Need help understanding Bitcoin DeFi?
Need help understanding Bitcoin DeFi?
Need help understanding Bitcoin DeFi?
Need help understanding Bitcoin DeFi?
Need help understanding Bitcoin DeFi?

The Advantages of Being an Open-Source Company in Web3

At Hiro, we make open-source products, and we believe that’s a competitive advantage.

Deep dive
May 10, 2022
Open Source Advantages

The Internet is built on the backbone of open-source software. Every single digital interaction and transaction, from mobile phones to in-flight entertainment, is enabled by open-source software.

I am lucky to be a CTO at a startup in an age where it is easier than ever to embrace the internet’s open heritage and start an open-source business. There’s a plethora of open-source packages and tools to set up and scale your business. Those blueprints exist and have been battle-tested. You don’t need to build an entire codebase from scratch.

Being open source is a reasonable default for today’s startups, and the values of Web3 only strengthen that belief.

Web3 as an Open Network

A meme of Web3 and open source shaking hands

At Hiro, we operate in Web3, a space that embraces transparency from both a technical and cultural perspective. Blockchains are public ledgers. The code is open and publicly available to everyone. Blockchains are, by definition, an open-source technology.

In crypto, people often expect things to be open source. There is a desire to see what’s going on in the code, particularly if you are considering trusting your assets with it: one is more likely to trust their assets with code that anyone can view or audit as opposed to believing the developers when they say “just trust us.”

To be clear, not every Web3 ecosystem embraces open source, but the Stacks ecosystem, which creates Bitcoin applications, has taken that ethos to heart. At the protocol level, by design, the source of every smart contract is human readable and accessible on the blockchain. Anyone can go and inspect the code. Instead of “trust, but verify,” we believe in “verify—no need to trust.” 

Anyone can go and inspect the code. Instead of “trust, but verify,” we believe in “verify—no need to trust.” 

Open source is a core part of Web3’s identity, and as Web3 grows, so too will the number of open-source companies building in it.

Web3 Presents an Opportunity for New Business Models

With so many open-source tools available today, there’s no better time to build than now, and Web3 presents a new opportunity to founders. We are no longer limited to the business models that were successful at scale in Web2, such as advertising, subscription or support-based models.

In Web3, the structure of startups is often different. Blockchains provide a way to encode incentives in code, and tokenization allows all stakeholders to have skin in the game. Together, this opens up new business models, where incentives are better aligned for end users and builders alike. For instance, Web3 has unleashed a flurry of experiments in the creator / passion economy, allowing creators to engage directly with their fans, and support themselves financially while doing so. 

That puts technology executives in a uniquely well-suited position to decide what kind of codebase we want to have: do we want something that is open to the public? Or closed? 

At Hiro, we have chosen to create open-source products, and we believe that is a competitive advantage.

Why We Believe Open Source Is a Competitive Advantage in Web3

Creates Transparency

Transparency by itself is a virtue. It creates more trust and honesty between the company and its users, and it aligns us with the principles of Web3. Even if users don’t look at the source code, there’s value in knowing that they can. It creates a sense of “what you see is what you get,” and I think that is a valuable principle to establish in any relationship, particularly in a decentralized world without custodians.

If code is the lynchpin of the relationship between two parties in Web3, then I believe both parties should be able to look at that code, just like both parties would review a legal contract before signing it. At the end of the day, that is exactly what we are talking about. A smart contract.

If code is the lynchpin of the relationship between two parties in Web3, then I believe both parties should be able to look at that code.

Attracts Job Candidates

A lot of people want to work on open-source projects. Opportunities to work on open source as part of your day job are few and far between, and most OSS projects are maintained by volunteers during nights and weekends. We’ve found during the interview process that working on open source is often important to candidates. Open source resonates with many developers, and we’ve won a few hires on this fact alone. They take pride in contributing to open-source code. We get that. We take pride in it too.

Strengthens Community

Open source is also a powerful way to connect with the community and gives them more avenues to participate and engage with us. We’ve found that our developer community is incredibly engaged with us. Whether it’s documentation, one of our products, or any number of other projects, the fact that our code is open source invites dialogue, and we’ve had the community make important contributions to a number of projects as well as provide feedback via bugs and feature reports. This helps us create a tighter feedback loop with our customers.

Code Is Not Your Competitive Moat in Web3

There’s a common misconception that being open source puts the company at a disadvantage. This is the wrong approach in Web3. When most of the ecosystem is open source, you can’t rely on code as a moat that will help you win customers or beat competitors.

Rather, I think a competitive moat is defined by other things. For example, a company’s moat may be its ability to run things at scale and its operational expertise. Another company’s competitive moat could be the strength of its community.

Framed another way, one lens at which to look at the Web3 landscape today is that looking at the technical proficiencies and deficiencies of code alone is not enough to separate your business from your competitors. At Hiro, we want to build our moats around community, operational excellence and ultimately focus on creating value rather than creating proprietary code. I think other companies today are realizing this too and becoming more comfortable with being open source to attract the best developer talent.

Contributing to an Open Legacy

Most software companies wouldn’t exist without open-source software. We are standing on the shoulders of open-source giants. Most of what developers build today has open-source dependencies, and that is especially true for us in Web3. As an ecosystem, we believe supporting open source is important. Shout out to our friends over at the Stacks Foundation, which supports Bitcoin development at Brink.

We want to continue with the open-source tradition and allow other people to build on our tools when appropriate too. This is why we are an open-source company.

If you’re excited about contributing to an open-source world, we’re hiring! We also welcome contributions from our community on GitHub. You can see our code and join us here, and you can find a number of great first projects to tackle here if you want to contribute.

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