Ping Li, Partner at Accel, argues that open source can be an effective business model for some startups although not all startups. Li argues that the key value of an open source model is not the collective input of a broad contributor base--the reality is that the application creator almost always puts in a great deal more effort creating the application than the community. Rather, the value of an open source model is free distribution across a broad base of contributors and users without costly sales forces or overhead. However, monetization of an open source model is a little different as it requires offering optional value-add features that users may want.
Nov 28, 2007