, but it’s really more about cutting out the waste of time and/or money. Even if you have just closed a funding round, calling in the SAP or Oracle consultants to implement a million-dollar system is usually just about as dumb as lining the staff car park with new, expensive sports cars.
It’s certainly true these days that excellent software tools are available for little or nothing. People have grown to hate “company systems” and are unimpressed when it takes only seconds to upload and tag personal photos yet days to find a company document.
But, even if you had the money to spare, there’s no assurance most software tools will move your company forward, let alone accelerate growth. Many of them seem to be carriages that have lost their wheels – usually around the time the designers were acquired by the BigCo now selling it.
When you offer to talk about tools, there’s a huge risk it will turn into a “My Favourite Bookmarks” session. I may be thrilled with some tool I use, but I can’t expect you to feel equally excited until I show that it meets a need. If that need was to find new songs that are just like the songs that you already like then maybe that part is easy. But we’re talking obtuse Startups: a word that has Alice in Wonderland abilities to mean just what you choose it to mean – neither more nor less.
So I can’t (and won’t) just sit there opening boxes containing one glittery tool after another.
The other way to segment it might be to try sorting the tools by job title – you know, CEO tools, Tools for Finance, Tools for Legal, etc. Two problems with that: job titles are not well-defined either, and anyway a Startup will probably not be able to fill all these roles.
So I want to sweep away the job titles and find the tasks underneath. There are things a Startup needs, and you set tasks to do / get / achieve them; and it helps big-time if the people doing the task are good at it. Well-executed tasks need great skills or abilities.
My best shot at this is there are 6 core Abilities. I label them as:
There are 6 ability types, but it doesn’t at all follow that the ideal Startup is 6 persons. Knowing what you should be doing is the first step towards covering for what you are missing.
It turns out that the Lean Startup model offers a framework to manage these 6 abilities, and helps you understand which ability is optimal at different stages of the product cycle.
The mantra of the Lean Startup is to keep the product cycles short and focussed. Each cycle is like a quest to discover something new, or earn some new level. The abilities of your team shape the success of the quest. Your best plans will be challenged by unforeseen circumstances. It all soon threatens to become a bit “World of Warcraft: The Startup”, with Quests, Guilds and Mages over-running the place.
Luckily we can stick to reality by talking about the best tools to strengthen each of the abilities when used in the Lean Startup model. So when you are forming new ideas, what are the best tools to capture the thought flow? When you want to test something you have built (transformed) what are the best tools to do user testing? As you persuade a customer to sign-up, what are the best tools to help you keep track of the relationship? And so on.
Anyway, that’s the small quest I have set for myself next week in a session entitled “Stay Lean: Your Startup Toolkit”. It’s one of the Cambridge Startup Masterclass talks that take place at ideaSpace, and this time it’s my turn. My aim is that each person there will discover at least one tool that’s new to them and that they’ll use regularly from the next day onwards.
All the details are here:
http://startupmasterclass.co.uk/programme/cambridge/stay-lean-your-startup-toolkit/
Although I’m in a Startup business I admit I’ve been confused about what is happening to UK Government support in this area. I had a vague idea that the regional development authorities (in my case EEDA) were on the way out due to their funding ending around now (Nov 2011). Where does that leave other services such as BusinessLink?
I would have carried on in blissful ignorance but my better half who works in Education wanted to know how her students might get access to good information and advice on how to become self-employed or start a small business. Naturally I had to put aside my work to research this immediately for her 
One impression I get is that there’s been a surge in the number of people offering independent advice – some of it well-organised and thought-out and some of it very much a ‘one man outfit’ where results may be a little more variable. In some ways it’s a reaction to the confusion – if the Government is axing the service, better step in and provide an alternative. If that alternative is good, then fine. But to risk messing with the startup dreams and aspirations of (especially) young people is not.
So what are the facts?
Well, the regional bodies are certainly going, going gone and seem likely to be replaced by something called LEPs. Why and how they came about is a mystery to me, but I am unskilled in the art of Quango creation.
UK Government has not axed the centralised BusinessLink, but has rather given it something of a facelift. The new portal (http://www.businesslink.gov.uk/newservices) gives you a choice of whether you want guidance through the startup process (http://www.businesslink.gov.uk/mynewbusiness) or whether you need advice more on how to survive and grow to the next level (http://www.improve.businesslink.gov.uk/).
My first impressions are that both sites have a lot of useful information and resources (a lot of it in short video form). Some of it isn’t cutting edge advice – for example the video on Business Plans is a little bit old-school and won’t appeal to Lean Startup enthusiasts. But I can live with that. If you are lucky and have access to high-calibre services such as Startup Masterclass (http://startupmasterclass.co.uk/) then good for you, but if I was cut-off from those services then these BusinessLink web sites would be a good safety net.
And there are even buttons for Twitter (@BusinessLinkGov) and Google +1.
The other web site they recently launched is also interesting. It’s called Mentorsme (http://www.mentorsme.co.uk) and it’s a sort of online dating service connecting entrepreneurs with experienced business mentors. Naturally I tried it out – Cognidox Ltd is a “growing” company based in Cambridgeshire, so who can I talk with to be mentored? It gave me just one local business coach contact, four national organisations and two online-only organisations. None of whom were familiar to me (and that’s not a good thing).
Like many similar websites, it seems like a skeleton with the content “yet to happen”. Which is exactly the wrong approach for a web-based business so they didn’t follow their own advice really.
But that’s correctable. So I would say to all my contacts who provide professional services and startup mentoring / coaching services: Get your name and contact details on this site. We’ve already paid for it with our taxes so it makes sense to get behind it and make it work.
I’d like to see the Mentoring site “grow a pair” to use a rude expression. Put up recommendations and reviews for the mentors. Crowd-source whether or not “Jane Doe” is a true source of inspiration and a genuine aid to the startups she’s helped. That would be better than any sort of attempt at regulation for “Small Business advisors” or similar.
And can I just say that, in the context of earlier criticism (http://www.cognidox.com/blog/post/91-how-do-you-spend-35-million-on-a-website) well done for buidling at least one of the web sites using Open Source technology (Apache, Drupal, jQuery).Quite why it didn’t make sense to use the same technology for all three sites is a matter for another day.
Just been reading about the Internet outages and stability issues yesterday – it was traced (maybe I better add “allegedly”) to a bug in Juniper’s edge routers – code which controls the BGP (border gateway protocol) tables. Think of BGP as a big table containing the best or only routes an IP packet can take. It’s pretty necessary stuff to keep networks networking. According to the report in The Register (http://www.theregister.co.uk/2011/11/07/global_net_outage/), the bug caused router devices to core dump and automatically restart.
Juniper seemed to get on the case quickly, and they’re able to say already that “a software fix is available, and we’ve been working with our customers to immediately deploy the fix.”
Think about this for a moment…
There is a crisis and senior executives at your company are in an agitated state demanding action. After hours of investigation and remedial coding (not to mention some fast-track QA) there is a fix available.
Now how do you get that fix to hundreds of companies who use your software in their networking products?
We had this scenario often enough when I was software VP for a semiconductor company and it was for this reason we developed the Licensing features in CogniDox. In a scenario like this we would have a product (let’s call it the “Router 1000″) which contained the latest version of our embedded software (let’s call it “RouterWare 5.1″). Now we had an even newer version “5.1.1″ containing the fix.
CogniDox is set up containing records of all customers (Licensees) and there would be a license for RouterWare 5.1. This license would be applied to a whole set of documents in CogniDox, including the zipped file containing the images for RouterWare 5.1. When the new version of the software was ready, it would be uploaded, issued and approved. It was then published (usually by a Product Manager or a senior Software person) to the customer support web portal.
Every customer contact who had that license was automatically emailed and told how to download the new software. As they did so a record was kept of who had downloaded. A day or two later when someone asked about this, it was easy to say that “85% of the customer base has downloaded it already”. The other 15% were also easy to identify, in case Marketing or Sales wanted to contact them to see why they hadn’t downloaded. If one of those 15% called in to report the same problem, the quick remedy was to suggest download and upgrade.
Nothing completely cancels out the stress of an urgent fix-to-the-field, but this level of automation certainly helps.
I was at another excellent meeting last week of the Cambridge Product Management Network which as the name implies is a special interest group for product managers working in the area.
The speaker was Elizabeth Ayer, a Product Manager at Red Gate Software, who was doing a rehearsal for an upcoming talk in Boston (the place with the other Cambridge). It’s shaping up well based on what I heard.
Elizabeth’s focus was on finding the pain of your present and future customers. Every start-up knows the drill: “what is the pain point you are addressing?” And “is your product a vitamin or painkiller?
It’s a curious analogy, when you think about it. Especially when in the real pharmaceutical world people seem happy to spend on both, or even on (ahem) “performance enhancers”. What it comes down to is that if a product or thing literally does cure a pain, then the degree of brand loyalty to it will be unsurpassed. People will literally tell their friends. And that’s what you are after no matter what gizmo or gadget you are pushing.
Elizabeth pondered the dilemma whereby most of us can’t explain our body pains to a doctor, let alone describe the shortcomings of e.g. our knowledge worker tools to a passing product manager looking for feature enhancements.
Most of the talk was about breaking the barrier and getting into the zone where people could talk about requirements. To switch metaphors to fishing, it may be ok to use a cast net for mass-consumer products but you need a rod and line to catch the niche user.
Much of it comes down to the skills of talking and listening. And knowing when you are hearing about the problem and not the pain. And not getting hooked on acceptance or resignation, nor getting sucked into the rational.
But those are Elizabeth’s points and I look forward to when she can share them on-line with us.
For my part, I started to recall a ton of Psychology research into the (alleged) fallibility of human reasoning and communication.
If a trained counsellor can’t have an un-biased conversation with a client, what chance the untrained product manager? To use yet another metaphor, what’s the chance of asking a question without adding “cognitive contamination” to the answer?
There’s no silver bullet, but for a quick fix the least we can do is read up about some of the ways that we fool ourselves with language and thought. We could do a lot worse than start with the useful list of cognitive biases on Wikipedia.
My top five are:
p.s.
Recommended reading and sources (both open as PDF):
Tversky, A. & Kahneman, D. (1986) Rational Choice and the Framing of Decisions
Later this evening I’m speaking on a panel at the launch of the Startup Masterclass programme (see http://startupmasterclass.co.uk/).
The theme is “Stories from the Start-up Jungle” and as a guide the panellists have been given a few questions to answer. In typically frank (as in honest-but-dumb) mode I’m going to answer mine in public, beforehand.
It was the “Full Monty” scenario – enough redundancy money that would last me a year if I scrimped and I had a strong urge to be my own boss.
Learning (as in understanding) new things outside my Engineering comfort zone, e.g.:
#1. Know yourself – what type of starter-upper are you? Whenever I speak with someone about a start-up it turns out that they are talking about a wide range. Roughly these fall into one of four desires:
Seems to me that none of these are “wrong” but you deserve it to yourself to understand why you are about to do this. It’s not enough to have a general ambition, this needs to be a life decision. For example, if you really want to be your own boss, is working for a company board made up of investors the best or only way to go?
#2. Know your customer. On this one I would paraphrase Seth Godin – find products for customers, not customers for products. Again you have to be honest and understand that this is NOT about making them happy, but rather making them pay (BUT ideally they are happy to pay).
#3. Know the obstacles. I’m thinking here of Zig Ziglar’s 5 obstacles to sales, namely No Money / No Need / No Hurry / No Desire / No Trust. I think before you put your trust in a new way of generating your personal income you have to take a really hard look at your market(s) and be sure these obstacles are not insurmountable.
Occasionally, when I have a spare moment and I’m being really dull I like to read company accounts – in the UK these come from Companies House. I like to look at the balance sheet for companies I know at least a little – the cash at bank, the profit/loss line, whether dividends are paid, etc. Then I try to imagine whether these people are in the startups they imagined for themselves when they first set out 
Hope I also remember tonight to stress that I don’t claim to have the answers, and that I regard my current situation as very much a work-in-progress.
Writing blog posts has had to take a back seat this summer because we’ve been busy writing a new user guide which was released yesterday.
It’s called the CogniDox Product Manager Guide. We already have a quite-comprehensive CogniDox User Guide, which is aimed at the general user; and a CogniDox Administrator Guide, which is for users in change of managing CogniDox.
That left a gap in the middle.
There’s a raft of CogniDox features – publishing content to an Extranet, creating and using Document Holders, enabling Limited Access for a development partner, integration with CRM systems such as SugarCRM are some examples; that are too detailed for a general user guide and have little or nothing to do with the installation, configuration and management of CogniDox itself. These topics needed their own guide.
When we characterise CogniDox user personas, we use this table:
Although it looks like a straight hierarchy from normal user to “top” users, in fact the extra rights you can give users in CogniDox change along a couple of dimensions, not just one. For certain normal users are just expected to use the tool to browse documents and upload their own. The power user has an extra element of team management responsibility (approving documents) but also has a say in information layout because they can manage categories. In that sense they are accomplices to the CogniDox Administrators, who are the Über-authority on how information is organised. They tend to be helped by an IT team, who focus on how CogniDox is installed and other system maintenance concerns, but may or may not be interested in the information hierarchy. If that all sounds like a lot of people, don’t be fooled. In smaller CogniDox companies it can be that one person does everything else apart from being a normal user. These are roles, not necessarily people.
So, one dimension is inward-looking and concerned with how company information is organised, ensuring that it is easy to find, and that project teams can work together better with the support of CogniDox as a collaboration tool.
Another dimension is evident when CogniDox is used for external content publishing. This can range from publishing an article to a publicly visible Blog all the way to full product releases where content is made available for customers to download on a self-service model. This raises issues of entitlement and authentication, because not all customers may be entitled to see the same content, and one needs to make sure it is the customer that is actually doing the download.
That’s where the Product Manager role in CogniDox comes in. They are the people who know all the details at the interface where Product meets Customer. They know what customers are entitled to see and they know (via help desk support tickets) what problems the customers may be having. This guide was written for them.
Starting the guide I asked two questions: What does a Product Manager do? What software tools does she use to help her do this? After a decade of reading web articles and books on this topic I thought these questions were basic. It surprised me that they turned out not to be, and the resources I’d been using (such as the Pragmatic Marketing Framework) were less useful than I’d predicted them to be.
It’s a topic that I’d like to revisit in the future. This article is just about making the announcement that the Guide is available.
If you have a CogniDox subscription you can get the plug-in from the support site:
VI-402317-TC (issue 4) - CogniDox Product Manager Guide https://support.cognidox.com/cognidox/view/VI-402317-TC
We moved our CogniDox blog from using a Joomla extension to WordPress a while back. You may have seen us release an open source project called WordBridge where we can create the blog in WordPress and have it appear on our Joomla-managed website.
That still left an un-met need for us, because we wanted a way to manage the Blog text within CogniDox. There are basic issues of version control and review workflows that don’t exist within blogging tools such as WordPress (and content management tools such as Joomla, as well).
It’s not so bad for us being a small company, but in a bigger company it’s a pain. Someone has to marshal all the blog contributors and come up with a schedule for who writes what, and when. Then they have to chase those authors and conduct “reviews” through email attachments. I’m sure that more than a few draft versions get published by mistake. It’s easy to update a blog post so it will never be seen again. Right?
That seems crazy if you already have a document management system. True, you could manage the document and manually wrangle it into the blog editor when it’s ready, but that’s so old-school and is prone to error too.
So we created the CogniDox WordPress Blog Plugin.
To use it, you do some basic configuration to tell CogniDox where to post your blog (e.g. http://cognidox.wordpress.com in our case).
Then you write your blog using your normal word processor. I’m using Word 2010 at the moment for this entry. You upload it into CogniDox as normal. You ask your colleagues to review it, and finally get it approved.
Then you just choose a new action called “Send latest approved version to WordPress”. CogniDox takes the original document and prepares it for web publishing. You get to see a preview, and you can select what categories and tabs you want. Once you like the results just click the Post to WordPress button and off it goes.
Once it’s in our WordPress.com account, it’s then bridged to our Joomla site using WordBridge. We never have to log into either the WordPress admin or the Joomla admin pages.
If you have a CogniDox subscription you can get the plug-in from the support site:
VI-402305-LS (issue 1) - CogniDox WordPress Blog Plugin https://support.cognidox.com/cognidox/view/VI-402305-LS
Last night was the Cambridge Product Manager Network ‘gala event’ – a special meeting before the summer break to which a keynote speaker is invited.
This year’s speaker was Alex van Someren (@alexvans), currently working for local VC company Amadeus Capital Partners and before that CEO at nCipher Technologies. And if I learnt one thing last night, it was that nCipher did much more than accelerate cryptography functions
Alex’s topic was essentially why should a VC care if an investment company does PM well or not? He established his credentials with a series of anecdotes about his product successes (and his ‘not so’ successes too). His experience comes from the startup world which is characterised by founders with a strong sense of vision. Hopefully they are in listening mode too, so they can hear the reaction from their market, and they’re smart enough to test the market with a minimally marketable product as soon as possible.
In that mode, he’d expect the PM role to be played by the founders themselves.
So at what point do startups need PMs? He did the sensible thing and asked one of his PMs from those days and the answer is that there are 3 trigger events:
1. Market complexity requires some difficult decisions to be made about “Product 2.0″. To borrow an analogy from a member of the audience, it’s the “difficult second album” for the band;
2. When there’s a need for “controlling” engineering. Not everything that can be built should be built. The ‘code warrior’ that worked so hard under his/her own impetus during the early days may now need more constraint and more direction, as a larger band of warriors tries to work in unison;
3. When there’s a need for “controlling” sales. Not everything that can be sold should be sold. The ‘gut feel’ that there may be a customer there is only the start of it. Will it work with the brand? Will we make a sustainable margin? Just some of the questions.
I had a boss once who talked about “someone needing to be the grown-up” during the accelerated growth stage of successful startups. Forget about the PM being the “CEO of the Product”. Oftentimes, you’re the kindergarten teacher of the product. You are the one who believes it will grow up to be something wonderful. You’re the one who will smooth over the divisions between product factions, and get them talking to each other again. You’re the one who cares.
That definition of a product manager as the CEO of a product came back to me a few times as I listened. The problem with the definition is what about the actual CEO? It kind of assumes that she/he is an absent presence, and that’s rarely the case in a startup. Alex is a classic example of the CEO with passion. To paraphrase one of his closing remarks: Every successful product has someone who really cares.
The Q&A session touched on many things but one interested me most. Alex said that although he was as ‘seat of the pants’ as most he did believe in a certain amount of process. A business case, a specification and an ROI was not a lot to ask, if I heard him correctly. Finding that balance between agile working and avoiding innovation stifle is what we all seek.
For over a year I’ve been following a great series of blog posts by Tarus Balog (founder and main mover of the open source network management product OpenNMS) all about the business of open source software.
His first in the series – about starting an open source business - uses a point made by software vendors to the value-added resellers (VARs) of their product: for every $1 spent on software licenses, a VAR can expect $8 in services revenue. I’ve seen the same 1:8 ratio quoted for every $1 spent on Microsoft Enterprise licensing.
The logic of an open source business then becomes quite simple: let the customer keep the $1 instead of paying for software licenses, and then try to help them achieve the same level of services for something less than the 8x model. Tarus says to aim for $4, for example. One reason you might be able to do it is because the customer has the source code and can do it themselves. But a bigger factor is that commercial open source changes the emphasis from outbound to inbound marketing, which significantly changes the way that sales happen. Paying for a sales team to make calls on (reluctant) buyers adds very, very greatly to the total cost of goods sold, which then has to be passed on to the customer in the cost of the software license.
Simple heuristic for this – it’s changing the 1:8 ratio to 0:4.
Hang on you say – isn’t that just reducing the total value from $9 down to $4. How can that be smart? Because after you factor in the total cost of sales to get that $9, there’s more retainable margin in the $4 scenario (if you do it right).
Starting-up an open source business isn’t free (Tarus says his first year of OpenNMS cost him $5,000 of his savings) but once you get over the hurdle of paying basic salaries you realise there’s savings to be made on marketing. A small open source project we donated 25 days ago has had an average of >170 views every day since launch. If we bid for every click we would have needed around $10,000 for month 1 alone. I know page views are not the same as dollars earned, but the fact is that the marketing budget would be spent regardless of whether it brought in paying customers or not.
Most commercial open source companies change the product offer from licensing to services. You can’t use the traditional software mantra that the customer is paying for bug fixes – there’s no closed source that they’re forbidden to reverse-engineer. It’s more about selling support in the proper sense of the term – helping them achieve a business goal. You don’t have to waste time proving the bug isn’t in your software / / user error / their fault. Maybe it is that they’ve configured the software wrong, or there’s some issue in their IT network outside your control. The interest comes from helping them overcome these things and getting back to being happy.
The mission statement at OpenNMS puts it better: “Help Customers, Have Fun, Make Money”.
There are lots of other good points in this series. Should you show pricing on your public website, for example? The answer, Tarus says, is that open source provides free software, not a free solution. By showing your pricing on your website it helps to get across the message that there is a price tag for services. How do you price for that support? One way is to look at the year 2 costs of the closed source solution (when it’s under a support and maintenance agreement). This is ususally at least 20% of a pretty high year 1 outlay. That’s what you have to match or beat.
In my view, Tarus Balog is one of the top thought leaders for the open source software model.
Links to all his Blog posts:
https://opensource.com/business/10/3/building-open-source-business
https://opensource.com/business/10/10/marketing-open-source-business
https://opensource.com/business/11/3/open-business-open-source-sale
https://opensource.com/business/11/5/open-business-sales-process
https://opensource.com/business/11/6/open-business-pay-day