If you write code and develop software for a living, or on the side for amusement; or if you’re a technology enthusiast who’s followed and kept up with the evolution of software technology and coding, you’d know how big a deal the Open Source Software Movement is. For those of you who aren’t aware: programmers who support this concept contribute to the open source community by voluntarily writing, sharing and exchanging programming code. The open source community builds from this in that anybody can edit and (re)share software.
What Is Omniref?
Omniref, founded by Tim Robertson and Monatana Low in 2013, is a code reference tool. ‘Sticky notes for code’ is how they described it. Omniref itself is not open source; it is more of an annotation service for open source software. The tool was well appreciated and accepted by developers who believed in the philosophy of open source. Omniref essentially makes it easier to find what you’re looking for and add notes to software for it be more accessible.
Omniref in trouble
Part of Y Combinator’s winter batch of 2015, Omniref stopped taking registrations earlier this month. On December 21st, founder Robertson announced that they would be shutting down by the end of January 2017. The main reason cited was lack of revenue generation. The company had raised a round of funding in 2014.
While developers and smaller scale startups found Omniref extremely useful, the founders eventually realised that the business model was not feasible to support the amount of money, time and effort it took to actually run the service. In anticipation of a probable shut down, Omniref had stopped charging renewal fees for paying customers. The big challenge the team and its users will face is exporting their data and code to another platform. While Omniref has not offered any substantial details of its struggle to generate sufficient revenue, we should be seeing a more detailed blog post from Robertson soon.
Far too often, it happens that a startup actually builds something useful, finds loyal early users, and everything looks great, but finding the right business model ends up being the hard problem that ultimately remains unsolved.
There are a number of things to consider:
- What part of the service can be given away for free?
- What features can we charge for?
- How do we get people to try the free offerings?
- How do we encourage them to switch to paid offerings?
- Most importantly, how to ensure the value of our offerings, as perceived by users, at least approximately matches the amount that we charge them?
By all accounts, Omniref had a promising start, and they certainly built something useful, but ultimately, finding paying customers and charging them enough to offset their operational costs proved to be an insurmountable challenge. As Sam Altman, the president of Y Combinator says: “… you have to get people to pay you more money than it costs you to deliver your good/service. For some reason, people always forget to take into account the part about how much it costs to deliver it.”