We are working with a partner to build a web application that we believe clearly answers a need and is a great business idea, although that does remain to be seen. We use Drupal for most of our web application development but we have not been involved in a project where the aim is clearly to build an application based on an idea that would then be sold at profit.
The idea is Business to Consumer and has a clear revenue model.
Based on this core aim of selling the business, I'm wondering about people's experience of using Drupal as a basis for a valuable business. Particularly:
- Does the software being open source dramatically reduce the ownership and therefore value of the business?
- Are the "big players" less likely to invest in a business that is built on an open source framework?
- If through the GNU license we are required to share our code, is there any other way to protect the idea?
If anyone has experience of building up an online business through a Drupal-based solution that has been sold on at high value (or not!) then I would be really interested to hear your stories and advice on how to approach it for maximum profit whilst respecting the values of open source.
Thanks in advance!
Comments
Platform less important than business model
Hi,
I think your questions indicate some incorrect assumptions about the nature of the GPL, and what makes a business valuable. In reverse order:
You are not required to share your code. The GNU GPL license only requires you to share source code when you distribute object code, and that when you distribute code derived from Drupal, you cannot distribute it under any license other than the GPL.
But nothing says you have to distribute it.
The GPL is a great license for a platform you use to build a business on top of -- it protects you as a business from any question of infringing on someone else's copyright, or any ownership questions about what you're basing your business on.
That said, if you want to protect your idea, that's covered by patents, not copyright. GPL v2 (which Drupal uses) only covers copyright, it ignores patents entirely. GPL v3 does require you to license any patents you claim to anybody you distribute the code to -- but that doesn't apply here.
Patents are a lot trickier an issue than copyright, and in my opinion, completely broken. You could be at risk to being sued for patent violations if what you develop shares some tiny functionality somebody has patented, regardless of whether you knew about their patent or came up with the idea yourself. If you patent your ideas, you might have some defense in court, but the reality is this is probably going to boil down to who has the better patent attorneys on staff.
Definitely get a good one and get good advice -- personally I think we should do away with patents entirely and I hope that by publishing early and often in Drupal's git repository or on blogs with verifiable dates, at least you can argue you have prior art if somebody later tries to patent stuff you built.
These days, not at all. Guess who is built on open source? Some of the biggest players out there -- Google, Facebook, Apple to name 3. You're likely going to have a harder time raising investment dollars if you're not using open source -- you'll get asked why you're wasting investors' money!
The value of a business has very little to do with the cost of creating it, and much more on the perception of how hard the problem is to solve, along with the cost of not having the product.
One example I heard recently was a little plastic snake thing used for unclogging a drain: http://www.amazon.com/dp/B000BO9204 ... originally sold in the $8 range, a couple dollars more than a bottle of Drano but re-usable. Cost is probably well under 50 cents (and it looks like the price has dropped to the $3 or less range).
Think of it this way: when you buy a used house, do you care how much the original builder spent on the plans for the house? Or the original cost of the materials? Probably not -- what you care about is the current condition of the house, the expected lifetime, the maintenance cost you're going to incur keeping it up, how functional the space is, and a million other things. The original cost is really irrelevant -- what matters is how it is today.
There are tons of huge sites running Drupal today, and I'm sure many have been acquired by others without the acquirer necessarily caring much about how it was built. One I have been involved with that's doing well is http://pethub.com -- we were their development team for their first 1 1/4 years of operation, and they are well on their way.
Cheers,
John