For the past few weeks, we’ve been talking about the trials and tribulations of cloud providers. Too few and you’re mired in monopoly. Too many and you’re cornered by complexity. What’s a modern software company to do? I believe there’s a better way, one that avoids the typical trajectory of other members of its class…which will benefit customers who are frustrated with the current cloud landscape.

So here it is, our big belief: open core products don’t have to have a thick proprietary layer around the open core to be profitable. 

But before we can draw this conclusion, we have to understand the normal path for a startup like ours.. It goes something like this: Company A is started by some developers, and they have a really permissive open source license. Things are going well, but eventually their growth hits a wall, and the sales team starts complaining. Their conclusion is that Company A should invest more in differentiating their  commercial product from their own open source core, and ship less innovation to  open source. Company A has just stepped off the golden path, and onto the proprietary product path. And there is usually no going back.

It’s not a surprising story. We’ve seen it over and over. Some open source projects simply don’t support building a $100M ARR commercial product (i.e. a unicorn). 

But at Tembo, we’re changing the narrative.

“But how? Aren’t you just another open source solution?” you say, with understandable skepticism. Yes and no. First, we humbly acknowledge that it’s impossible to build a company where 100% of value comes from open source. That’s not our goal. Our goal is to stay as close to that as possible, to derive most of our value - apart from support, customer success, metering, billing - from our open core. Our open core engine (https://github.com/tembo-io/tembo-stacks) has a fully permissive Postgres license…and that is truly open source. 

Now, the question is: how can we build guardrails into the company to  prevent future leaders from making the decision to begin “differentiating” our commercial product from our open source alternative, as so many open core companies have before us?

Tembo has ~200 managed Postgres products as competitors , and some have $1B+ revenue, so it’s David vs. Goliath. My ultimate goal is to ensure Postgres wins as a result of our work, even if our company fails. If we can pull this off - proving that there is a viable way to stay on the golden path - we’ll be doing a service for future technical founders of the world by demonstrating that it is possible to avoid sabotaging your own open source products. I believe that developers have a very keen sense of when a company “goes bad” and heads down a dark path, and they will be highly attracted to using a company that has set themselves up to be unable to walk down that dark path.

But it won’t be easy…More on that next time.

Ry’s Weekly Resources

Thanks for reading. If you have questions you’d like me to address, reply to this email and I’ll do my best to answer them in future emails.

Sincerely,

Ry Walker
CEO @ Tembo.io

Want to take things further?

Tembo is the Postgres developer platform for building every data service. Our mission is to collapse the database sprawl of the modern data stack with a unified developer platform. With Tembo, developers can quickly create and deploy specialized data services using Stacks, pre-built Postgres configurations, and deployments without complex builds or additional data teams.

Join our private beta waitlist her