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Entrepreneurial tips shared on Tuesday

By   |  August 15, 2007

This month’s [1]Open Tuesday[/1] took place last night at a new venue in Joburg, Betty’s Tea Room. Although the turnout was rather small, it gave everyone a good chance to chat with the guest speaker of the night, Anton de Wet, co-founder of Obsidian Systems.

De Wet gave an informative talk offering tips on how to start up and succeed with an open source business, peppered with entertaining anecdotes.

He began by explaining how it never failed to amuse him when asked by strangers at parties what he does. His standard answer, that he sells free software for a living, normally takes a few minute to sink in, with people suddenly responding "What? You sell free software. That’s crazy!" The talk went on to reveal the method to the madness.

Drawing on his experience over Obsidian’s last 12 years, he explained some of the challenges they had experienced as well as some of the business models that have been built around open source.

He gave the example of a firewall that they built and offered for R10 000. One day they received a call saying that the price was ridiculous, the caller argued that he could download the software and build it himself for free. A little later that day, they got a call from another potential customer who complained that their competitor was charging R50 000 and that therefor their offering must be cheap and inferior.

The lesson this taught them was that value should be added in services. By selling the product cheaply and then charging a premium on the service, they were able to still undercut much of the competition but still create a perception for the customer that they were getting something of greater value.

Another challenge within the open source arena he described was the problem that one can do almost anything. This often meant that one was tempted to diversify beyond the company’s capacity and lose sight of the overall focus of the company. "One must think strategically, not opportunistically," he said.

Another relevant issue, especially as they began their business at a time when only very few people had even heard of [2]open source[/2] software and [3]Linux[/3], was the trouble recruiting people people with necessary skills. The answer to this problem, which is still something of a problem within the field, was to find people with the necessary qualities – curiosity and a desire to tinker with software to see what makes it work – and then give them the necessary skills from there.

In order to be taken more seriously in the business field, De Wet recommended partnering with larger international organisations. Potential customers that had previously written them off as small time players completely changed their attitude when approached again as a partner larger established players in the software field.

Diversifying from the business side of open source and looking at its philosophy which had first drawn him to the idea, he spoke about the way in which the open source approach has begun to spill over into other spheres. The creative commons licence was an example of where the open approach had been adopted into literature and the arts.

A particularly exciting opportunity that he hoped would progress was within legislature, where society’s laws could potentially be written by the public. This would mean that society would have a say over the laws governing it and be able to adapt and develop in an open and organic way rather than in the current top down manner in which legislature and law is relatively closed to the common person.

Having settled into a comfortable venue, next month’s open source networking event will be taking place at the same place. Further details will be posted on the website as they develop.

"You all missed out," said Open Tuesday SA founder Jason Coggon, to those that did not attend this month.

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