Thursday, June 01, 2006

Open source and RFP time sinks

If you're an open source vendor, you already know this. If you're an aspiring or new vendor, let me save you some time:

Don't bother with RFPs. Bother even less with RFIs.

RFIs (Request for Information) and RFPs (Request for Proposal) are, of course, the bread-and-butter of typical enterprise sales forces. Pipelines are built with them. Castles in the sky are built on them. Etc.

In the open source world (at least for young open source companies), if the prospect hasn't downloaded, installed, and evaluated your software, you can't afford to submit a 35-page response to a would-be customer's questions. You have better things to do. Like write software.

You've got to save on sales and marketing costs. In open source "sales teams," we tend to have 1-2 people involved in any given deal: inside sales and a sales engineer. In the proprietary world, you've got a small army of sales engineers, inside sales, direct sales, contracts specialists, lawyers, etc. etc. etc. So, in the open source world, you can't afford to spend time with 10% probabilities - you need to work with prospects that are 30-40%+. These are people that have downloaded and tried your software.

Every open source company goes through initial euphoria at participating in a massive RFI/RFP. The good ones quickly realize these aren't worth the time, at least not in the first 1-3 years of a company's existence (and maybe not ever). Products never sell themselves, completely, but if you're not relying on the product to get you at least 30% of the way there, you're spending too much on sales.

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