Among intellectual property lawyers, there is an unspoken “20-year” rule: any technology more than 20 years before its time is not worth using to start a business.

We say this because the period of patent protection is about 20 years. So, if you file a patent on an invention twenty years before its time, by the time your business starts working, your invention will be up for grabs. The 20-year rule applies when patent protection is the main strategy for maintaining a competitive advantage. While that may be true in industrial machinery or pharmaceuticals, it doesn’t apply much to software. Nevertheless, the 20-year rule reveals a deep truth about all entrepreneurship: timing is everything.

The success of a business can hinge on when the business launches its first products, in relation to market needs and technical feasibility. Everyone knows that product/market fit is a key driver of success. But the fit is not only a question of “Is there a market?” It is also a question of “Is there a market now?”

Mostly, people think of business timing in terms of “time to market”–how quickly can you push the product out? This makes sense when there is an obvious addressable market need, and various competitors are working to fill it with viable products. But time to market can also fail if a business pushes a product out too early, before the market is ready to absorb it. By the time the market is ready, the technology will be commoditized. Or, you may have a good market fit, but supporting technology may need time to catch up. For example, there was an entire market segment of “interactive content” before broadband, but there was no infrastructure to deliver it, and the segment has still not recovered today.

A premature product launch also means the company’s early investors have to wait longer for returns. So, if your product needs a year–or two, or five–to “cook,” your investors may be clamoring for ROI long before you are ready to deliver revenue. And we all know that impatient investors often lead to bad business decisions: fire sales, over-discounting, and wild business pivots.

COSS is a Time Machine

COSS businesses can finesse this timing issue more easily than most businesses. Open source software releases can test the market, test the product, and start building a brand and a community–all before the business launches its first commercial product. 

A few years ago, I wrote an article on why COSS does well during economic downturns. In that article, I collected data on the most successful COSS companies of the time, and matched the development period for the open source project to the later launch of a COSS company around it. My aim was to track the inception of the project versus the commercial launch, in order to analyze the timing of the development. My thesis was that high-quality open source projects develop during downturns because they can take advantage of labor market surpluses to develop with a low profile, and free of revenue expectations. In time, these businesses became COSS companies, usually one to three years after project launch.

That research showed that many successful COSS businesses started their projects during downturns. But the flip side was that COSS businesses take advantage of subsequent economic upturns to launch their businesses. This meant they could delay taking investment and beginning the push for commercial sales until the product has been de-risked for market, brand and functionality.

This is just one more benefit of the COSS model that was lurking in the data. COSS businesses are their own mini time machine, allowing them to stretch their roadmap to suit the technology context and the needs of the market.