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Open Core Ventures Handbook/đź’ľCommercial MVP

Commercial MVP

A minimum viable product is the simplest version of a product that can be sold. The goal of an MVP is to collect customer feedback with minimal effort and avoid building products that customers don't want.
It is important to start talking to customers early on and throughout the lifetime of a company. They will help provide insight into the problem that the company is solving, which should inform product development. Don’t make the mistake of building in isolation.
Customers buy solutions to problems, not features. By identifying and prioritizing the needs of your heaviest users, you can develop products that address your customers' most pressing problems. Understanding these problems deeply requires iterative development to refine how you meet customer needs.

Deciding first features

You don’t need to reinvent the wheel to get started creating enterprise features. EnterpriseReady.io is a great resource that identifies which enterprise features to build first by providing a research-backed roadmap of the 12 most valuable enterprise features, based on studies of successful SaaS companies. Founders can use the self-assessment tool to benchmark their product, receive specific implementation guidance with real-world examples, and prioritize development efforts that will drive enterprise adoption and revenue.
To improve the existing product, product features should be weighted based on their source in listening to customer feedback and informed by customer discovery, and not necessarily on the frequency of requests.
  1. Ideas for features and functionality can come from users, but the end result of what the product will do is defined by the product team.
  1. 90% of the product scope will come from the product team.
  1. Don’t listen to the last objection.
  1. Potential customers never buy because of product features
    1. Overvaluing the requirements of a potential customer can be a high effort and deprioritize more meaningful improvements.
    2. Someone who has never used your product can’t really know how to make it better - their suggestions may in reality be low priority when actually using the product.
  1. The heaviest users will give the best feedback - they understand the limitations of the software and will be more likely to have submitted pull requests for modifications and issues.
    1. Visibility into that feedback through contributions by heavy users is an advantage of open core products.
  1. Sales requests are important but will not make up a significant amount of feature development. Product and sales should have a list of the 5-10 most important requests that they revisit every quarter.
  1. Prioritize features requests based on effort vs value - focus on high value low effort changes.
  1. Working closely with large customers tends to yield the best new features. Large customers have knowledge, expertise and ask for things other customers want.

Avoid second-system syndrome

Second system syndrome refers to the tendency to overcomplicate and over-engineer a new version of a product or system. This syndrome occurs when the creators of the second system try to address all the perceived flaws and shortcomings of the first system, resulting in a bloated and ineffective solution.
To avoid falling into the trap of second system syndrome, it is important to follow these guidelines:
  1. Focus on the core functionality: Identify the most critical features and prioritize them over secondary or nice-to-have functionalities. Keep the system lean and focused on delivering value to users.
  1. Iterate and gather feedback: Instead of aiming for a perfect and fully-featured system from the start, adopt an iterative approach. Release early versions of the system, gather feedback from users, and make incremental improvements based on their needs and preferences.
  1. Stay aligned with user needs: Continuously engage with users to understand their requirements and ensure that the system remains aligned with their needs. Avoid adding features or functionalities that are not directly relevant or valuable to the target users and avoid building in isolation (see
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    Finding customers
    ).
  1. Keep the team focused and accountable: Maintain a clear vision and goal for the second system and communicate it effectively to the development team. Encourage collaboration, open communication, and a shared responsibility for delivering a successful product.
By following these guidelines, you can mitigate the risks of second system syndrome and create a well-designed, user-centered system that effectively addresses the shortcomings of the first system without introducing unnecessary complexity.

Announcing a new release

Commit to a regular communication schedule for release updates. A monthly blog post is recommended. The blog post may include a changelog and should highlight new features and notable improvements.
Publishing a monthly release post is a chance for you to share your product story. As a bare minimum, it’s important to proactively share with users and customers any changes to the product. But a release post can also be a powerful marketing tool. Take your release post a step further by explaining why the improvements are helpful to users and customers, how they fit into the overall product vision, and share prompts for getting started. Reiterating your product roadmap and vision helps generate excitement and can encourage folks to contribute.
What to include
  1. New feature highlights describing what the feature is and how to use it
  1. Roundup of all the changes and improvements made since the last release. Note anything that has been deprecated or any required upgrades
  1. Pictures and gifs showcasing new features and improvements
  1. Community contribution section thanking anyone who contributed to the most recent release
Release post titles
Avoid overly generic release post titles like “Acme 1.0 released” and instead tell the reader about something interesting you shipped. A better title may be “Acme 1.0 released with feature 1, feature 2, feature 3” giving examples of new features. An even better title leads with what the user can do or a problem solved via updates in the release. For example, “Develop faster with Code Suggestions.”
Good
Better
Best
Acme 1.0 released
Acme 1.0 released with Feature 1 and Feature 2
Acme 1.0: Developer faster with Code Suggestions

Premium/Enterprise Release

A premium or enterprise release for an open core company will usually be a version of that software that includes a software as a service (SaaS) option (which is hosted) in addition to source available and open source versions. The features that are a part of that release should be informed by sales efforts with features developed specifically to deliver on customer needs.
On-premises offerings with releases should be evaluated on a case-by-case basis for companies and generally is more useful for infrastructure projects. Certifications and data locality can represent a challenge for implementing on-premises offerings along with the possibility of functionality degradation.
Replicated helps software vendors with the delivery of on-premises solutions.

Competitors conversations

Once the company takes off, it will likely draw attention from direct competitors in the market. The general recommendation is not to take competitor calls for the following reasons:
  • If the outreach is from Business Development or Corporate Development, it’s likely a fishing expedition to acquire the business early (at a pre-mature, low valuation). It would not be a good use of time if you’re not planning on selling the business now. You’re also at risk of giving away competitive information about your product roadmap. Engaging in this would put a bigger target on your back.
    • You should only talk to Corporate Dev if you’re looking to sell the business now (either the company is doing really well or really badly). See Paul Graham’s full article here.
  • If the outreach is from Product Teams seeking guidance on integrating open source components into their product, it doesn’t require a meeting. Kindly ask them to read the open source documentation and let you know if they have any questions.
It may be beneficial for the competitor to engage with the open source project assuming they’re also making contributions to the project and doing their own engineering work. Again, you don’t need to take a meeting for the competitor to integrate the open source project into their product.

Tech stack recommendations

  • AWS for hosting the platform.
  • Github for publishing the open source code.
  • There is no current recommendation for hosting the front end of the website. Netlify and Github Pages are some possibilities.
 
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Tech Stack Recommendations