Open sourcing marketing: Loopfuse goes live

Yesterday, one of the industry’s most interesting open source startups launched: Loopfuse. Founded by open source veterans Roy Russo (JBoss Portal) and Tom Elrod (JMX, JBoss Remoting), the company is designed to innovate on the work that proprietary vendors like Eloqua have done:

Namely, make lead/demand generation tick, but this time as an open source project.

What do I mean by demand generation? Here’s a nice schematic that explains it:

If you’re an open source company and you’re not using technology to do this, you’re achieving maybe 1% of what you could be doing. JBoss’ success in turning downloads into dollars was in large part a credit to its innovative use of Eloqua. But there’s no use to slum with proprietary demand generation technology when you can use Loopfuse.

Roy writes:

Applying open source business models and development methodologies to middleware have seen increasing popularity in recent years. Needless to say, the model has worked with notable companies such as JBoss, Red Hat, Pentaho, Hyperic, and others. Of course, it takes more than just an open source business model to stay in business. These companies all needed sales to close deals, and in turn, sales needed marketing to provide qualified leads. One thing all of these companies have in common is efficient marketing and sales teams, powered by Demand Generation Technology. The use of demand generation, allowed these companies to scale quickly by providing increased ROI in marketing and increased efficiency in sales, via automation of the lead qualification and nurturing process. In essence, sales personnel aren’t wasting their time on cold leads, and marketing isn’t wasting time trying to corral leads that “leak” out of the sales funnel.

I recently wrote an article that mentions why Open Source Companies are uniquely positioned for maximizing demand generation technologies….In essence, these companies have been able to identify and “upsell” their community in to their support, training, and consulting services. The unique position of OSS companies relying heavily on their community, makes demand generation a high-value proposition for them, and a near-necessity to any OSS company wishing to tap in to its user-base.

I’m an advisor to Loopfuse, and so of course biased. But I’m an advisor to Loopfuse because I think this is one of the most interesting open source companies to come along in a long, long time. At Alfresco, we considered using Eloqua, but the price is ridiculously high (though even here, the cost of expensive demand generation software is still cheap compared with going without – it really is a requirement for any serious software company, and particularly open source software vendors), and you don’t start deriving value from it until you fork out a lot of money. Loopfuse short-circuits this broken business model by giving users immediate access to the code and, hence, a return on investment.

Again, I shouldn’t bag on proprietary demand generation technologies. They are a much better investment than no demand generation at all. But when your initial investment can be $0.00, as it is with Loopfuse, so that you can measure your financial investment in the software against real results, I just think that’s a better model. Get before you give. That’s the promise of open source.

No open source software company should operate without demand generation software of some kind. There’s no point in generating downloads if you don’t know how to turn those into dollars. Loopfuse can help.