In the world of software development, the open-source model has become a powerful force for innovation and collaboration. However, as more companies embrace open-source, some have adopted strategies that, while profitable, often take advantage of the community in ways that undermine the spirit of open source.

One common strategy is the use of dual licensing with the AGPL (Affero General Public License). This approach can appear community-friendly on the surface, offering a free, open-source product while also providing a paid proprietary license. However, many companies employ the AGPL strategically to scare off larger organizations with its legal ambiguities, pushing them towards purchasing the proprietary license. These companies may claim to support open source, but in reality, they often contribute very little back to the community, using the AGPL more as a marketing tool than a genuine commitment to open-source principles.

If you’re looking to build a software business without falling into the traps of open-washing, open-core, or closed-source strategies, there are alternative approaches that allow you to be both profitable and ethical:

1. True Open Source with Support and Services Offer paid support, consulting, and custom development around your open-source software. This model respects the open-source community while providing a steady revenue stream.
2. Freemium Model with Open Source Core Keep your core software fully open-source, but offer premium extensions or a SaaS version with added features. This ensures the community benefits while providing options for paid upgrades.
3. Community-Driven Development with Sponsorship Encourage community contributions and use platforms like Open Collective or GitHub Sponsors to allow users to financially support your project, aligning your success with the community’s.
4. Ethical Productization Bundle your open-source software with ethical products or services, such as privacy-focused tools or eco-friendly hosting, appealing to customers who value ethical business practices.
5. Certification and Compliance Services Develop certification programs or offer compliance auditing services that help companies use your software effectively and legally, creating value-added services without restricting access to the core product.

These strategies allow you to build a successful software business while staying true to the principles of open source. By focusing on transparency, community engagement, and ethical practices, you can create a business that thrives without exploiting the very community that supports it.