In this episode we speak to Joseph Jacks, founder and general partner at OSS Capital, a venture fund specializing in open source software. We discuss why open source is such an important differentiator for all software development, the philosophy behind open source, open core, and building a community around open source software, whether open source should be the default for all software.
- OSS Capital
- Richard Stallman
- Satoshi Nakamoto
- Linus Torvalds
- Red Hat
- Sony A600
About Joseph Jacks
Joseph Jacks is founder and general partner at OSS Capital, a fund that invests in Open Source projects. Previously, he was co-founder and VP of Technology Strategy of Kismatic which provided services for running Kubernetes at scale for enterprises. It was one of the top 0.01% of projects on GitHub and was acquired by Apprenda in May 2016.
Jacks also founded the KubeAcademy, the parent organization of the official Kubernetes community conference KubeCon, and was the co-Founder and CEO of Aljabr which builds cloud-native data pipelines.
David Mytton (00:05): Welcome to the Console Podcast. I'm David Mytton, co-founder of console.dev, a free weekly newsletter, highlighting the best and most interesting tools for developers.
In this first episode, I speak with Joseph Jacks, founder and general partner at OSS Capital, a venture fund specializing in open source software. We discuss why open source is such an important differentiator for all software development; the philosophy behind open source, open core, and building a community around open-source software; whether open source should be the default for all software; and what he looks for in investments. We're keeping this to 30 minutes, so let's get started.
I'm here with Joseph Jacks. JJ, thanks for joining the Console Podcast.
Joseph Jacks (00:52): Thanks for having me, David.
David Mytton (00:54): Let's start with a brief background. Tell us a little bit about what you are currently doing and how you got here.
Joseph Jacks (00:59): Well, I'm currently the founder and general partner of a venture fund called OSS Capital, OSS stands for Open-Source Software, and we invest in what we call commercial open-source software companies.
David Mytton (01:13): So let's start with your overall investing philosophy then. You're very specific about investing in commercial open-source software. What does that mean?
Joseph Jacks (01:22): Commercial open-source software is no different from any other type of open-source software. Fundamentally, open source can be commercialized by anyone, something like Linux. You could say, because Linux is the basis for this big commercial business called Red Hat, Linux is a commercial software. That's not really technically accurate. It's an open source GPL-licensed piece of technology, so it is both non-commercial and commercial at the same time. It's kind of interesting paradox that open-source technologies have, sort of like quantum computing or something like that. But essentially, what we focus on boils down to project like open-source projects and technologies that we think could be the basis for a commercial product and a commercial business that has a high level of commercial potential, basically.
David Mytton (02:17): The code licensed. So it being open source is really an important differencing factor. Does that mean something broader? Or are you focusing just on the license? What is it about open source that really excites you?
Joseph Jacks (02:28): I think independent of what I'm doing with investing in OSS Capital, I've always been just super drawn and excited by open source ever since, really learning and understanding it more deeply, which is probably 10 or 12 years now. Open source itself, again, independent of what I'm doing, is really the basis for the entire sort of digital technology world and universe that we see. I mean I think the consumer internet or people would say Web 1.0 or Web 2.0 wouldn't exist without open source coming before it, a lot of the big internet companies wouldn't exist without open source. Many of the biggest SaaS companies, I think pretty much every digital technology product, depends on the existence of open source, and so it's pretty profound. I'd say if you're in the technology industry or in the software industry and you don't have a deep appreciation for open source and admiration for it, that probably just means that you haven't learned enough about it.
But yeah, in the context of what I'm doing, OSS Capital came about because I'd spent a few years as an entrepreneur, and prior to that, just working as an employee in sales and kind of product capacities at different software companies. I sort of really started to get obsessed with this observation that there's kind of two types of technology companies or digital technology companies in the world. There's ones that are based on an open source core on one hand, and then there's ones that are based on a closed source core, the opposite of an open source core, proprietary core, on the other hand.
Open-core companies, or open-source core companies, or commercial open-source companies as we call them, we came up with this little acronym, COSS companies, COSS companies, that's just easier to kind of refer to them without using all these words, basically just refers to any software company that exists in service of growing some specific core open-source technology. Typically, one project could be a handful of projects, like HashiCorp has three or four core very central projects that sort of serve as the basis for their whole company.
Yeah, I mean, it's just something that I've been really, really obsessed with for a long time. In a venture industry, or I guess the venture capital world, I'm not sure if you want to call it an industry, there's really only been a handful of investors that have developed a strong reputation and sort of thesis around investing in open source startups or open core startups. And they hadn't ever applied an exclusive focus or a dedicated focus to this category. As I learned that over the years, I realized that that was kind of a big opportunity to build something that was just dedicated to investing in these types of companies. That's basically what I've been doing for going on close to four years now, which seems kind of crazy. Having fun so far and it's been a blast.
David Mytton (05:02): What is it about open source that you think is responsible for such a widespread adoption? The cynical view could be that it's free, but there must be something more profound as part of the philosophy.
Joseph Jacks (05:14): I think open source has seen a huge amount of adoption because it's just the best way to build digital technology. When you have a model that is sort of the best way to build something, I think the output of that is that it creates the best options for people who creates the best tools and infrastructure. I mean I think that that's kind of why every application or every service or every digital experience that humans benefit from is largely comprised of probably 80, 90% open-source code across the stack of things that make up whatever Facebook, or even this app that we're using, this Zencastr app, or Chrome Web Browser is based on probably 90 plus percent open-source Chromium code, maybe even more. And that reality has just continued to propel open source as a fundamental thing to other factors in the last kind of 10 or 15 years. We've gone from maybe a billion or so people on the internet to multiple billions of people on the internet in the last 10, 15 years.
And then in addition, actually the same guy that created Linux, Linus Torvalds, also created this version control system for basically developing software and versioning files and collaborating with other software developers called Git. And about a decade ago, I think it was 2007, 2008, some entrepreneurs came along and said, "Hey, we should build something like Facebook, but for Git." So software developers can kind of have this social network abstraction around Git, and store all the files and kind of interact with them and create higher level constructs, like pull requests and issues and stuff.
And then I think in the last decade, really, open source development has benefited hugely from just so many more humans being on the internet, combined with the fact that we have GitHub for basically making it so easy to share and collaborate around your source code, your open source largely. It's not like GitHub was a brand new idea. Prior to GitHub in the previous era, I'm not sure how many people remember SourceForge.
SourceForge was sort of the prior generation version of GitHub. I think it didn't have as much wide scale success because there were just fewer people on the internet and there's fewer software engineers in general as well in these sort of late '90s to the early 2005, 2006 timeframe. So I think those are some of the reasons.
David Mytton (07:29): The community is a huge aspect of it as well then.
Joseph Jacks (07:33): Yeah, definitely. I mean, I think the fact that people can just connect in real time and share thoughts and ideas. Communities have all different types of shapes and sizes and characteristics. And I think not all communities are the same, and open source communities tend to be very fractal and have a lot of different dimensions to them. But yeah, community is a good word to describe the sort of qualities that open source embodies, for sure.
David Mytton (07:56): All right. Historically, I suppose open source has been a license, so kind of a legal mechanism for distributing and allowing other people to use software code. So it's therefore been something that developers have thought a lot about, mainly when picking projects or licensing their own things. Sometimes that's come down to just ideology, but we're now seeing a lot more of these consumer type products appear where open sources become a major part of the strategy. What do you think about this as an evolution? And why do you think the open source is relevant to developers and non-developers?
Joseph Jacks (08:30): What you just described is one of the most exciting and profoundly important developments to happen in really our species, I try to be not too grandiose or anything, but our species and the existence of humans, is people who are not deeply technical engineers or developers actually appreciating the benefits of open source, which as you described, has really just been relegated to like, "Oh, it's a license model," and applying that license model to source code files that make up all the things that humans use.
Over the weekend, my seven-year-old kid, he was asking me if he could learn C++ because he's been playing with Scratch and stuff over the years. And he knows a bit of Scratch scripting language. We use this sort of crazy shark app game that he plays a lot. I went to the credit section, and I found the people behind it, and I was kind of describing to him like, "Well, there's actually all this code behind this app." He plays it on Nintendo Switch, and so we go on GitHub, and there's a Nintendo Switch emulator code base written in C++, which I may have actually found through your newsletter or someone else's newsletter recently. But it's just kind of interesting to see how you can use open source as a way to describe really profound things.
I guess going back to the non-technical societal interests in open source, I don't know, I think there's a few things that are sort of unlocking this or are making this interesting to people, and this was sort of societal mainstream. One of them could be just an increased sensitivity to the importance of privacy and the importance of being able to control and manage your digital footprint. I think prior to just appreciating things like hacking vulnerabilities and data manipulation and data exploitation, at a consumer level, people were just ignorant. Right? Ignorance is bliss. They didn't really have the knowledge and the mindset that allowed them to have the concerns in the first place.
And I think now that we've actually seen whether it's bad actors at the corporate level and big internet companies, or just mispricing market dynamics or not having the right services available for a specific consumer's need, people are going and saying, "Hey, if I could actually take control of this technology somehow, or if I could demand an alternative that gave me a guarantee, my experience wasn't influenced in any kind of malicious way because I could trust it in a more trusted and secure environment somehow." I think people are gradually realizing that there's kind of just one fundamental solution and framework that enables all of that, and it's open source.
I guess my big hope with this, because it is starting to become a really big thing, I think more than a hundred million people who've moved off of Telegram and WhatsApp, for example, to Signal, which is an open source messaging application. And that's one of the least non-technical applications you could use. You just download it on your phone and put in your phone number and you can start messaging with people securely. It's an open source application run by a nonprofit company or sort of foundation. It's kind of a fundamental piece of internet infrastructure. I think we're going to see more and more consumer applications like that for those reasons, just people have increased sensitivity to privacy, increased sensitivity to how good is the technology. And if it's open and built in this kind of collaborative open source way, maybe it can be the best technology and the most secure technology with all the best features and stuff.
I think people are just sort of slowly starting to realize that. My suspicion, like I was saying, I think it's largely because of just an increased sensitivity to the importance of privacy and the importance of trust and being able to actually trust the technology. And to reiterate, the biggest concern that I have of the consumer's ability to be manipulated is, if you drive down the highway, or the Autobahn, or wherever you're at in the world, and you see these billboards by Apple that says, "The iPhone equals privacy," these are huge campaigns that some of the biggest multinational technology companies are running. It's just a categorical lie over how the technologies that people purchase are fundamentally insecure and cannot be trusted.
Now, the question is, what is the trade off? Can you trade the level of trust that you would be able to have in some particular piece of technology in exchange for a better experience and an easier experience and a higher quality product, perhaps? And I think that we're just going to continue to see that. Look, I'm an iPhone user too. I'm a very happy consumer of a lot of proprietary products, but I think, over time, as society realizes that putting trust in the hands of many who are held to a very high transparency standard is always better than putting trust in the hands of a few that are held to a very, very low transparency standard.
I think, fundamentally, as people start to realize that, and then as the tools and options become more available, like open source alternatives and then open source, not just alternatives, but sort of replacements that are even better and that transform existing categories and transform existing areas in the technology space, can actually serve to unlock a better path. I think we'll start to see even faster mainstream changes. But yeah, to your point, I mean it's slowly starting to happen, just at a sort of mental recognition level. And I think over time, people are actually going to start making behavioral changes more rapidly.
David Mytton (14:00): That makes sense. So I suppose it comes down to the ability to see what's going on in the tools and systems and products that you're using. I remember playing around with stuff when I was much younger and wanting to know how something works. You just take it apart and play around with the mechanisms, and then maybe you can put it back together again. But with proprietary software, you can't do that. If it's open source, you can get access to the code and you might not understand it initially, but you can start figuring it out and learning how all these different products actually work, and to your point, verifying the claims around privacy and security and those kinds of things.
Joseph Jacks (14:33): Yeah. Here's one other piece that I would like to say which I think is important is, open source was really created and kind of invented by someone. It didn't just kind of come along through osmosis. So this guy Richard Stallman in the early 1980s came along and was like, "Hey, I'm really upset with how software developers are getting manipulated." His view was much more philosophically, ideologically charged, "It's just like evil, we're getting manipulated and it's exploitation." And so he was so motivated by that ideology that he created this license framework. So kind of the inverse of the close to a century old at that point, copyright framework, he called it copyleft, and he created a license model. And then he created a set of tools and started to contribute to the early underpinnings of what ultimately became the Linux operating system.
That first 15 years or so from the early '80s to the late '90s was dominated by this very ideological fringe software hacker community, appreciating the benefits of this approach. And then a group of people in the late '90s came along and said, "Yeah, I mean this is interesting. This is really profound stuff. The Internet's about to take off. We need to give this a new name." They basically came together, and I'm lucky enough to know a handful of those people. Actually, one of them is my business partner at OSS Capital, Bruce Perens. But there were a handful of people that came together in 1998 and they said, "Let's call this whole model open source. Instead of calling it free software, let's call it open source." Because free, in so many different languages, has different meanings and different connotations. This is difficult to understand what free even means.
The term open source is really given to provide more of a pragmatic marketing banner around all these concepts. And really, I think what we've seen in the last 20 years since that rebranding happened is, open source is the kind of phrase that people use. You don't hear free software as much. It's much more fringe. Free software is still out there and there's still a community. But one of the things that I hope is that people take open source and they understand the concepts, but they don't apply ideology or sort of ethics or morals to it. It's really just a framework that allows for a better way and a better future. It has nothing to do with religion or right or wrong. It just is. There's hundreds or thousands of open-source projects that are used to do incredible, amazing things in the world and transform industries and provide incredible experiences. Those same projects are used by terrorists to kill people. And they're used by nation states to commit horrible atrocities on their own population or other populations. And that just is. You can't discriminate.
One of the fundamental tenets of open source which I think is very critical is, you cannot discriminate how the technology is used and how it can change and evolve over time. Creating that framework is really critical. So those are deeper, deeper concepts. And open source does mean a lot of very specific things. Now we start to change it too much. It's not open source anymore, which also isn't necessarily bad at all. But I'm hopeful that the fundamental aspects of open source are appreciated by the continual sort of reinvigoration of excitement in the industry and in the society around what those ideas stand for. Probably the most recent manifestation of this is, I'm skipping ahead to one of your later questions, but Web3, crypto, all of these ideas are basically a rebranding yet again of fundamentally what open source is all about. This idea of decentralized development, decentralized distribution, permissionless innovation, literally all of these ideas are grounded on open source, which in my mind, from what I can see, I hear so little about open source and the criticality of open source, which came decades before the Bitcoin white paper was released in 2008.
In the context of that whole movement of blockchain and crypto and Web3, I hear much more about making money and much more about capitalism than I do about open source. The very funny and ironic thing is about how critical open source is to that entire movement. Without open source, Web3 never would've existed, crypto never would've existed, and Bitcoin never would've been able to exist. Satoshi took the Bitcoin spec, implemented it in C++, by the way, an open source programming language, and that implementation of Bitcoin was MIT licensed, and it still is MIT licensed to this day, which is one of the most popular and permissive open source licenses. People should have a more grounded understanding of open source actually what it means, and the fact that it's contributed so immeasurably to the entire digital economy, that the world would be a very different place without it.
David Mytton (19:04): Would that mean then that you think all software should be open source by default?
Joseph Jacks (19:09): I think eventually, I do. I do think eventually all software should be open source by default. I don't think it's necessary today. The world operates in a pretty functional and rewarding state because not all software is open source. And in fact, a big part of the model that I'm pursuing, frankly my investments are benefiting from as well, is the combination and the sort of the synthesis of closed source around open source, not the other way around, where you have proprietary software at the core and then open source at the edges. What I think is a better transition and a pathway to the future where everything is open source is where we gradually eat. The apple or whatever metaphorical fruit you want to choose from the inside out versus from the outside in, it would just be a lot more efficient and fundamentally easier and structurally allow for better evolution and experimentation and inclusion and a lot of things, especially from the engineering community where things tend to be more bottoms up and sort of inside out versus outside in.
And so that's this whole open-core model where you have a company, like an entrepreneur software engineer comes along and says, "Hey, actually, I want to build this app or this tool. I think it'll be useful for the world." Instead of starting off and building that as a proprietary widget or proprietary binary of some kind or proprietary software, they can start by building it as an open-source tool, build a community around it, get a lot of adoption. What I think continuously happens is, those projects, as they reach high levels of adoption and high levels of impact, there's multiple personas of users that start to materialize in those communities. There's users who are satisfied and happy with 99% of all the functionality and the benefits and capabilities they can get out of that project. And they're never going to pay anyone any money for anything because it's just satisfying all their needs, or 99.9% of all their needs.
And then you have another group of people who are like, "Wow, I love this project. There's so many people in my organization that are using it." It could be small companies, medium companies, big companies. And they say, "Look, I need this to be integrated with this set of proprietary services I have that my business depends on." It could be an old mainframe application, or it could be some old database. Or, "I need to build monitoring and security and governance features around this thing, so I can secure it and run it more efficiently." Those pieces of software don't necessarily need to be open source. I don't think. Because what it does is, it actually allows for some value capture, some monetization by some business, or maybe even the creator of the open source project.
That's the whole model that I'm obsessed with, is convincing the open source maintainer or the open source author, creator themselves, to start a company and build a commercial business around it while also sustaining the growth of that core open-source project. A really easy example, Mr. Linus Torvalds created Linux and he created Git. Both of those projects have caused the creation of something in the order of around a half a dozen multi-billion dollar businesses. A half a dozen.
David Mytton (22:13): Right.
Joseph Jacks (22:13): A half a dozen of them.
David Mytton (22:15): Amazing.
Joseph Jacks (22:16): On the Git side, we have GitHub, we have GitLab, we have a bunch of others. Actually, 10 plus billion dollar business is there. On the Linux side, we have Red Hat, we have SUSE, we have a long list of the Linux distribution vendors. Head Linux just been offered or given 1% of those companies. I mean he would be far wealthier than he is today, working for the Linux Foundation, who... By the way, I'm good friends with Jim Zemlin. Jim's done amazing work and created incredible abundance for a lot of very, very talented and invaluable humans, who've created open source tools that have changed the world. I love Jim's work and I'm a huge fan. But I'm a bigger fan of capitalism. And I think capitalism is an incredibly powerful model for creating abundance and change and innovation in the world.
Everything I'm doing is basically driven to encourage and help more open source creators to become entrepreneurs and to become founders of companies around their projects. I don't think it's a trade off of selling out or going to the dark side or taking a project and then pulling the rug under the feet of your users. There's certainly ways that you can do that. And I would view those as anti-patterns and not positive things for those ecosystems in those communities. But I think that the world would just be a far more exciting and interesting place if you had this progression where pretty much every human realizes that the most lucrative, most sort of wealthy part of the global economy is in the technology industry, as sort of the first order conclusion.
The second order conclusion would be in the technology industry. The people who are compensated and rewarded the most are the people who actually build the technology and create the businesses that go to market. In some cases, some people choose to purely build the technology, and they don't choose to start the businesses, but they can still contribute to growing those businesses by being employees of them or early advisors or investors. But in some cases, some people just decide to start the companies and to not build the technology, which is, I think, why we have a lot of very wealthy entrepreneurs who didn't actually create the technologies. They just sort of stitched the technologies together, i.e., all the open source, and they built very large consumer internet businesses and became very wealthy as a result.
I'm not saying that that approach is wrong either. But what I think would be far more exciting is if we had a more direct connection between the process of creating digital technologies at a fundamental level, in other words, the open source contributions and how entrepreneurship actually works. And educating open source maintainers about how easy it is to make the progression, if they want to, that's not a sort of required path, but making it more easy for them to realize, "Wow, you can create your project and you can create a company around it." And that business could potentially raise some venture capital. By the way, there's pretty much the entire venture capital industry obsessed with open source companies. And that's a pretty new phenomena kind of over the last couple years.
So you can easily raise venture capital if your project has a certain degree of traction, adoption and commercial applicability, and sort of valid market alignment and so forth. And you're potentially the right person to build that business. Or guess what? You don't even need to really raise venture capital in a lot of cases. You can build something that's extremely capital efficient, and instead raise money directly from your customers. You don't always need to raise venture capital. In fact, not raising venture capital and building a company that you own a hundred percent of is maybe, in many cases, a much, much better decision, obviously a lot of trade offs there.
David Mytton (25:40): Oh, that's interesting. So how should developers think about this from the start then? And how have you seen the most successful projects evolve over time, particularly if they don't start with that intention to commercialize? Any common errors that developers should try and avoid?
Joseph Jacks (25:55): Yeah. I mean, there's so many questions in there. I think every journey and every evolutionary path is very different. I've obviously studied these companies intimately for many years, and I've looked at a lot of different paths. There's a few things to kind of keep in mind, is if your intention is to build a business around your open-source project and your open-source invention, just be explicit and clear about that from the beginning with at least your internal stakeholders and your supporters, as well as your community. I think that that's actually really, really important. And the reason for that is, it just creates higher levels of trust and alignment. There's other things that you can do beyond just being open source that creates a lot of trust and alignment. It's really by being clear by your intentions and your expectations.
Expectations are pretty different from intentions. They're kind of the inverse of each other. Expectations are kind of like, what do you think is likely to happen, or what do you expect will happen from the reaction to your work and your project. And your intention is kind of going out and saying, "Hey, this is what I plan to do. This is what I want to do. And this is what you should expect of me." The expectation side is the inverse of that, which is what I expect from you. One thing that I think not enough developers do, honestly, even independent of building a commercial open-source business around their open-source project, or just being an open source maintainer and not having an interest in being an entrepreneur or starting a business.
The biggest piece of execution, a miss almost or something that is neglected a lot, is being super clear about your intentions and your expectations. You can really do that very early on, even if you don't have a super large community, or a lot of data or feedback from your user base or from people actually playing with your technology. You can be very, very clear about your intentions and your expectations early on. I think that there aren't any necessarily good or bad intentions or expectations as long as you're clear about them. The biggest mistakes that I see here, when there is the absence of expectations or intentions. And then sort of two, three years into a project, huge community, massive success. And then every week, invariably, there's dozens or hundreds of people saying, "Oh, hey maintainer, can you please fix this for me?" or not even saying please, but demanding that something be fixed or requesting features, and maintainers getting burned out or maintainers getting frustrated, or the creators getting just exhausted and rotating out of the project, or saying it's just not sustainable.
David Mytton (28:31): Before we wrap up then, I have two lightning questions for you. So the first one is, what interesting dev tools are you playing around with at the moment?
Joseph Jacks (28:41): I'm not really a developer, so I don't think I can give a good answer to this question. I can code. I'm pretty technical, and I learn about a lot of different technologies all the time. I'm not a programmer on a day-to-day basis. Yeah. I mean, I was in IntelliJ yesterday with my kid. I have a very junky homegrown development setup, so I'm not really playing around with dev tools too much.
David Mytton (29:02): Okay. So perhaps more broadly then, what's your current tech setup, hardware, software? What are you using?
Joseph Jacks (29:09): Currently, in my home office, I'm on Apple iMac. I've got a Rode microphone, and I've got one of these Key Light Air backlight things. I've got a Sony, looks like a Sony A600 or something of that sort, an HD camera. Pretty much it, pretty simple. And I've got my iPhone on my desk.
David Mytton (29:30): Well, unfortunately, that's all we've got time for. Thanks for joining us, JJ.
Joseph Jacks (29:34): Thank you for having me, David.
David Mytton (29:36): Thanks for listening to the Console Devtools podcast. Please let us know what you think on Twitter, I'm @DavidMytton, and you can follow @consoledotdev. Don't forget to subscribe and rate us in your podcast player. And if you are playing around with or building any interesting dev tools, please get in touch. Our email is in the show notes. See you next time.
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