In this week's episode, Avi and Matt Talk with Heroic Labs CEO Chris Molozian and the Head of Developer Relations at Heroic Labs, Gabriel Pene. Heroic labs did not start as an #opensource company but moved to #opensource later in the company's lifecycle. Learn about some of the reasons why they made the switch, how they are currently using open source, and how open source has become critical to their product strategy. We discuss how they measure success in the open source space and what surprises they faced along the way.
Checkout our other interviews, clips, and videos: https://l.hosbp.com/Youtube
Don’t forget to visit the open-source business community at: https://opensourcebusiness.community/
Visit our primary sponsor, Scarf, for tools to help analyze your #opensource growth and adoption: https://about.scarf.sh/
Subscribe to the podcast on your favorite app:
Spotify: https://l.hosbp.com/Spotify
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Buzzsprout: https://l.hosbp.com/Buzzsprout
In this week's episode, Avi and Matt Talk with Heroic Labs CEO Chris Molozian and the Head of Developer Relations at Heroic Labs, Gabriel Pene. Heroic labs did not start as an #opensource company but moved to #opensource later in the company's lifecycle. Learn about some of the reasons why they made the switch, how they are currently using open source, and how open source has become critical to their product strategy. We discuss how they measure success in the open source space and what surprises they faced along the way.
Checkout our other interviews, clips, and videos: https://l.hosbp.com/Youtube
Don’t forget to visit the open-source business community at: https://opensourcebusiness.community/
Visit our primary sponsor, Scarf, for tools to help analyze your #opensource growth and adoption: https://about.scarf.sh/
Subscribe to the podcast on your favorite app:
Spotify: https://l.hosbp.com/Spotify
Apple: https://l.hosbp.com/Apple
Google: https://l.hosbp.com/Google
Buzzsprout: https://l.hosbp.com/Buzzsprout
OSS Business Podcast - Episode 2
[00:00:00] Matt Yonkovit: Hello, everyone. Welcome to another episode of the hacking, the open source business podcast. , I am one of the co-hosts Matt Yonkovit and I'm here with Avi press my other co-host. And today we are joined by two gentlemen from heroic labs, Chris and Gabe, Gabe, maybe tell us a little bit about yourself, what you do at heroic labs. and maybe give us the little, overview of what heroic labs is.
[00:00:25] Gabe Pene: Sure. Uh, I mean, for the overview of heroic labs, I think you probably want to go with Chris. Uh, he's been there for in the beginning.
[00:00:32] I've been with heroic about a year and a half at this. I'm now the head of developer relations. I started out as a technical writer. Um, so basically I manage, both our developer related content and our community initiatives.
[00:00:47] Matt Yonkovit: Awesome. And Chris, maybe if you could give us that overview of heroic labs and, uh, sure.
[00:00:52] Tell us a little bit about yourself.
[00:00:54] Chris Molozian: Yeah, absolutely. So I'm one of the co-founders and, uh, uh, engineers at [00:01:00] heroic. We have been in the industry about seven years. Um, we put together a collection of pieces of game tech tooling. mostly orientated on, on server tech that helps game studios build and publishers build social competitive and real time games.
[00:01:18] and we've been doing that through a mixture of open source, uh, and uh, some of our history that we might go over together today. , before we went open source. okay.
[00:01:28] Matt Yonkovit: Okay. When you talk about like that, those kind of core game components, can you give maybe a couple examples of things that you help with there?
[00:01:34] Like, it'd be really interesting. I'm
[00:01:36] Chris Molozian: curious. Okay. Absolutely. So if you think about a, uh, a game tech stack mm-hmm that every studio wants to achieve, um, typically you could kind of carve it into a few major components. You've got everything that goes into the core game. And sometimes what we call the matter gameplay.
[00:01:56] And those are the things that might be social features, friends, Guild [00:02:00] systems, leaderboards. It could be competitive stuff like matchmaking, um, multiplayer, you know, asynchronous, um, matching logic for, you know, discovering opponents for ghosting and other APIs like that. And then finally it can be your core capabilities around social sign-in user accounts.
[00:02:19] Okay. Cloud. Uh, everything that allows a game to be server based. Um, that's one piece of it. The next piece that goes into that game stack is what we call live ops. Uh, and that's a collection of tooling that enables you to do analytics on the game. Do experimentation. Generate audiences so that you can do targeting, um, and therefore do segmentation on the player base, running live events.
[00:02:45] So creating some kind of content cadence for players, maybe, uh, seasonal events like Christmas and Easter and, uh, weekly and, and monthly events. That might be what you call these days, the season pass or the battle pass. Um, that's another piece of it, but [00:03:00] there's overall within that game stack there's 3, 4, 5 different major pieces, um, that we help game studios achieve that enables them to ship huge and highly successful scalable games.
[00:03:13] okay. And
[00:03:15] Matt Yonkovit: so did you start this a as an open source company? Or did you, you mentioned that there was some non opensource and you eventually went opensource. Uh, I'm curious on
[00:03:22] Chris Molozian: that. Yeah, so we, we were part of the wide Combinator, summer 2015 batch. So a few years ago now, but as part of our, I guess, thesis or vision, um, for joining Y Combinator was the pitch that we were gonna provide sort of mobile backend as a service.
[00:03:42] So. Parse or fire base style capabilities to game developers with that sort of specialist focus on game APIs, you know, APIs that are frankly difficult to express on mobile app tooling like Firebase and, and you [00:04:00] know, when pars did exist, pars, you know, things like leaderboards and matchmaking, they become extremely expressive and therefore complex to query.
[00:04:11] Which tends to make them a bad fit for your more classic, uh, mobile backend as a service model. So we. Pitched to Y Combinator and then later to the industry that, um, we should be providing subject specialist, uh, within gaming, due to some of our backgrounds in working on, on games. Um, you know, for various studios over the years, we, we thought we could solve this problem with a specialist focus on game tech.
[00:04:37] Um, And that's where we started. So it was actually not an open source project. It was a software as a service business model. So think Twilio or think, um, send grid. It was, you know, get your developer dashboard token, drop it into your SDK and start making API requests to store your data.
[00:04:58]
[00:04:58] Avi Press: you know, I would definitely want to dig into [00:05:00] the, this transition from, the venture backed model into, , open source alongside of that. And so I'm curious when you, at the point when you joined, why Combinator, um, have you already built out the prototype of the product? Like where was the product at when you, when you decided to go that route?
[00:05:16] Good
[00:05:16] Chris Molozian: question. We we'd already built out the first version of our game tech. and we had done so as a, we were an I airline team. So we'd done. So using Iline, uh, and Alexa, um, this is a, you know, few years ago before Alexa became as popular as it is as a language today. Um, and we built it out using those tools, um, because we knew that we could achieve the kind of scaling model that you need for sort of high velocity, social networking, style gameplay.
[00:05:46] Um, and that's what we entered into. Why combined. and it wasn't actually at Y Combinator. It was more after that phase of the journey where we were working with game studios, we were [00:06:00] talking to them quite extensively. We were, you know, helping them integrate and adopt our technology in not too dissimilar fashions the way the team at pars did it.
[00:06:09] You know, I know I Suka a little bit from, uh, from YC. They were also a Y Combinator company, um, from. Before us few years before us. Um, and so we were doing this sort of integration work of that nature to help activate and onboard game teams. But along the way, one of the big questions that kept coming up is what happens if.
[00:06:28] You guys disappear. What happens to the technology? How do I support my game? If this infrastructure becomes unavailable to me, for whatever reason, maybe an acquisition or maybe, um, you know, for various other reasons, we pivot into a different, maybe we pivot into being a studio. We decide to stop distributing the tech.
[00:06:46] You know, what kind of protections could we provide? For the kind of core game data that studios were gonna be relying on us for. Um, and that was a really difficult question to answer as a SAS company. Um, [00:07:00] because you know, you can never rule out wanting to, you know, depending on how you wanna grow as a business, you never wanna rule out what it might mean for an M and a event, but you don't optimize for an M and a event.
[00:07:10] And at the same time, you wanna make sure that your customers are as safe and protected as possible. So, you know, we approached it with contracts and we approached it with provisions, protection provisions and things like that. Um, but the frequency within which we heard, these kind of concerns, it just became too loud to ignore.
[00:07:29] Um, and at that point we had to rethink what, what we do and how we distribute our.
[00:07:34] Matt Yonkovit: and that brought you to open source specifically, um, or were, was there already a established kind of idea that you might want to explore the open source side? A little bit more.
[00:07:46] Chris Molozian: Good question. So what happened internally was we spent quite a lot of time, soul searching okay.
[00:07:55] How best do we, um, distribute our technology to, [00:08:00] um, Resolve and appease these kind of concerns, uh, and create the kind of breakout developer community success that really was us wanting to emulate pars, actually, cuz they have, even to this day, I still hear developers talking about how beautiful that developer experience was.
[00:08:18] So we still strive to achieve that together, um, at heroic and we looked at the market and we realized that our particular set of technologies. We're better positioned as what I tend to refer to as the core infrastructure category of tech. And I use the word core infrastructure because it's lives such at the heart of a business that you need to be able to depend on it in a way that you depend on database technology.
[00:08:44] Right? And if you look at database companies over the last decade, I can't think of maybe foundation DB is the only exception, but almost all of them. Are these days distributed through some kind of open source, open core business model. [00:09:00] And so that really was the motivation for us to pivot direction, but not pivot the capability set or the feature set of our technology, but really pivot the distribution model.
[00:09:11] Now while doing that, we actually chose to rewrite the technology as well. The motivation for that was I'd previously worked at a database company, uh, called basher technologies that build a database engine called Rak and, uh, Rak was written in Ilan and, you know, without wanting to be disheartening to the airline community, it's a very small developer community, right?
[00:09:37] Mm-hmm so the scope for contributions, um, is quite small. Uh, it's a very, very powerful communi uh, community, very dedicated community, but, uh, we wanted to. Uh, release our technology to a wider pool of potential contributors as well as adopters. And so we rewrote the technology from Iline into go into Google's go programming.[00:10:00]
[00:10:01] Matt Yonkovit: Okay. So when you did that, when, when you started that, that process, was it the idea that the commercial side would still be as a service and then there would be this open source, um, version that people could use? Is that how the monetization model was
[00:10:15] Chris Molozian: set up? Yeah. Good question. So we, we, we looked at the existing open source business models and I, I think there are only.
[00:10:25] Four that I'm aware of that are, that are strong. And I would say well-trodden, I don't know if they're well proven, but well-trodden ground at this stage. Um, the first one is the kind of poster child for all of this. It's your red hat support model, right? Mm-hmm I mean, if you talk to anyone that talks about open source and commercializing open source, somewhere, the support model around.
[00:10:47] uh, red hat comes up as an example, as a reference example. So red hat and the support model is one of them. The second one is the managed service model. If you look at every database company today, elastic search bought [00:11:00] found.no. You know, MongoDB built MongoDB Atlas, you know, at some point you build a managed service around your core tech, because there is a large portion, especially when the complexity of the technology is high.
[00:11:13] There's a large portion of developers that just don't wanna operationalize it themselves. Um, so you get that managed service model. Um, and we have that today in what we call our heroic cloud, but that's the second commercialization avenue. A third one tends to be somewhat consulting heavy. Um, you know, Ruby on rails has built a fantastic ecosystem of partners and, uh, consulting companies and digital agencies who have built.
[00:11:39] Their entire, um, revenue generation model around leveraging that technology contributing back to it. But using, you know, Jango is very similar to build these ecosystems, um, that allow you to, uh, to create sort of a revenue outcome and, and still be open source. Um, that's the third one that I know that we've [00:12:00] seen working quite well in the market.
[00:12:01] Um, and the fourth one is a split between licensing and open source. So you hold some set of capabilities back. And it could be a dashboard. It could be enhanced monitoring. It could be a bunch of tooling for the enterprise to do with, uh, you know, SOC two compliance and Copa compliance and things like that.
[00:12:21] And it could be any of those things, but they are things that, you know, the larger organizations are inevitably gonna need to be able to sign off on this technology use internally. And they. A commercial entity behind it that they can work with. So I'm model it's it's it's, it's what we call now. The open core model.
[00:12:42] Yeah. I think, um, open source software capital, call it COO, uh, COO SS, you know, commercialized open source software, but yeah, it's, it's what we call open core. Yeah.
[00:12:52] Matt Yonkovit: And so you are, are you pursuing all of those or? I, I know, I know you have a heroic cloud. .
[00:12:59] Chris Molozian: We [00:13:00] actually, yes, we have ended up, um, enabling because of the wide spectrum of different requirements and integration challenges within the games industry.
[00:13:11] We have ended up adopting, I guess, at least three of those really, um, So we don't really do much consulting. We're a product company. Um, so we, we, we don't really do much of the professional services side of things. Um, but we have a managed service for, for studios that don't wanna operationalize the tech.
[00:13:30] They don't wanna manage databases. They don't want to, you know, run containers or think about any of those challenges. Um, we have a support model for when you're in production and you need hot fixes, you know, you want, you know, feature requests that you want us to prioritize. um, you know, because you're, you know, you're, you're a customer coming in to, to support the company.
[00:13:49] Um, and then thirdly, um, we have a licensing model for the clustering technology we provide, which sits outside of the core [00:14:00] code base. Um, that runs as kind of a layer underneath it to have, uh, to. Um, the player base to span multiple servers for a bunch of different game features, multiplayer chat, messaging, status events in app notifications, matchmaking, a whole bunch of the functionality of our game tech.
[00:14:19] You know, you want your player base not to be chartered. So to avoid that. Very traditional, you know, world of war, cross style realm, server pattern, and move into a singular player base at scale. You know, we provide that clustering tech again, not too dissimilar for, from a, from database technology to, to allow you to do that.
[00:14:39] And so you'll, so wherever you're connected across whichever server in your Naima cluster, you are playing against any other player who's in the game. So, um,
[00:14:50] Avi Press: this sounds very similar, I think, to a lot of companies that we talk to in the open source space, where I think, you know, of those four categories that, that you mentioned, um, oh, we lost Gabe [00:15:00]
[00:15:00] Chris Molozian: I think you, yeah.
[00:15:01] Connectivity, I think you'll be back. Yeah, yeah, yeah.
[00:15:03] Avi Press: Um, so of those of those four categories, I think that, you know, offering a variety of them kind of covers a lot of the bases and then you, you have something for most of the customers that are gonna come your way. But I think a lot of the companies that we talk to, there's kind of one of those models, that's kind of the main act.
[00:15:22] And then you have the others, which, which, you know, get the other customers. And so I'm curious, um, does one of those, um, does one of those models. Make up the vast majority of the company's revenue or how, how do you see those different, um, those different offerings fitting together in
[00:15:40] Chris Molozian: of your bottom line for us?
[00:15:41] It's definitely got to be sort of the, the support piece. It's the I'm going into production. I want to be able to speak to. The makers of naer, which is the name of our game tech. I wanna speak to the heroic team where I need them. Um, I don't, I don't prefer to [00:16:00] liken it to an insurance package, but you could think of it that way.
[00:16:03] Right? Definitely. Uh, in the same way, as you know, uh, Basho with Rak and in other database companies like the guys working on MongoDB, um, and, uh, And red is, you know, when it's in production, you, you want to know that if there's an issue, there's somebody you can call. So I think that's where, that's where the lion share of the, the relationships with game studios comes from today.
[00:16:26] Yeah, that
[00:16:27] Matt Yonkovit: it's an interesting, like shift in paradigm because a lot of companies are trying to chase the cloud, , as a, as a cloud first. But I don't think the revenues outside of the big players, like the Mongo Atlas sort of, you know, the, the, the AWS is right. I don't think that their revenues are necessarily, , as, as high or as, as growing as fast as potentially, they could get from a few larger of the enterprise customers.
[00:16:53] and I've seen that, , quite a few people in chasing that cloud had even gone so far as to say, we're not going to offer any [00:17:00] of those other options. Right. We're not gonna do a, a, you know, a. Support support, licensing support license, or a cost. We're not gonna do open core. We're just gonna go either you do the cloud and you pay us or you're on your own with the open source and deal with it.
[00:17:14] and that's a tough situation for a lot
[00:17:16] Chris Molozian: of people. You're right. I mean, I know that, uh, I mean, one, one other product out there that I'm a huge fan of the guys at century. Um, and they, they provide that, um, uh, you know, stack trace and logging capture on mobile devices on end devices that can be centralized for analysis through their dashboard.
[00:17:35] And they, I think have taken very much the route that you're talking about here, where it's open source technology. They have a managed service. Those are your options, you know, run it yourself somewhere or work with their managed. Um, and so I've seen that in a few places. Uh, we, we find, again, this is probably games industry specific, but we find a lot of studios [00:18:00] need to integrate game tech with business intelligence, toolings analytics, stacks, maybe a data lake like snowflake or Redshift or something like that.
[00:18:09] And so we end up needing. Not always be able to manage, to just host it for them and running on, on our infrastructure. Um, because the connectivity is just not, not possible to do through, you know, VPC and, and, uh, and some of the private, um, you know, peering that would need to happen. So instead it becomes more effective to place it into their AWS account or GCP is similar.
[00:18:33] Matt Yonkovit: Yeah, no, I think that that's an interesting, , point because I've seen that a lot as well, where it, and it's not just in gaming when you talk about any, either regulated industries have this issue, um, where you can't necessarily have everything in the same VPC. And so the, as a service plays from multiple providers causes issues.
[00:18:53] So they wanna roll their own, even if it is in their own cloud provider or in the cloud provider of choice. , Or that they want to keep [00:19:00] control of that stack fully because they, you know, want to ensure that they have all the security and, , all the bells and whistles and all the, ability to do any sort of analytics or operations that they need on it directly.
[00:19:11] So it's a common thing.
[00:19:13] Chris Molozian: Yeah, I totally agree with you. You're right. I I'm been in the industry games industry focused for seven years. So I come at everything from the mindset of how best to, to kind of serve that industry. But you're right. There's a lot of other areas where, you know, being able to deploy the technology is a product rather than just a service.
[00:19:31] Can make a diff big difference for, uh, for pro possible enterprise adopters of that tech. So
[00:19:38] Matt Yonkovit: you followed a very different pathway than a lot of other companies that we've talked to in the past where you started commercial, went open source, as opposed to you start off open source and then eventually might add commercial offerings.
[00:19:52] Um, Was it kind of a shock to some of the employees or the people you're working with on a day to day basis? When all of a sudden you're going [00:20:00] from we're selling this proprietary commercial software to its open source. How did that go off internally? So
[00:20:07] Chris Molozian: remember I mentioned that we deliberate over it for about four months.
[00:20:10] Yeah, yeah, yeah. We solicited feedback from everyone on the. Um, and we, you know, took the opinions of guys working on the sales side, marketing, you know, everyone on core engineering, you know, is this the right direction to take? You know, we know that we, well, we believe we fit this category of core infrastructure.
[00:20:33] Looking at the space that appears to be the open source route appears to be the best way to solve the needs of our specific. Developer audience, but also, you know, resolve the concerns they have around the availability of the technology and the event of, of some kind of a, you know, change of circumstance.
[00:20:56] Right. It, it seemed like the best way to answer that concern. And so [00:21:00] we deliberate about it for quite a while. In hindsight a lot longer than we needed to because isn't that always the case. Yeah. Yeah. It's been, it's been great. Um, it, my, if I could turn back time and, and leverage hindsight to change direction, I would've just taken this route from the start.
[00:21:21] Um, but probably leaned in earlier into just building it as an open. Project and then forming some kind of commercial entity around it, it later. Um, so that's what I would do if I could've gone back. Yeah. Did you,
[00:21:37] Avi Press: so when you were going over this internally, I guess a two-pronged question one is, um, did you.
[00:21:43] Was this something that you had any trouble or difficulty kind of getting your investors on board with. Um, and then B I'm curious if you had done that from the start, how do you think that would've impacted, um, that, that initial, that initial, getting into YC, getting that initial first, , [00:22:00] precede or seed, uh, funding, how do you think
[00:22:02] Chris Molozian: that that open source question tie into, so I'm not sure why Combinator would ever have been concerned about whether we.
[00:22:09] You know, started off through a software as a service distribution model or a product orientated, open source model. Um, you know, they want the founders, they want the founders to believe that they can find a way to make it work and build something that people love. Right. So I think that distribution model is less concerned.
[00:22:28] I mean, obviously alongside distribution comes in eventual monetization and, and revenue generation commercialization, but for them, it's all. you know, enabling the founders to have the conviction and the freedom. To find whatever that right path might be, whether it's a pivot, whether it would be described as a pivot or not, you know, in our case, I wouldn't necessarily call our move from SAS to open source a pivot.
[00:22:54] But depending on how you think about the definition, you very well could at the end of the day. Right? Um, so [00:23:00] to that answers, I think half of it, as far as the rest of our investors go, um, they were prepared to follow Y Combinators lead. So in that respect, we. It was quite easy, quite straightforward for us, um, to be able to change.
[00:23:16] Cuz I think we started thinking early about that line between what is open source and what is open core. Hmm. Okay. So we started early enough and I think you see sometimes in the open source space at the moment. I dunno if you guys saw what happened just this week or the, or last tail end of, of last week with ACA framework.
[00:23:34] Oh, yes. so, you know, that's what happens. Perhaps if I, if I could just give my, you know, humble opinion on this, what happens when perhaps very, very much later in the life cycle of open source, you try to move the line in the sand between what is a commercializable relationship and what is a, a community relationship.
[00:23:54] Um, and. We thought very, very [00:24:00] early, because we started off fully proprietary and then, and then shifted, we thought very early, you know, what is the right place to draw that line? So,
[00:24:10] Matt Yonkovit: yeah. Yeah. And, and Chris, that's a great example, Avi, and I just debated that like yesterday, honestly we did. Um, so it was it's, it's a very timely example for sure.
[00:24:21] Um, but it is an interesting take because I think that. The mentality from a lot of startups, especially in open source spaces, grow at all costs because we all know as soon as you, you know, do your first push to GitHub, you're gonna have a million users. Right. Um, that that's, that that just happens. That's what open source is all about.
[00:24:40] Mm-hmm but you know, if a GI,
[00:24:43] Chris Molozian: if it's a GitHub project, that's JavaScript basical basically, probably will maybe,
[00:24:47] Matt Yonkovit: maybe. Right. Um, but I think that that growth at all cost mentality. and we're going to not worry about any sort of the commercial aspects of it, , we we'll figure out the [00:25:00] monetization later or, you know, we'll, we'll bolt on something later.
[00:25:04] it tends to drive some of those. Later changes because all of a sudden, you know, Hey, maybe you've gone through a few rounds of investment and now you need to start to show some ROI um, and maybe, you know, , your early indicators were growth, growth, growth, growth, growth, and now you're left with, , maybe some, some pitfalls and the revenue and the profitability side of.
[00:25:28] Chris Molozian: I think you're right. I mean, I, I, I would argue and again, um, you know, just one person's thought on this, in the, in the space that a lot of that kind of adoption at all costs, especially when it comes to the venture capitalist mindset behind it was driven by this. I dunno if you'd call it third generation of tech company, but let's call it roughly third generation, you know, the, the rise.
[00:25:57] Facebook the rise of social [00:26:00] networking, the rise of the kind of companies that go through free consumer adoption, and then figure out how to monetize later. Mm-hmm and it worked exceptionally well in those spaces because you as an individual became the product , you know, you became the advertising data that was needed to drive revenue right now with B2B.
[00:26:24] I don't know that there's really that stronger correlation between adoption and then later commercialization. Um, obviously you want the project to be popular because you can prove product market fit, but. How strongly that then ties to the commercialize ability of the audience that you have captured, I think becomes a lot, lot trickier.
[00:26:48] Um, and so maybe it's to do with the freedom that venture capitalism is given to, you know, a, a particular generation of [00:27:00] open source companies that is focused entirely. you know, adoption. And then, you know, maybe as you say, 2, 3, 4 rounds of funding later are then trying to think about, well, we've had this really strong developer audience, but what, what do we do to actually commercialize the businesses that the, that developers is operating with this technology within?
[00:27:22] Um, yeah. So that, that's where I think some, some of this comes from anyway. I mean, there's also the aspect that open source has always been, uh, a freedom of expression, a space for developers to just gift to the world, something that is of their creation. Um, because at the end of the day, we're all creators.
[00:27:39] And so we want, it's an element of, of showing off our, our skills. It's an element of scratching our own itch. It's an element of. Being able to, you know, entertain a community of developers and, and give them something to [00:28:00] rally behind. Yeah. And that's also driven a lot of philosophy around open source, but that has actually created, uh, a counterintuitive positioning when.
[00:28:12] you've got the generation of commercialized open source software coming through. Yeah. And so developers feel like that rug is being pulled out from underneath them and it seemed unexpected now. Well, I,
[00:28:25] Matt Yonkovit: I think that, yeah, yeah. Go on. Let, let me jump in real quick there, because I think that's an interesting point from a, um, that, that kind of B2B versus B2C play.
[00:28:34] Because, and, and even Gabe and the devel space might know this, uh, you know, you know, I'm interested in his take as well, because, you know, when you talk about like the developer journey right now, a lot of these tech companies and these software companies that are out there in this space and let's use infrastructure companies, you mentioned database companies is a good example.
[00:28:55] I, I have a deep background in the database base. Everyone is chasing the [00:29:00] developer because the idea is if I can get a million developers. And I can get them to use maybe our free cloud product or sign up to use this thing. Then they're gonna build these applications and then eventually they'll need support because our bosses will be like, oh my God, this is great, but why did you build it on this stuff that was absolutely free.
[00:29:18] And then they'll have to pay for the cloud. Right? That's kind of the model, if you're, if you're thinking about the business model from the mass adoption standpoint. So if I can get a million people from a developer perspective, um, then if I can convert 10,000 of them into paying customers, That's a win.
[00:29:34] So growing that, you know, individual user audience makes a lot of sense. And the conversion rates don't always work that way because a lot of developers they're just using these as free products and they don't see the value and pain for them.
[00:29:52] Chris Molozian: I would weigh in here, but I'm gonna pass it to Gabe you can weigh
[00:29:56] Matt Yonkovit: in here too, Chris, but Gabe, Chris, you know,[00:30:00]
[00:30:08] Gabe Pene: Sure. Uh, I mean, I can definitely echo that sentiment for the, the developer community, but our efforts absolutely follow that approach. Um, at least my focus is primarily on independent developers, small. Solo projects, um, because that's kind of one tagline that has followed the hero and Thema, uh, from the onset is kind of democratizing, uh, game development to the point that you don't need a large studio backer.
[00:30:36] Um, so yes, I will take a million individual developers versus perhaps one large enterprise, because at this point in time, a successful game can come from anywhere. It can be one single person developing the. Hugely successful game. Um, and as that game grows, so does their need for their
[00:30:56] Matt Yonkovit: product. So Chris, , you had a comment there.
[00:30:58] Um, so yeah,
[00:30:59] Chris Molozian: yeah, no, I would, [00:31:00] I would echo, I mean, we have this expression internally. It's maybe a bit cheesy. We, we provide our game tech without feature G it, um, specifically, because we believe that a rising tide lifts all boats. Right. If you look at the, oh yeah, the, the, the change in expectation from players.
[00:31:17] As they play increasingly higher fidelity, higher quality, more immersive, more social, more competitive games, the, uh, cost and energy required to produce that output for success that meets the expectation of players. I mean, you know, let's talk about the fortnight and the roadblocks experiences that players are accustomed to.
[00:31:41] Now that gets increasingly more difficult to achieve on a small. You know, you're not just talking about the involvement with art style and game design, economy modeling, you know, physics engines, rendering engines, uh, you know, domain [00:32:00] modeling. Then you've got all of the service side stuff. And so for us, yeah, we are absolutely passionate about the fact that, you know, we can provide tech that, you know, some of the largest games publishers in the world are using.
[00:32:13] And, you know, you consolidate that down to a single server deployment model and any game team in the world can use any independent developer in the world can use. And they're using exactly the same features and capabilities. That the largest publishers in the space that we work with are using today. So that, I mean, we're proud of that.
[00:32:32] Definitely. Um, yeah.
[00:32:34] Matt Yonkovit: And, and I think that, you know, with this wide scale adoption, Okay. It brings the challenge of everybody downloading using the software. How do you then start to figure out whether the company's growing? What sort of things are you looking for to see if you are, you know, rising the tide, making the pie bigger for, for everyone?
[00:32:55] Like what sort of key business metrics are you using to drive, [00:33:00] you know, uh, that discussion and start to plan out for the future.
[00:33:06] Chris Molozian: Gabe I'll leave this one to you. I think you've got all the metrics in tracking.
[00:33:19] Gabe Pene: Great. Sure. Uh, obviously there's differentiation in metrics between, uh, the growth of revenue in terms of, uh, obviously enterprises signed up of managed cloud services and just pure adoption. Um, from my point of view, on the Deval side, I follow pure adoption. Um, I'm not. Focused on how many users there are in our managed service.
[00:33:41] I'm not focused on the number of studios that we have as users I'm focused purely. Uh, my, the number one thing we look at is Docker downloads. Uh, just the number of individual people. Doesn't matter if they're working at Z or Sony, or if they're working in their garage, uh, at night, Um, so for me, [00:34:00] those that's one and the same, the, the focus, uh, is purely on adoption with the belief.
[00:34:06] Uh, and I think that's shared across,
[00:34:08] Chris Molozian: I think Docker downloads is our number one, the commercial, you know, I know it's difficult to truly determine the unique users because of see a Docker download is counted also when you're updating for new releases of the server. But, you know, we sit at about 5.3 million Docker downloads at this.
[00:34:27] Um, so we are proud of that number as a measure of reach into our developer community.
[00:34:34] Matt Yonkovit: Awesome. Yeah. I mean, and I think that, you know, getting that adoption number and focusing on what it is, it, you know, everybody, hopefully if you're running a business, you can track your revenue. You can track your sales, right?
[00:34:46] Those are important. Like, you know, things that everybody can track, but the predictive measure, especially in this modern kind of business ecosystem. And when you're in the open source spaces, adoption. And the open source adoption side of things [00:35:00] is that predictive measure that used to be, you know, kind of the marketing funnel, right?
[00:35:04] It's the, it's the top of the marketing funnel or of what used to be that marketing funnel, because the more people you have, the more opportunities to potentially, you know, um, engage with someone in a commercial, uh, relationship later on down the road.
[00:35:16] Chris Molozian: It it's absolutely that marketing reach definitely.
[00:35:19] Um, almost entirely, I would say for the most part substitutes, what would otherwise be considered KPIs for marketing teams? Yeah, definitely.
[00:35:30] Matt Yonkovit: Yeah. And I think a, like, this is one of the things that we've seen quite a bit as well in talking with users is, you know, in the open source space, the marketing side is, is D.
[00:35:41] Right. Um, it's not the same, you know, marketing process because you can't, you can't gate things. You know, you talk about feature GA Chris, but you know, marketing play O often is, oh, well, we're gonna gate our content. We're gonna gate our downloads. You have to sign up, you have to register. You have to tell us everything about you before you can use it.
[00:35:59] And that's just very [00:36:00] anti open source.
[00:36:01] Chris Molozian: It, it absolutely is. Yeah. I mean, we don't have any really deeply valuable telemetry at all of any kind inside. The game server when you download it and you run it, we, we don't, we don't really believe in that as a way of measuring reach. Um, it seems a little. privacy invasive for the developer.
[00:36:22] Um, so yeah, we're unlike some, I guess node projects, there are some, certainly some node projects that, that give the option to opt in or opt out of these sort of anonymous tracking type things. Um, but we try to keep it slightly looser measure. Um, you know, we obviously use scarf to help us with these things.
[00:36:42] Um, but, uh, it's yeah, it's a looser figure around download counts and. and using that as a measure of adoption and a measure of reach, um, you know, I mean the industry as a whole, we tend to think of it. You know, unity engine is not open source. It's a closed source engine, [00:37:00] but it is free to download and use.
[00:37:01] Um, so there is a little bit of, um, um, Uh, more proprietary and licensing orientated nature in the games industry than perhaps other industries from an adoption perspective. But, uh, unity have a reach of maybe about 8 million, I think was the last time I read somewhere was about eight or 9 million developers.
[00:37:21] Unreal engine is somewhere in the five to 6 million developers. Again, it's also not open source. It's a closed source engine, but it's source available if you, uh, pay to become part of the unreal developer network. Um, and. That's kind of our idea of where we want to get to in terms of reach. If we think about our market opportunity and our market reach, we want to be able to say every one of those developers knows about Naima knows about our game tech.
[00:37:48] Avi Press: Yeah, I think, I think that's very apt about the, um, you know, the move to focus more on the distribution line than having kind of very deeply ingrained telemetry. That was something that we [00:38:00] have actually at scarf seen over and over that people are much more sensitive to, um, phoning home mechanisms and, um, kind of baked telemetry into the code that they are using.
[00:38:14] Rather than, you know, say the district, like, like, you know, if I download something from Docker, that registry is just going to see something that is how the internet works and, you know, I'm used to that. And we find that yes, um, fitting into people's expectations, um, is a very key thing here. And so, um, yeah, I'm.
[00:38:34] I'm hoping that we will, um, you know, see, see more
[00:38:37] Chris Molozian: innovations in this, this distribution channel to ability, I think overall,
[00:38:41] Avi Press: um, and it seems like that is the, the general shift or the, the general direction. Um, That a lot of this stuff
[00:38:48] Chris Molozian: is going, um, it it's about acceptability. I think you're right. I think it's about the personal feeling that developers have, because we, we tend to be more acutely aware of how data is used or [00:39:00] misused from a privacy perspective.
[00:39:01] right. And so, you know, with that acute awareness, uh, it's, it's a much more acceptable route to, uh, To for, for, for, for open source companies who wanna analyze their reach and their success, you know, you know, using adoption as a measure of success, um, you know, to be able to do that, it's a much more acceptable way to do it, I think.
[00:39:22] Yeah. Yeah.
[00:39:25] Matt Yonkovit: Matt, go ahead. Oh, no. Um, Abby, if you have more questions, feel free.
[00:39:30] Avi Press: Um, I guess, you know, one thing that, um, I've been hearing more and more about broadly these days is just I an increasing, just an increasing. PO an increasingly positive sentiment about open source from the gaming industry. Um, I was at the, um, open source summit in Austin a few months back.
[00:39:52] And they were talking about the new open 3d foundation and talking about all the different kind of, you know, gaming companies, [00:40:00] um, or, you know, even in the film industry, just entertainment broadly. I would say that, that, um, Are seeing an increase in, in open source participation. And, you know, maybe that's more just, just I'm happening to see that now maybe that's a genuine, um, increase in general participation.
[00:40:18] So I'm really curious as someone who has been working in the gaming industry for, um, for several years now, how, how you've been looking at that trend, is that something that is that genuinely what you are seeing as well? Um, you know, why is this ha why is this happening now? I'm just curious for your general thoughts on that trend broadly.
[00:40:35] Chris Molozian: So that's, that's a really great question. So my, my opinion on this is I think you're absolutely right. I think the games industry as a market, um, you know, that you reach through game tech is becoming much more. Uh, amenable and open to the idea of open source technology. Um, [00:41:00] and this perhaps the, the reason that this segment of the developer space has maybe operated as slightly more of a laggard than other developer communities in, in, in say, you know, social media and, you know, um, you know, app frameworks and, you know, web development and areas like that, maybe.
[00:41:21] The, the reasoning for the difference is that, uh, there was much, much stronger sense of in-house development of tooling as this form of competitive advantage in gaming. So if you think, if you go back say 10 years, you know, unity engine was very early in its life cycle. Now it's not open source, but let's talk about it anyway.
[00:41:43] Um, , it was very early and it was almost disparaged by a lot of the games industry as a hobbyist engine, as an indie developer engine. You know, it, it didn't at that point necessarily have the physics capabilities and the rendering engine to, [00:42:00] you know, compete with a lot of the in-house engines that had been developed at studios.
[00:42:06] Um, but you know, over time the industry realized that actually, you know, yes, I, there. Some circumstances where I need to specialize in building that that might, might warrant the building of my own engine and the building of my own physics tool, chain, and my own rendering, uh, systems. But, you know, as.
[00:42:30] Unity engine became more capable in those areas. It also became a more standardized approach to solving these problems, less uptake as a developer, moving between one studio and another, you know, it, it meant that it became much, much more widely adopted and. I think open source is the next phase of that, where, you know, there's some amount of standardization of tooling that can help the transference of knowledge by developers or, [00:43:00] or the leveraging of knowledge by developers, you know, working on games from one studio to the next less internal proprietary tooling that needs to be maintained again.
[00:43:10] And I think it. Sits alongside that trend of expectation from players. You know, if a studio starts up today, if you look at the unreal engine five demo, for example, the physics and the rendering and the, the, just the quality of collision detection of, you know, destructible. Uh, physics of Ray tracing of all of the aspects that go into what looks like such a beautiful demo.
[00:43:39] I mean, that's, that's 25 years worth of engineering effort and being a studio today. you do you really want to invest in that area from scratch to try to catch up. Um, and so, you know, you are looking to find tools that can help you achieve that much, much earlier so that you can [00:44:00] compete with the rest of the industry, building different gameplay experiences to attract audiences that expect fortnight.
[00:44:09] Quality of gameplay experience. Um, now where does open source fit into this? So companies like GAO engine, well, actually they're, they're, you know, nonprofit foundations like GAO, um, and the GAO engine, those guys are at lighthouse actually. I mean, they've been building as open source code for a long time, you know, at least 10, maybe 12, 15 years.
[00:44:29] I I'd need to double check to be honest, but, uh, they're a lighthouse for other. Open source companies, you know, including us, where we've been inspired by the. Level of, uh, commitment and perseverance and, um, attention to building a developer community inside the games industry, um, through an open source model.
[00:44:52] But as you see, there's starting to be an acceleration of that. You know, you've got what was the Crytech engine that got bought [00:45:00] by Amazon and turned into lumber yard that has now been spun out of Amazon donated. To, I think it's donated to the Linux foundation or maybe the software freedom Conservancy that is now open 3d engine that you mentioned at this conference, this open source software summit that had just happened.
[00:45:17] And that's, you know, because we're moving more towards it's, it's, it's acceptable to not build these proprietary tools internally to leverage the maturity of what is out there in the open source space and then build on top of. and utilize it to, you know, catch up and compete with the very best of what is being, you know, built on console, desktop, web, and mobile.
[00:45:44] So I think that's a very elaborate answer, but I hope that, did that answer you your question?
[00:45:48] Avi Press: Oh yeah, absolutely. And I think, you know, we, um, it's, it's a similar thing, you know, people say, you know, don't roll your own cryptography. I think there's like a, um, hard tech I think will over time [00:46:00] gravitate towards these things of like, yes, these are not problems that.
[00:46:03] We need to solve ourselves. You're really gonna be reinventing the wheel if you do. And I think, you know, uh, game engines, real time computing, like massively paralyzed and distributed comput, like these are all very hard problems to build. And so I think, you know, that this, this, uh, is, is not a surprising
[00:46:18] Chris Molozian: trend.
[00:46:18] I think I agree with you. Definitely all. Yeah, yeah, yeah. But the industry has where they didn't build internally. They were accustomed to licensing, right. Havoc, physics, for example, you know, um, you know, it's a classic example. There are all sorts of sound libraries out there with proprietary codex that have been licensed for years and years and years, um, by, by studio teams as part of their tool chain.
[00:46:43] Um, so I think the industry was just accustomed for a much, much longer period of time to go through that licensing model. Um, And that licensing model is, is sort of shifting to open source adoption, and then commercialization through that commercial licensing relationship as well.
[00:46:58] Matt Yonkovit: Yeah, no. I mean, and I [00:47:00] think that, you know, it just speaks to the power of open source.
[00:47:02] Right. And, you know, you see this as, you know, it while open source, you know, the, the tools that are released might not initially be up to snuff with the other ones that have been around for, or the other proprietary tools that have been around for 20 years. The, the bar gets shorter and shorter. The gap gets shorter and shorter over every release and open source eventually, you know, brings, uh, a multitude of people to contribute and, um, starts to close that gap
[00:47:29] Chris Molozian: super quick.
[00:47:29] So, absolutely. I mean, blender, right? Blender is a tool for 3d and 2d, uh, asset creation and the way it competes with, you know, Maya and you. Another tooling now, you know, it's just as competitive or more so yeah. Than ever before. Yeah.
[00:47:47] Matt Yonkovit: Well, Chris, Gabe, um, thank you for hanging out with us today, telling us a little bit about, you know, um, you know, what's going on, um, over at heroic labs and telling us a little bit about your own open source journey.
[00:47:58] It's been, uh, very
[00:47:59] Chris Molozian: [00:48:00] enlightening. Thank you so much for us. Yeah. Thank you. Thank you as well, guys. Thanks for the time. All right. Thanks.
[00:48:11] Thank you both.
[00:48:13] Yep.