Open Source, Consulting and Building SaaS Products

I was browsing Hacker News the other day, and ran across this article, lamenting how difficult it was to support a company with an open source project and that insomuch as one could, consulting generated far more revenue than selling SaaS services like hosting.  For the record, I’ve never touched LocomotiveCMS.  From a brief glance, it looks nice.

While I feel for them, I think that they have alternatives:

• Sell premium support.  Right now, it appears the only way to get premium support is to host with them, and it seems that many clients are more interested in self hosted solutions.  Makes sense–if you are a rails developer (the target market for this CMS) you already have a hosting solution.  But if premium support was offered separately, they could hire someone (possibly part time) less skilled than Didier, the primary developer, and have them take care of tier 1 support.  And still offer a warm fuzzy feeling for harder problems, which would escalate to Didier.  Companies like to pay for that kind of service, even if they don’t always use it.  This strategy would also decrease the amount of revenue needed to hire someone to help Didier (customer server folks are less expensive than developers).
• Sell an ebook (or a couple).  These are far easier to create and sell than a SaaS product.  (I use leanpub!)  It could be an ‘authoritative guide to LocomotiveCMS’ or just focus on one part.  Since Didier knows which questions he often answers for people who have paid him money, he’s probably got a very good idea of where the pain points are.
• Someone suggested this in the comments, but a marketplace for plugins to LocomotiveCMS seems like a natural way to go.  Again, i don’t know that community, and marketplaces for CMSes can be hard to kick start, but this is worth evaluating.
• I’m sure there are others.  Here’s an exhaustive list of business models, courtesy of the AVC community, so if I were them, I’d review and see what was a fit.

In my comment on the HN post, I talk about how products often face a “round peg in an elliptical hole” problem. I meant that products often solve 80% of the problem for 80% of the users.  They also require users to change their processes (more crystallization).  Typically there’s just enough offset that people feel cognitive drag.  (Of course, the same thing usually happens with custom solutions, you just don’t know that until you are done.  Doh!)

Especially in crowded markets, like CMSes, it is far far easier to sell enough hours to make a living customizing a solution than it is to sell enough products to make a living.  Brennan Dunn covers this ground well.  Every consulting company I’ve ever seen or been a part of, and every consultant I’ve ever known (except the ones who were contracting for one client and really were employees with more flexibility), dreams of transitioning from non scalable consulting by the hour to scalable product sales.  One friend even had a name for it–the “von MacIntyre machine”, which would make money while he slept.

But it’s hard.