Open Source as Catalyst for Industry Quality and Business Principles
TL;DR
- Open-sourcing software creates a "viral leveling up" effect across the industry by encouraging meticulous development and inspiring others to take pride in their work.
- Releasing entire products as open source, rather than just infrastructure, allows for direct community feedback and can validate unconventional development approaches.
- The "gift" of open source has no marginal cost to the provider, making it an economically sound strategy that yields positive externalities and reputational benefits.
- Open source encourages better code hygiene and attention to detail because developers know their work will be publicly scrutinized, akin to "painting the back of the fence."
- Commercializing open source by offering a SaaS version while giving away the core code allows companies to recoup investment while fostering community and transparency.
- Community contributions to user-facing products, like Fizzy, offer a playground for new ideas and a collaborative process that can reveal unexpected product directions.
- The "OSASSY" license, which allows free use but reserves commercialization rights for SaaS, offers more freedom for many use cases than traditional restrictive licenses like the GPL.
Deep Dive
The 37signals philosophy champions open source not just as a technical foundation, but as a catalyst for enhanced quality, community engagement, and a demonstration of principled business practices. This approach extends to their newest product, Fizzy, which embraces a dual SaaS and open-source distribution model, challenging conventional wisdom about proprietary software and commercialization.
The core argument for open sourcing at 37signals stems from a deep-seated obligation and practical necessity. The company's very existence as a software entity is built upon open-source technologies, from operating systems to programming languages. This foundational reliance creates a moral and practical imperative to contribute back to the ecosystem that enabled their growth, making it affordable and accessible to start and build. Beyond reciprocity, open source fosters a culture of learning and transparency. The ability to inspect and understand how systems work, mirroring the early internet's "view source" functionality, is invaluable. When applied to their own development, open sourcing projects like Ruby on Rails accelerates innovation through community bug finding and feature implementation, creating a virtuous cycle of shared development and learning. This flywheel effect is fundamental to their success.
This open-source ethos directly influences product development and quality. When code is visible to the public, there is a natural incentive to write cleaner, more meticulous code, akin to personal pride and reputation management. This meticulousness not only elevates the quality of the released software but also fosters a "viral leveling up" of the entire industry as others learn from and adopt best practices. This creates positive externalities, a stark contrast to the negative externalities often associated with data-driven, ad-based business models. For Fizzy, this means demonstrating that a product can be built with a "vanilla" approach, using foundational technologies without excessive proprietary frameworks, providing concrete proof that a simpler, more transparent method is viable.
The decision to launch Fizzy as both SaaS and open-source represents an evolution of their "once" model. While previous offerings allowed users to run software on their own servers for a one-time fee (like Campfire), this proved to be a market that had atrophied. Fizzy carves up economic rights differently: the SaaS version is where 37signals recoups investment, while the entire codebase is freely available for self-hosting and modification, with a specific clause restricting the commercialization of the SaaS aspect. This hybrid approach is a direct response to market realities and a principled stance on transparency. The controversy surrounding whether Fizzy's license qualifies as "true" open source highlights a debate about the definition of open source itself, with 37signals arguing their "OSassy" license offers more freedom for many use cases than more restrictive licenses like the GPL.
The Fizzy launch also signals a shift in how 37signals engages with external contributions. Historically focused on infrastructure, their open-source contributions were less user-facing. With Fizzy, they are opening themselves to direct feedback on product design and features, treating suggestions and pull requests with a more collaborative attitude. This willingness to "give suggestions five minutes" and explore community-driven ideas, drawing lessons from the success of user-facing projects like Omachi, indicates a strategic embrace of collaborative development to foster excitement and pride, and to potentially influence the direction of their more traditional products. The active GitHub discussions and upvoted suggestions, such as the high demand for regular password authorization, provide valuable insights into user priorities, even when those priorities are unexpected.
Ultimately, the open-source approach, particularly with Fizzy, serves as a tangible demonstration of 37signals' business philosophy. It provides irrefutable proof of their working methods, fostering trust and transparency in an industry often characterized by opacity. By sharing their code, they not only contribute to the broader tech community but also reinforce their commitment to a better, more principled way of building and running businesses.
Action Items
- Audit Fizzy codebase: Identify 3-5 areas for potential UI/UX improvements based on community suggestions (ref: GitHub discussion).
- Create runbook template: Define 5 required sections (setup, common failures, rollback, monitoring) for open-sourced projects to prevent knowledge silos.
- Implement mutation testing: Target 3 core modules of Fizzy to identify untested edge cases beyond basic coverage metrics.
- Track 5-10 community pull requests per sprint for Fizzy to measure adoption and identify areas for collaborative development.
- Measure correlation: For 3-5 open-source projects, calculate the correlation between community engagement (stars, forks) and adoption metrics.
Key Quotes
"literally everything that we have ever built has been built on top of open source so even though we make a bunch of open source software we only make that and we're only able to make that because everything beneath it is open source we use the linux operating system for many many years we used to just on the server and now we also use it on our developer platforms or our developer laptops we use open source databases we use open source pretty much everything open source programming language ruby"
David Heinemeier Hansson explains that 37signals' entire software development foundation relies on open source technologies. This highlights the symbiotic relationship where the company benefits from open source and, in turn, contributes its own open source projects.
"I think open source has simply just opened the doors to so many more people to be able to create things and get going before there's any economic activity or value to what they do but I think it also goes even deeper than that I just I love being able to see how things work I love being able to take something apart and inspect it and learn from it and open source allows that better than anything else"
Jason Fried elaborates on the democratizing effect of open source, enabling more individuals to build and innovate without initial financial barriers. He also emphasizes the inherent value of transparency, allowing for inspection and learning, which is a core tenet of open source development.
"when people can see your code you tend to just make it a little bit better you care about how it's laid out you care about how you do it you care about the techniques that you use because there's no secrets like everyone can see how you're doing it and I remember way back in the day when I was making websites I took a lot of pride in basically tabs and spaces you know and lining things up in a certain way that just looked good and I think it built good habits in me to care about that"
Jason Fried discusses the impact of public visibility on code quality, likening it to a form of "hygiene." He explains that knowing others can inspect one's work encourages meticulousness and pride in craftsmanship, fostering better development habits.
"it's about as high flying kumbaya as you can get but it also it's easy in my opinion to do that even from a commercial perspective because it feels like it's free in fact it feels like it's better than free for all the reasons jason says when you up your game and you take more care and effort to make something really nice like you're paying yourself dividends and then that everyone else also get to get the dividends from that and in return just feels like such an additive process like the best of what commercial software development can be that it has these positive externalities"
David Heinemeier Hansson argues that open sourcing software, even from a commercial standpoint, is highly beneficial. He suggests that the effort put into making code high-quality for public consumption yields dividends through improved internal practices and positive external contributions to the industry.
"we really questioned that with fizzy not because we were the first to question this paradigm there have been others who've done similar thing where they've released their entire product as open source and then they've tried to commercialize it in a variety of ways so in that regard this isn't pioneering some new deep dish here others have done it but for us it was definitely a bit of a barrier to think that there's a project we're doing here that's not just done as a free we're just going to give it away thing we're going to try to commercialize it we're going to try to make a sas version of it"
David Heinemeier Hansson explains the novel approach with Fizzy, where the entire product is open source while also being offered as a SaaS product. He acknowledges that this model isn't entirely new but represents a significant shift for 37signals, challenging their previous approach to open source.
"I think a lot of people would find the osassy license more fitting having more freedom for their particular use case than the gpl does so some of this is I think is just like nerds being nerds and pedantic some of it is legitimate old historic battles that maybe someone is still traumatized by the 90s and fighting off microsoft and oracle tried to destroy things and then some of it is also just people being pissy on the internet and finding fault with every goddamn thing that ever existed including looking a freaking gift horse in the mouth"
David Heinemeier Hansson addresses criticism regarding Fizzy's license, suggesting that the "osassy" license offers more freedom for many users than traditional licenses like the GPL. He attributes some of the backlash to pedantry, historical anxieties about corporate interference in open source, and general online negativity.
Resources
External Resources
Books
- "Rework" by Jason Fried and David Heinemeier Hansson - Mentioned as an example of the company's transparency and approach to business.
- "It Doesn't Have to Be Crazy at Work" by Jason Fried and David Heinemeier Hansson - Mentioned as an example of the company's transparency and approach to business.
Articles & Papers
- "Open Source Outside the Box" (REWORK podcast) - Discussed as the topic of the episode, focusing on 37signals' approach to open source software.
People
- Jason Fried - Co-founder of 37signals, discussing open source and the company's new product, Fizzy.
- David Heinemeier Hansson - Co-founder of 37signals, discussing open source and the company's new product, Fizzy.
- Kimberly Rhodes - Host of the REWORK podcast.
- Mike - Contributor to 37signals' open source projects.
- Jorge - Contributor to 37signals' open source projects.
- Jz - Contributor to 37signals' open source projects, managing UI-based contributions.
Organizations & Institutions
- 37signals - Company that develops and uses open source software, and produces the REWORK podcast.
- Microsoft - Mentioned in historical context regarding efforts to undermine open source.
- Oracle - Mentioned in historical context regarding efforts to undermine open source.
Websites & Online Resources
- 37signals.com/podcast - Website for show notes, transcripts, and leaving video questions for the REWORK podcast.
- Github - Platform where community discussions and pull requests for Fizzy are managed.
Other Resources
- Fizzy - New product from 37signals launched as both open source and a SaaS product.
- Ruby on Rails - Open source programming language and framework developed by 37signals.
- Hotwire - Open source technology developed by 37signals.
- Kamal - Open source deployment tool developed by 37signals.
- View Source - Early internet feature allowing users to see HTML code, used as an early form of learning open source.
- Linux - Open source operating system used by 37signals.
- MIT derived open source license - A common type of open source license.
- GPL (General Public License) - A form of open source license with specific restrictions.
- Osassy license - A custom license created for Fizzy, allowing commercial use of SaaS but otherwise open.
- Once - A previous 37signals product model that involved selling software with source code access.
- Campfire - A 37signals product mentioned in relation to the "Once" model.
- Movable Type - An early self-hosted blogging system.
- Blogger - An early product by Evan Williams, mentioned as an early SaaS example.
- WordPress - A popular self-hosted content management system.
- Omachi - A user-facing software project from 37signals that saw significant collaboration and downloads.
- Magic Link authentication - A login method used in Fizzy, noted as a highly requested feature.