Open Source: What it Is and How it Works

An open source software (OSS) license refers to a license that allows the source code of a software program to be made available to the public. This allows anyone to view, modify and distribute the software and its source code, subject to the terms specified in the license. Open source licenses promote collaboration, sharing and community-driven development. There are several types of open source licenses, each with its own specific terms and conditions.

Open source licenses enable software to be developed in a community-driven manner, and they often facilitate innovation and collaboration. However, they can also be complex, and it’s important for developers and organizations to carefully consider the terms and implications of the license they choose for their software.

This article explores the benefits and risks of OSS for startups. While the use of OSS can offer significant advantages, such as cost savings, rapid prototyping and community support, there are also risks associated with its use, such as license compliance, security vulnerabilities, quality and reliability, support and maintenance, integration challenges, scalability issues, abandonment and dependency risks, intellectual property risks, and data privacy and regulatory compliance. To mitigate these risks, startups need to have a clear open source policy that covers the selection, integration, maintenance, contribution and compliance related to OSS. Seek legal counsel when necessary. By doing so, startups can benefit from the many advantages of OSS while mitigating the associated risks, and building a more collaborative and innovative culture.

Benefits of Open Source

Startups can gain a variety of benefits from using OSS. Here are some of the key advantages:

  • Cost Savings. Many OSS options are available for free, which can significantly reduce the upfront costs for startups. This is especially important for startups that often operate with limited budgets.
  • Rapid Prototyping and Development. The availability of open source libraries and frameworks allow startups to quickly prototype and develop their products without having to build everything from scratch.
  • Customizability. OSS usually allows for greater customization compared to proprietary software. Startups can modify the source code to tailor the software to their specific needs, which can be crucial for innovation and differentiation.
  • Scalability. Open source solutions are often built with scalability in mind and can be adapted more easily as the startup grows. Moreover, the availability of the source code enables more in-depth performance optimizations.
  • Avoiding Vendor Lock-in. By using OSS, startups avoid being locked into a particular vendor’s ecosystem. This provides greater flexibility in choosing solutions and prevents dependence on a single provider’s pricing or development roadmap.
  • Security. While OSS can have vulnerabilities, the transparency of the code allows for community review and rapid patching. The ability for anyone to inspect the code can often result in more secure software in the long run.
  • Community Support. A large and active community often supports popular OSS. This community can be a valuable resource for solving problems, sharing ideas and even contributing to the startup’s project if it is also open source.
  • Talent Attraction. Engineers and developers often appreciate working with open source technologies. By using and contributing to open source, a startup can attract talent who are passionate about openness and collaboration.
  • Longevity and Continuity. Even if the original developers of an open source project abandon it, the community can continue to maintain and develop the software. This ensures that the software can have a longer life span than proprietary software that relies on the viability of a single company.

OSS can provide startups with a cost-effective, flexible and community-supported foundation to build and grow their business. However, it’s important to carefully consider the open source licenses and manage the associated risks, as discussed below.

Risks of Open Source

While using OSS can offer numerous benefits to startups, there are also certain risks associated with its use. Here are some of the key risks that startups should be mindful of:

  • License Compliance. Not adhering to the terms of open source licenses, especially those with copyleft provisions, can result in legal issues, fines or forced disclosure of proprietary code. It’s crucial to understand and comply with the licenses of the OSS being used.
  • Security Vulnerabilities. OSS can have security vulnerabilities. Because the source code is publicly accessible, it can be exploited by malicious actors. Regular monitoring and patching are essential to mitigate security risks.
  • Quality and Reliability. The quality and reliability of OSS can vary. Some projects may not be actively maintained or might not adhere to best practices, which can lead to issues like bugs, performance problems or instability.
  • Support and Maintenance. Unlike commercial software that usually comes with a support service, OSS might rely on community support. This can sometimes be unpredictable or insufficient for critical business needs.
  • Integration Challenges. Open source tools may not always integrate smoothly with other systems, especially proprietary ones. This can result in additional development efforts and maintenance overhead.
  • Scalability Issues. While many open source solutions are scalable, some might not meet the demands of a rapidly growing startup. It’s important to assess the scalability of OSS early on.
  • Abandonment and Dependency Risks. If an open source project becomes abandoned or is no longer actively maintained, the startup may have to invest resources in maintaining it themselves or migrating to a different solution.
  • Intellectual Property Risks. Mixing open source code with proprietary code without proper separation or attribution can risk unintentional disclosure of intellectual property or proprietary algorithms.
  • Data Privacy and Regulatory Compliance. OSS might not always meet industry-specific regulations or data privacy standards. Customizing the software to comply with these standards may be necessary.
  • Hidden Costs. While OSS is often free, there may be hidden costs related to customization, integration, support and maintenance that need to be taken into account.

To mitigate these risks, it is important for startups to have a clear open source policy, continuously monitor and update the software, engage positively with the open source community, and seek legal counsel when necessary. It’s also advisable to have contingency plans in case critical open source components are no longer maintained or develop issues.

Open Source Safety

Using OSS in a company can be safe, but it depends on various factors such as the choice of software, the community behind it, how the software is maintained, and the practices your company employs in implementing and managing it. Here are some considerations to keep in mind:

  • Quality and Reputation. Before adopting an OSS, research its reputation and the quality of the code. Well-established projects with a large user base and active development are generally more reliable.
  • Check if the project has a history of promptly addressing security issues. Some open source projects may publish security audits or have been reviewed by third parties. Additionally, using tools to scan for vulnerabilities in dependencies can be beneficial.
  • License Compliance. Ensure that your company understands and complies with the licenses of the OSS you use. This is essential to avoid legal risks and to maintain good standing in the open source community.
  • Community and Support. A strong and active community behind an open source project is often a good indicator of its health. Such a community can provide support, updates and security patches. Sometimes, for critical applications, it might be wise to opt for commercial support if available.
  • Customization and Integration. OSS often allows for customization. Ensure that your company has the expertise to customize the software if needed and that it can be integrated properly with your existing systems.
  • Maintenance and Updates. OSS, like any software, needs regular maintenance. This includes applying security patches and updates. Establish processes for keeping the software updated.

Like with any software, have a backup and contingency plan in place in case something goes wrong. This might be even more relevant for open source projects that may not have the same level of commercial support as proprietary alternatives. OSS can be safe and highly beneficial for companies, but it’s important to perform due diligence, have clear policies, and take an active role in managing and maintaining the software. The openness of the source code can be an advantage in terms of transparency and flexibility, but it requires a responsible approach to integration and maintenance.


Copyleft is a licensing concept where any modified or derivative work based on the software must also be distributed under the same license, with the source code made available. This means if you incorporate copyleft-licensed software into your own software, you’re obliged to release your software’s source code under the same copyleft license. This ensures that the freedoms granted by the original software are preserved in derivative works.

Copyleft license are generally divided into two groups: “strong copyleft” and “weak copyleft,” which refer to the different degrees of restrictions imposed by open source licenses on the distribution and use of the software and its derivative works:

  • Strong Copyleft. Strong copyleft licenses require that any derivative work of the licensed software, including any software that links to it or incorporates it, must also be distributed under the same license with source code made available. The purpose is to ensure that the freedoms associated with the original software are preserved in all derivative works, promoting open development and preventing proprietary exploitation of the open source code. This effectively means that if you use a library or module that is under a strong copyleft license in your software, your entire software must also be released under the same strong copyleft license. GNU General Public License (GPL) is an example of a strong copyleft license.
  • Weak Copyleft. Weak copyleft licenses are more permissive and only require that modifications to the actual licensed software be released under the same license, but allow the software to be linked with proprietary code without imposing the copyleft terms on the entire combined work. The purpose is to strike a balance between promoting openness for the licensed software while allowing for integration with proprietary software, making it more adoptable in different scenarios. This means that you can use a library or module that is under a weak copyleft license in your proprietary software without having to release your own code under the same license, as long as you don’t modify the weak copyleft-licensed component itself. Or, if you do, you release those modifications under the same license. GNU Lesser General Public License (LGPL) and Mozilla Public License (MPL) are examples of weak copyleft licenses.

The choice between strong and weak copyleft licenses depends on the goals and intended use cases of the software project. Strong copyleft licenses are more restrictive and aim to enforce the open source nature of both the original software and all derivative works, while weak copyleft licenses are less restrictive and allow for more integration with proprietary software.

Top Open Source Licenses

The following are among the most widely used and recognized open source licenses:

  1. MIT License A very permissive license, it allows for reuse, modification and distribution with minimal restrictions; it only requires the preservation of the copyright notice and license text.
  2. GNU General Public License v3.0 (GPL-3.0). A strong copyleft license that requires derivatives and redistributions to be licensed under the GPL; it also includes clauses to protect against patent infringement claims.
  3. Apache License 2.0. Similar to the MIT License in permissiveness but also includes an explicit grant of patent rights from the contributors to the users; it stipulates that modifications must state that they were made.
  4. GNU General Public License v2.0 (GPL-2.0). Similar to GPL-3.0 but without some additional protections regarding patents; some projects have continued to use this version for historical reasons.
  5. BSD 3-Clause License. Similar to the MIT License but with an additional clause that prohibits the use of the name of the project or its contributors for endorsement without permission.
  6. GNU Lesser General Public License v3.0 (LGPL-3.0). A more permissive variant of the GPL, allowing linking with non-GPL code. Derivative works of the LGPL-licensed code must be licensed under LGPL.
  7. BSD 2-Clause License. Similar to the 3-Clause BSD License but without the non-endorsement clause; it is one of the most permissive licenses.
  8. Mozilla Public License 2.0 (MPL-2.0). A weak copyleft license that allows the code to be combined with code under other licenses but requires the MPL-licensed files to be open-sourced under MPL.
  9. Eclipse Public License 2.0 (EPL-2.0). A license mainly used by projects under the Eclipse Foundation, and similar to LGPL in terms of allowing linking to libraries without the entire application needing to be open-sourced.
  10. GNU Affero General Public License v3.0 (AGPL-3.0). Similar to GPL-3.0 but with an additional clause, it requires network-based services using the code to provide access to the source code.

Open Source Policy

An open source policy at a startup is a set of guidelines and procedures that govern how the company uses and contributes to OSS. It covers various aspects, including the selection, integration, maintenance, contribution and compliance related to OSS.

Start with a solid plan on using OSS in your company. Lacking a plan leads to haphazard integration of software components, and you’ll be blindsided by licensing issues. The antidote? Strategize early, draft a crystal-clear open source policy, communicate it to your engineers and enforce it rigorously.

Your policy needs to instill confidence in investors and acquirers. Show them you’re in control by actively managing risks. Don’t create this policy in a vacuum; collaborate with legal, business and engineering teams. Everyone’s input matters in crafting a policy that truly reflects the organization’s needs.

Act early. If you drag your feet and let development outrun policy-making, you’re in for a world of pain. You’ll be backtracking to see what’s been used and scrambling to fix or ditch non-compliant components. If you’re in the thick of raising funds or an acquisition, it’s double trouble.

Bottom line: Be proactive, be clear and keep everyone involved. Your open source policy is your playbook; know it and live it.

Here are the key components and the importance of an open source policy in a startup:

  • License Compliance. The policy should outline the process to ensure that the startup complies with the licenses of the OSS it uses. This is important to avoid legal risks and to maintain good standing in the open source community.
  • Selection and Approval. The policy may include guidelines for selecting OSS, ensuring it is actively maintained, has a strong community, and meets security and quality standards. This is important for the reliability and security of the products or services the startup offers. A smart move is to have a “white list” of approved licenses. If engineers want to deviate from this list, make sure there’s a procedure for securing business and legal green lights.
  • Security Practices. The policy should include security practices such as regularly monitoring for vulnerabilities in open source dependencies and applying patches. This is important to protect the startup’s and its customers’ data, and to maintain trust.
  • Contribution Guidelines. If the startup contributes to open source projects, the policy should include guidelines on how employees can contribute, what approvals are needed and how intellectual property is handled. This is important for protecting the startup’s interests while fostering a positive relationship with the open source community.
  • Integration and Customization. The policy should guide how OSS is integrated and customized to ensure compatibility with the startup’s systems and compliance with regulations. This is important for the smooth operation and legal compliance of the startup’s services.
  • Documentation and Attribution. The policy should ensure proper documentation of the open source components used and attributions as required by the licenses. This is important for transparency and license compliance.
  • Legal Review and Clearance. The policy should establish a process for legal review and clearance for using or contributing to open source projects, especially for critical components. This is important for mitigating legal risks.

Having a well-defined open source policy is important for startups as it helps in managing the risks associated with using OSS, ensuring legal compliance, maintaining security and quality standards, and building a positive relationship with the open source community. It also helps in aligning the team members and establishing clear procedures for efficient and responsible use of OSS.

In conclusion, OSS can provide startups with a cost-effective, flexible, and community-supported foundation to build and grow their business. However, startups need to be mindful of the risks and challenges associated with OSS, such as license compliance, security vulnerabilities, quality and reliability, support and maintenance, integration challenges, scalability issues, abandonment and dependency risks, intellectual property risks, and data privacy and regulatory compliance. Startups should implement a clear open source policy that covers the selection, integration, maintenance, contribution and compliance related to OSS, and seek legal counsel when necessary. By doing so, startups can benefit from the many advantages of OSS while mitigating the associated risks and building a more collaborative and innovative culture.

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