Open source SaaS acquisition: changes and challenges with Emil Ivov @Jitsi

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/, a serial acquirer of B2B SaaS companies.

In episode #41, Anna Nadeina talks with Emil, founder of Jitsi, a set of open-source projects allowing you to create video conferencing solutions that are secure and scalable, it’s also a bunch of APIs and SDKs to power your existing solutions, and it’s a community.

Emil’s journey with Jitsi began during his master’s studies in France, where he contributed to a research project on IPv6. Recognizing a gap in remote communication, he developed a rudimentary audio-video phone capable of making calls over IPv6 in just two weeks. This initial prototype laid the groundwork for what would become Jitsi. Over the years, Emil and his team focused on evolving the platform and experimenting with various features and functionalities. They faced numerous challenges, including a steep learning curve and the reality of creating a product that was user-friendly. The early days were marked by trial and error, including the integration of instant messaging and other functionalities that, while innovative, didn’t always serve the intended purpose.

Transitioning from academia to entrepreneurship

Emil’s decision to transition from academia to entrepreneurship stemmed from his realization that traditional research often felt unfulfilling. He longed for a tangible impact, which led him to pursue a business model around Jitsi. With his co-founder Yana, they established a company to provide development services for Jitsi, allowing them to sustain the project without relying heavily on venture capital. This bootstrap approach was unconventional but proved to be a successful model for their growth and sustainability.

The open-source model and its advantages

One of the key aspects of Jitsi’s success is its open-source model. Emil believes that open-source projects foster collaboration and innovation in ways that proprietary software cannot. The flexibility of open-source allows developers to contribute freely, creating a community-driven ecosystem. Emil emphasizes that open-source creates a rallying point for collaboration, where everyone understands the terms and can contribute without the constraints of corporate bureaucracy. This model not only democratizes access to technology but also enhances the quality and security of the software.

Navigating metrics and accountability in business

As Jitsi grew, navigating metrics and accountability became crucial. Emil highlights the importance of tracking meaningful metrics that reflect the product’s impact rather than just focusing on output. He contrasts two types of metrics: those based on actions taken and those based on feedback from users. The latter, while more challenging to measure, provides a clearer picture of the product’s effectiveness. Emil advocates for a culture that prioritizes user-centered metrics, which can sometimes be uncomfortable for teams but ultimately leads to better outcomes.

Experiences with acquisitions and cultural shifts

Jitsi’s journey included significant acquisitions, starting with their partnership with Atlassian. Emil describes the transition as a culture shock, moving from a small, agile team to a larger, structured organization. The acquisition brought about challenges, including the need for clear communication and the establishment of defined roles within the team. Emil emphasizes that such transitions require empathy and understanding from both sides to ease the integration process. The lessons learned from this experience have shaped how they approach future collaborations and acquisitions.

The role of empathy in legal negotiations

Legal negotiations during acquisitions can often be contentious, but Emil stresses the importance of empathy throughout the process. He recounts his experiences with legal teams that approached negotiations combatively, leading to unnecessary stress and conflict. In contrast, he advocates for a more collaborative approach, where both parties seek to understand each other’s positions and work towards mutually beneficial outcomes. This perspective not only facilitates smoother negotiations but also fosters long-term relationships between companies.

Navigating open-source acquisitions

Acquiring an open-source project presents unique challenges and opportunities. Emil notes that the transparency of open-source software simplifies the due diligence process, as potential acquirers can easily review the code and contributions. However, concerns often arise regarding the community’s reaction to an acquisition. Emil emphasizes that while initial skepticism may exist, most contributors understand the nature of open-source and can appreciate the potential benefits of the acquisition. He believes that maintaining open lines of communication with the community is crucial for a successful transition.

Finding fulfillment in work and relationships

For Emil, the journey with Jitsi has not only been about building a successful product but also about finding fulfillment in his work and relationships. He reflects on the importance of collaboration and shared goals, particularly in his partnership with Yana. Working alongside a life partner can provide unique insights and support, enhancing both personal and professional growth. Emil believes that creating a workplace culture that values relationships and empathy ultimately leads to greater success.

Learning from mistakes and embracing change

Throughout his journey, Emil has encountered numerous challenges and mistakes. Rather than viewing these as failures, he sees them as opportunities for growth and learning. The ability to adapt and pivot in response to feedback and changing circumstances has been a defining characteristic of Jitsi’s evolution. Emil encourages other entrepreneurs to embrace change and view setbacks as integral to the learning process.

Leveraging team dynamics for success

Finally, Emil addresses the importance of team dynamics in achieving success. He believes that understanding the strengths and weaknesses of team members is crucial for effective collaboration. By fostering an environment where individuals feel empowered to contribute their unique perspectives, organizations can drive innovation and improve overall performance. Emil’s insights underscore the need for leaders to be attuned to their teams and to leverage their collective strengths for the benefit of the organization.