Open Source Risk and Investment

AESTE was engaged by Cradle Fund Sdn Bhd to help with a problem that they have been having recently – open-source. Cradle is a Malaysian government agency that focuses on pre-seed funding for start-ups. While they cover a wide variety of fields, they have been getting more and more applicants who are doing open-source, in one way or another.

However, since most of their people are investment analysts and not software developers, they are not sufficiently familiar enough with open-source. As a result, AESTE was engaged to provide some training in open-source. The objectives that I structured for them was to:

• Learn how to legally use open-source.
• Understand issues on open-source compliance.
• Appreciate open-source sufficiently to make an investment decision.

So, I went to their offices at PNB Darby Park today, for our first day of training. They fed me their requirements before-hand and I designed the training into 6-parts split over two days:

1. Introduction to Intellectual Property and Copyleft
2. Open-source License and Compliance
3. Open-source Risk and Mitigation
4. Open-source as a Development Model
5. Open-source as a Business Model
6. Open-source as a Marketing Model

On the first day, we covered the first three parts, which basically introduce the whole concept of free and open source, copyleft. We also covered IP law in relation to Malaysia, US and EU. Finally, we examined the risk exposure of local companies and how some of these risks can be mitigated, within the local Malaysian context.

Essentially, I collated the relevant laws, open-source licenses and summarised them into three bullet points for each topic. It took me a while to actually prepare the training material, but it was worth it as the participants appreciated the fact that I could distill all the legal issues into layman terms.

Things started off well and the feedback at the end of the first day was largely very positive. In fact, the number of participants swelled in the middle of the training, which I took as a good sign. The training was originally prepared for about 16 people but things grew as additional tables and chairs were brought in a few hours into the training. Another good sign was that no one fell asleep.

On our second day and I gave them some good advice on using open-source as a development, business and marketing model. It is also part of their job to provide some advice to potential investees. So, I see it as an opportunity for them to advice others in the use of open-source within a business context.

The second day had more involvement from the participants. Although this was not a work-shop, there were more questions on this day and I took it as a good sign – that they are actually trying to understand the whole concept and how it can be applied to business. I had to correct a few common misconceptions but things went well.

Also, they took the opportunity to present a couple of cases to me and I gave them my expert opinion on some of these business ideas. I also handed out my name cards and encouraged them to contact me if they need to clarify anything.

Hopefully, this will see more Open-Source startups and investments within Malaysia. We need an ecosystem!