In this episode, Mike Townsend sat down with Gab Columbro, Executive Director of FINOS - Fintech Open Source Foundation. Gab is an open source executive and technologist at heart, having spent over 15 years building developer ecosystems to deliver value through open source across Europe and the US. He thrives on driving innovation both contributing to open source communities and joining commercial open source ventures. Previously Director of Product Management at Alfresco, as Executive Director Gab grew FINOS from the ground up, with the vision of creating a trusted arena for the global financial services industry to innovate faster through open source collaboration. Gab holds a Master in Computer Engineering, is a Committer for the Apache Software Foundation, and advises open source startups. He’s a passionate soccer fan, reggae music connoisseur and special needs dad, and advocates wannabe.
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Mike Townsend: In this conversation Iinterview Gab Columbro, the Executive Director at FINOS. finos.org is anonprofit part of the Linux Foundation that is managing the Open Sourcecontributions for FinTech platforms. So we talked about what Open Source is.How it works, how it's funded, how it's managed, the political influences ofmoney in nonprofit, the bridge from Web two, World of Closed source softwareproduction to Open Source to then Web3 and crypto, where there is Open Sourceby default.
Mike Townsend: We, we. Basicallychatted about how they're growing the business, the nonprofit. They're doing afew million dollars now in revenue, and we talked about what matters for them.Overall, I learned a ton about Open Source development and why it's importantfor the world today and the world in the future.
Mike Townsend: So hope you enjoy.Here is Gab Columbro.
Mike Townsend: All right, Gab, I'mexcited to be chatting with you, man. I love what you're working on at, atFINOS. Why don't we start there? Could you just tell me and people listeningwhat FINOS is and what you guys are trying to accomplish in the world?
Gab Columbro: Absolutely. But firstof all, thanks for having me here, Mike. I'm excited to be able to share alittle bit more about FINOS the Linux Foundation and. Myself, so, well, justquickly on high level FINOS is the FinTech Open Source Foundation. We are anonprofit now, part of the Linux Foundation, which is the largest sharedinvestment in the world, technology investment in the world.
Gab Columbro: And our mission hasbeen for the last four years since we launched. To drive Open Sourcecollaboration in financial services. And that means across all the differentconstituents that make up this industry, whether it be investment banks buy sideand asset managers fintechs big tech companies, consulting companies andregulators.
Gab Columbro: We really see OpenSource and open standards as a mean to an end really to drive innovation in anindustry that really. , has entire need of it, I would say. And you know, Icome from very much from an Open Source background and I've noticed how, youknow, there is a major opportunity for this industry to collab better,collaborate you know, go past the sort of competitive nature and sort ofregulated nature of the industry to innovate very much like we've seen in everyother industry over the last 20 years through open collaboration.
Mike Townsend: And what's the generalattitude now on companies like say Apple, Google, Microsoft, even, even likemid-size companies. I'm thinking Slack air table companies in that range. Yeah.How do they view Open Source? Cause it seems to still be fairly split. I knowMicrosoft traditionally had been pretty closed off Google famously open like hoOpen Source is a, is a strange concept, right?
Mike Townsend: It's like puteverything public. And then like, can you talk to me a little bit about thetrends of Open Source?
Gab Columbro: Absolutely. Well Iwill start by saying that, as you say, when, when I started pitching Banks, noteven just banks, investment banks, the most conservative institutions in theworld about five years ago.
Gab Columbro: That they should, youknow, take their intellectual property and put it in the open and, andcollaborate with their competitors. You know, let's just say that the reactionwas a little look warm five years ago. So there's been a lot of work to do. Butthe reality, if we sort of expand to your point of conversation to otherindustries, big tech.
Gab Columbro: at this point. Opensourceis basically established as the, you know, not only the primary way toco-develop code that is known, competitive, differentiating meaning the likesof, as you say, Google Amazon, Twitter, Facebook. They all have realized that,especially when you're running a SAS business and therefore you're selling aservice, you're not selling software often.
Gab Columbro: Major building blocksof your offering are not necessarily, you're differentiating here, not yourcrown jewels and the. It makes way more sense to actually collaborate on thosemaking them become defacto standard. I think examples like, you know,Kubernetes or you know, hadup in terms of map produce and big data these aremajor examples of open Source software that got originated by these large techcompanies because they actually see a strategic advantage in the longer termrather than having to maintain, you know a very expensive piece of softwarethat is not necessarily differentiating. And so I think it's fair to say thatif Mark Andre said that, that, you know software is eating the world I think in2022, Opensource easy software you mentioned m.
Gab Columbro: You know, Microsoftused to be probably the biggest hater of Open Source under the, the Balmer youknow ceo you know, with the new ceo not so new anymore. Satya, there's been adistinct switch. Microsoft is now the largest Open Source contributor in theworld, both in terms of people and code. So talking about the switch in termsof perspective and, and feeling around open source.
Mike Townsend: Yeah. And how, howdoes this structure from a business perspective, So Microsoft clearly justifiesan enormous expense of probably tens or hundreds of millions of dollars on OpenSource development for which any other competing company could take what theybuilt and use for themselves.
Mike Townsend: Yeah. Are they gettingROI on other members outside of Microsoft contributing? And can you, do youknow the rough orders of magnitude? Like how. People contribute to, like theLinux Foundation or Open Source at Microsoft? Like where, where are we in termsof scale of Open Source projects?
Gab Columbro: Yeah, I think it's a,it's a very good question.
Gab Columbro: I'll touch on thefirst part of your question. , there's many ways that these companies get ROIout of Open Source. I think one that you mentioned is absolutely mutualizing,the cost of maintenance of a piece of software. Not just maintenance, butreally feature development. And so that's clearly the most obvious one.
Gab Columbro: And especially whenyou're talking about projects that are, Then incubated under foundations likeus we do have a vested interest in growing the community of the projects,supporting our members or our contributors in, in making those projects successful.So in a way, you have an ally in, in growing community on these projects.
Gab Columbro: But the reality isthat I think the major way these companies look at Open Source in many cases isalso really as a business model. , maybe less so from the largest you know,tech vendor. But really when you're talking startups and midsize, especiallyhere in the Silicon Valley, it is a very well established go-to-market strategyto really leverage Open Source.
Gab Columbro: Think about. You know,your typical sort of funding process for a startup especially in a competitiveindustry like financial services, you would really need a major upfront fundingto be able to even stand out and get to the sort of initial stages where you'retrying to compete in a very, very competitive and fragmented market.
Gab Columbro: What Open Source andespecially the commercial Open Source business model enables is for you to putout a piece of software that. You know, if you are doing the right moves tonurture a community can actually start develop engaging developers sort of on abottoms up on a try before you buy type basis, and ultimately really shorteningthe sales cycle because you're basically allowing them self-evaluation.
Gab Columbro: You're, you'reallowing your champions to learn directly from the Open Source software tobecome familiar with the software before even, you know, having had to speak toa sales guy. And so we are seeing major potential across all industries. Imean, there's been massive exits besides you know, Red Hat and GitHub of coursebeing acquired.
Gab Columbro: Over the last twoyears, we are seeing more and more commercial Open Source companies. Especiallyin SaaS, and we can talk a little bit more about how I think the SaaS businessmodel connects to Open Source. But you have plenty of example, like elasticsearch being listed. You know, especially I would argue for smaller companies,Open Source should be considered as a very appealing go to market strategy andbusiness model.
Gab Columbro: Especially in such acomplex economic and funding climate.
Mike Townsend: And do you think theOpen Source projects, by definition, kind of climb the stack? Like I think ofearly Open Source projects as, yes, you know, Linux, maybe even like operating onthe kernel, or you have like php or you have like, you have the, you have theprotocols, the languages, the, the building blocks.
Mike Townsend: So to. Those are like,you're not gonna make money off of that. So everyone says, Let's work on thistogether. We make this operating system so that we, we, we each benefit, right?You can have competing companies, each contributing and each benefit from that,but then it's like, I don't, you know, no one, you don't need to know whatoperating system your Mac uses to have a great time on the Mac.
Mike Townsend: And it is like not,it's not core as you're saying. It's not core to the intellectual propertythat, that Apple's building. In this case, does this kind of trajectory climbthe stack all the way? Is this the right way to think about it? Like it's, it'sincreasingly higher and higher up the chain of software development or how, howdo you think about the patterns?
Gab Columbro: I, I think you madetwo outstanding points. The first one being absolutely we have seen Open Sourcestarting from the lower layers of the infrastructure. Think about Linux, thinkabout even Kubernetes. Think about node. It's most often something associatedto, again, either layers down and deep in the stack that to your.
Gab Columbro: Don are not yourcompetitive differentiator, are not your sales sort of differentiator. But italso does very, very much connect and I think that's where you're going interms of going up the stack to what your business model is. I would argue thatmany of these projects, but I got sort of the layer where they are in thestack.
Gab Columbro: Don't give you thefull end to end package solution that typically an enterprise buyer would need.They probably will get you 80% the way there, especially if you're, say,hosting. Think about a FinTech companies or a payment solution that is actuallya platform play as opposed to a solution play.
Gab Columbro: You know, let's thinkabout an open banking, for example application. , we all think that thereshould be a lot of value in creating common, you know, standards, APIs, andeven reference implementation for say, exposing your internal core bankingthrough open banking. That said, The way you're gonna make money is actually byhosting that software and offering a service to your customers that you thenbill on a say per user or per transaction that really completely disconnectsfrom the actual, you know, old way of licensing software.
Gab Columbro: If, if that makessense. And so I think you're absolutely right. We are seeing Open Source eatingin a way more and more the layers of the stack up to the level of APIs. Icertainly have seen. , some attempts with certain in phs have projects likeperspective where you have also nice componentized UI libraries that you canuse, but you're never gonna get sort of the full end product because that'swhere typically companies come in.
Gab Columbro: And to your point,while we are all collaborating on the same core, we can add those enterprisefeatures. Those just even like hosting and servicing your customer. I thinkthat's, The fine point that I'm trying to make here is when I was growing up inOpen Source in the early two thousands, Open Source was actually a commercialdifferentiator.
Gab Columbro: We could actually saywhat I was selling. Hey, we are. X, but Open Source, and that will be an actualdifferentiator. I would argue that in most industries nowadays, Open Sourcesmore like table stakes. To your point, my Mac runs on hundreds of Open Sourcecomponents and I don't even know that they exist in, you know, unless I go andlook at the fine print in my, in my, you know, Apple license terms and so onand so forth.
Gab Columbro: So it's really more.How you drive and contribute to Open Source in a strategic way for yourbusiness model. I wanna be very clear. Many of these banks that participate infinance, actually all of all of the constituents in this in this communities,They don't do it for charity. Open Source is not because of the good of theworld.
Gab Columbro: Let's be clear, Icertainly have a conscience aspect of freedom, of information that does sort ofkeep me attached to this world. But the reality is that Open Source is, hasthis unique power of allowing you as a, an individual contributor, as acorporate contributor, or a company that is trying to, you know sell atechnology centric business.
Gab Columbro: To actually dosomething that is good for you and for your business, while actually drivingthe overall betterment of the ecosystem because you're ultimately contributingintellectual property that becomes sort of collective value that other folkscan use. So, I, I, I just wanna, you know, sometimes Open Source is reduced toeither just a code sharing mechanism or to.
Gab Columbro: Many millennials comeinto the workforce and ask for, What are you doing for, for good? And, youknow, show Open Source helps, but let's be clear, it's primarily a veryefficient way to bring your solution to market.
Mike Townsend: And how about thepolitics of it? I'm curious, like say take the Linux, which is, which is alarge foundation.
Mike Townsend: Yep. I'm curious howmany people participate in Linux and then how do decisions. I would imagine getmade, right? Because it's, it's kind of a, a community building a product. Sohow, how does that all kind of tactically work?
Gab Columbro: It's a very, very goodquestion. Well first of all, the Linux Foundation is actually an umbrella ofmultiple foundations.
Gab Columbro: So let's start there.pH being sort of the financial services vertical, of course, the Linux kernelcommunities and other very famous foundation, the Cloud Native ComputingFoundation with hosts Kubernetes, Argo, and most of the sort of cloud nativetechnology is under the Linux Foundation. So first thing to understand is that,Very sort of independent entities actually operating under the LinuxFoundation.
Gab Columbro: Then the generalanswer to your question, and this characterizes really any Open Sourcecommunity you know, is transparency. All the decisions that are made in OpenSource communities. , especially when it's under the Hospice of a Foundation,whether it be the Linux Foundation or any of the sub foundations like pH haveto happen based on a transparent governance that is publicly documented.
Gab Columbro: Generally, you try tooperate by consensus first, meaning, that is rarely sort of split votes thathappen either at board level or at any of the sort of project level. But itdoes happen. And so you do have very clear guidelines of how to resolvedisputes. You know, upfront, it's very clear who is entitled to vote, what isthe majority, you know, what is the quorum, and so on and so forth.
Gab Columbro: So I think the firstthing to understand is, Open Source communities are not governed top down,meaning we do have a board of directors and that is very much sort of areflection of the paying, contributing members to the foundation. The realityis that this board doesn't control the underlying dynamics of all the differentprojects.
Gab Columbro: Each project is in away, very much self-governed. Based on democracy, really, it's governance bycontribution. The more you contribute, the more you have a say in the directionof the project. Now that's how it works on paper. Of course, as you say, themore you build projects that have a direct value on either the bottom line oror the actual go-to market of a commercial company.
Gab Columbro: Well, politics isgonna start to kick in and there will be disputes that need to be resolved. Andso there are also, you know, escalation points and escalation procedures at anylevel to make sure that these disputes can be resolved. But I think, you know,if I need to sort of dumb it down, transparency, meritocracy and making surethat this is not a al sort of top down.
Gab Columbro: Pay to play type of,type of organization. That's what we've seen. Sort of in the long term is ableto, to really build trust. And ultimately when folks trust each other, it'smuch easier to get to, to consensus. Mm.
Mike Townsend: And in, in the case ofLinux, roughly how many people are participating?
Gab Columbro: Yeah, sorry.
Gab Columbro: You asked thatquestion a couple of times. I would have to pull up my numbers, but actually Inthe Linux Foundation at large, I think we're talking millions of developments.Really. Millions. Yeah. If you're talking between the maintainers and thecontributors, I mean, look, the, the, the Linux Foundation hosts over 300projects.
Gab Columbro: Many of you know,basically we spin up a project every week. In two weeks we're gonna have ourOpen Source summit. Actually next week we're gonna have our Open Source summitin Dublin. There's gonna be some pretty amazing announcements in terms of newprojects. So you know, the Linux Foundation is we become the place of choicefor open sales collaboration.
Gab Columbro: We get everyday, bothsort of individual contributors bringing. To potentially incubate in the LinuxFoundation, as well as actually major companies trying to really you know,harmonize an ecosystem, creative, brand new way of doing business. I mean, ifyou think about the. Big data world and the Hadoop you know, as the Open Sourceproject that is hosted in Apache, well, that created a whole new ecosystem 10years ago and sort of big data wasn't a thing by really having, you know, Cloudera,Maar and Horton works collaborating on the same piece of software.
Gab Columbro: What ThelinaFoundation really is done an amazing job at. identifying these opportunitiesand create the, the initial consensus and funding for these projects to, to actuallysucceed. So it's, it's staggering numbers I can come back with you with, withmore detail. Yeah, Yeah.
Mike Townsend: No, you're, you'rejust even in the ballpark of a million is, is where I was curious.
Mike Townsend: That's staggering. Andhow did the economics work? So I'm picturing, you know, there's probablypeople, like, obviously there's people who are working, who are gettingsalaries from companies. To spend all day, every day building on Open Source.Yes. Then there are people, I'm picturing there are just hobbyists who on theweekend, you know, they just love tinkering and they'll, they're gonna go in,they may not even be getting paid.
Mike Townsend: What's the generalcomposition of contributors look like? Is it 95% c salary folks, or is it,Yeah. How does it, how does that work?
Gab Columbro: It's A reallyfundamental question and one that the Open Source community continues tograpple, grapple with. As you know, as more and more sort of commercialdynamics sort of are created around Open Source in the sense that, look I'llstart with an example.
Gab Columbro: Last year in December,we had a major vulnerability which you probably have heard called Lock forShelf. It was a major security vulnerability on a very widely used packagecalled Lock for J. That has caused. , you know, months of remediation in thelargest enterprises in the world, as well as, you know, the White House callingup on the Linux Foundation to corral a task force that will start looking ataddressing, you know, global Open Source security.
Gab Columbro: Now open the, the, thesecurity of Open Source software is only a factor of a function of. Healthy anOpen Source project is and how sustainable an Open Source project is. There's avery funny xkcd comics about you know, this look for j issue of sort of relatedissues whereby, you know, you show, it shows the whole world infrastructurerelying on a really small, tiny piece maintained from a random guy in Nebraska.
Gab Columbro: Yeah. Yeah. And thatis exactly. The issue that the Open Source community at large, the LinuxFoundation, other foundations, global governments, both at, you know, in the,at the White House at U level, are trying to figure out, because to your point,there is still a major disbalance between you know, those who actually maintainthe code and how they're compensated from.
Gab Columbro: I would. , you know, forthe largest projects in the world, especially the ones that are hosted underfoundations like us, I would say that the vast majority of the maintainers isactually paid by their employer on a day by day for, you know, 50 to a hundredpercent to actually work on Open Source projects.
Gab Columbro: And that, of course,is a sustainable model because those companies are making money out of OpenSource, and they do rein. Either by funding Foundation cycle you know, throughmembership or providing sweat equity, actually, you know, developers that helpus maintain our projects. Those are the two sort of fundamental ways that whena project is under a foundation you can contribute to.
Gab Columbro: That said, , there's ahuge long tail of projects. Especially in ecosystems like MPM for example,whereby you have these really small libraries that basically the whole world isdepending on, that are maintained either by you know, A couple of developers ormaybe many developers, but there are not funded for it.
Gab Columbro: And to your point,have been maintaining it as a passion. You know, earlier in, in 2022, there hasbeen a pretty noticeable pretty, pretty famous situation where disgruntled. MPMdeveloper pulled a couple of packages I think was called Faker and Colors fromthe MPM repository, so from the Central Library repository.
Gab Columbro: And that startedbreaking bills all over the world. And the reason why the guy pulled it down isbecause, you know, he wasn't getting paid for them. So I think, you know, toyour point, especially when projects are under foundations, I think the LinuxFoundation is a massive job in funneling corporate funding into Open Sourceprojects and sort of maintainers.
Gab Columbro: But a huge focus thisyear, not just for the Linux Foundation, but really, you know, for the wholeOpen Source community out there is to better engage with corporate and withregulators and with policy makers in the understanding. Open Source power, CRpowers critical infrastructure that is actually potential national securitythreat here, and that we all have a role to play to sustain Open Source,whether it be through funding foundations, whether it be through putting sweatequity and developers on these projects and paying for them, whether it isthrough.
Gab Columbro: To maintainer grants,you know get a patron tide lift. There's multiple you know, startups thatactually allows you, allow you to fund directly maintainer over open an OpenSource project without actually employing them. So, big, big topic here, sortof big, big Pandora box I think that you, that you opened up.
Mike Townsend: Yeah. Interesting. SoI would imagine that that companies, So if I'm a developer and I wanna work onsoftware, I can go to a company and I can work on Open Source software, getpaid a salary. And then have that company sort of make the decision as to howmuch they want to invest. And there's, it's kind of an interesting equation,right?
Mike Townsend: It's like, in mostcases when companies hire developers, there's like product roadmap. The moredevelopers we spend, the more faster we build. And so there, there's like, theequation is simpler, but if I'm building an Open Source software, if I'm, youknow, Microsoft allocating thousands of people, If I'm building something thatI'm benefiting from, but other companies are betting, fitting from then, youknow, just like any shared resources, I'm, I'm incentivized to get more than Iput in.
Mike Townsend: So I, you know, I wantApple to, to throw in their developers. I want Google throw in theirdevelopers, and I would imagine that. That sort of stuff happens. What are the,what's the purpose of the foundation? So I could imagine that Open Sourcesoftware exists. You know, companies are, companies are funding it, they'rebuilding it together.
Mike Townsend: What's the, what do,what do foundations serve that that, that, that they, that we, we need as asociety that couldn't exist otherwise?
Gab Columbro: I I of course will bebiased in my answer. Sure. As a. Executive director of a foundation, butthere's a couple of layers to that answer. I think the first layer is, firstand foremost, foundations are a third party container of intellectual property.
Gab Columbro: So think about it asthe commons we are creating. neutral independent environment where intellectualproperty can be put in and pulled out in a, in an IP clean way to be, to, to besort of oversimplifying here and also to disintermediate any of thecontributors and participants in the sense that, you know, We have atransparent governance.
Gab Columbro: Anyone can join, soanyone can have a seat at the table of the foundation, but none of thecontributors or consumers has full control over the project, which gets me tothe second point, which is not only, you know, we help making sure that all thecontributors and all the consumers have the right agreements from anintellectual property standpoint.
Gab Columbro: To prevent, you know,issues down the line, prevent someone from suing you down the line. And ofcourse to defend the project itself in case there are, you know, trademark orIP claims coming from sort of the broader community. But that brings it to thesecond point, which is actually making sure, going back to that level playingfield of the transparent governance that we were discussing before, makingsure.
Gab Columbro: you know, the averageJoe contributing to an Open Source project has indeed the same rights on thatproject that say, a large corporation of course we can talk about membershipand what are the benefits of not only contributing, but becoming a member, apaying member, paying corporate member of these foundations.
Gab Columbro: But besides that, whenit comes to collaborating on the code, , everyone should have the same rights.The only thing that drives more influence is more contribution, whether thatbe, you know, Microsoft or whether that be, you know, Josh Mo in Nebraska.Mm-hmm. As we were saying before, and so. Not only ip, but also transparentgovernance and making sure that it's actually a welcoming and level playingfield for every organization.
Gab Columbro: Again, not just interms of decision, but also in terms of policies. Think about, you know, wework in a very regulated industry. Goldman Sachs, JP Morgan and City and MorganStanley, they would never be in the same room. Right? If we didn't have a verystrong antitrust policy, conflict of interest policy and the Phoenix teamwould, you know, in a way, police those interactions to make sure that they arealways along sort of according to policies.
Gab Columbro: And then the thirdthing that is more proactive, it's really. We have a vested interest inensuring the sustainability of the project and the long term longevity of theproject. So as I was saying before, we are an ally to the maintainers to growadoption of the project. And that means, you know, marketing engagement,producing proper documentation, creating what we call an on ramp that is assort.
Gab Columbro: Frictionless aspossible. And of course growing contributions because to your point before it'slike, yeah, let's put this software there and then the community's gonna comeand then contributors are gonna come. Well, that's not really how it works. Youknow? To your point, there is also a. Sort of a chicken and egg problem wherewhoa, I'm gonna start contributing once that other entity starts contributing,once we see that initial step.
Gab Columbro: And so, you know,foundations help in a way, breaking this dead look and making sure that we canactually make incremental progress as well as, you know. Give the best chancesto the project to succeed from a funding standpoint, from a promotion standpoint,from a legal standpoint, in terms of also protecting it from, from, you know,protecting the trademark which is really the, the primary asset that is ownedby a foundation like us.
Gab Columbro: I think that's a. Justin closing an important point, foundations that cast don't own the intellectualproperty that we develop. The intellectual property is Open Source, is under anOpen Source license. What we do own is indeed the trademark to that project sothat we can enforce the trademark and defend the project.
Gab Columbro: When you know peopleare saying, Hey, I'm compatible with Kubernetes, or I'm compatible withdinners, well, let's. That sort of really the steward of the project as awhole.
Mike Townsend: So I imagine being 5 01 nonprofit is, is critical. You can have a foundation that's not nonprofit.What's the, what are the metrics that you care about?
Mike Townsend: Do you care aboutlike, revenue from donations of these sponsor companies? Yeah. What, What arethe, like when you wake up on Monday morning and you're like, Okay guys, wegotta make this progress. What are the metrics you're looking at and where areyou on these? .
Gab Columbro: That's a very good,good question. So the general answer is that, of course the metrics sort ofdepend on the stage of the life cycle that you are as a foundation.
Gab Columbro: But let me start fromsort of the first point. Yes, absolutely. All foundations are nonprofits areeither 5 0 1 C three, as we say, charities or five. Six. So business leagues,trade associations. In fact the Linux Foundation is a 5 0 1 C six s. When wewere an independent company before joining the Linux Foundation, we were a 5 01 C six, and as you say, absolutely most of these organizations are actuallymembership organizations, nonprofit organizations that said revenue.
Gab Columbro: It's not our primarymetric. But it is certainly a great lagging indicator of satisfaction of ourmembers. So maybe it's worth spending one second on, on sort of the funding andsort of business model. As I said, this is not a pay to play. Anyone as this isOpen Source can consume or contribute to our projects.
Gab Columbro: That said, As amember, as a paying member, we have a set of membership tiers, you know,platinum, gold, silver, with different benefits. But you get, of course ahigher influence at board level. So depending on the tier, you have differentsort of access to the board. And of course, a bunch of, sort of additional servicesthat we provide.
Gab Columbro: There are not in anyway sort. Hampering that, that sort of transparent community collaboration, butgives you sort of added value first mover advantage, sort of early access toinformation and that type of stuff. Now in terms of metrics of course revenueis an important one. And we're now looking at again, this is public data, soI'm not sharing anything, anything private here.
Gab Columbro: But Phoenix, about athree and half million dollar foundation. And we certainly see that number as agood indicator of our growth. We, we are seeing, you know, over the last yearwe signed up probably 30 members. We're now at 59. It's growing fast across,you know not capital markets, but we're starting to get retail banks.
Gab Columbro: We now have assetmanagement and buy side firms like, well, Linton and point 72. We're seeingmore and more fintechs coming in. Cloud service providers, clearly there is,you know, this is such a complex workflow that there's value to gain for allthe different constituencies that are part, part of that workflow.
Gab Columbro: But when I look at,kind of go back to your question of metrics besides you know, money and revenueyou know, the ultimate metric is actually adoption. The ultimate metric is theroi. That you get out of Open Source. And to your point before, it's not aseasy to calculate the multiplier of investing in an Open Source foundation orinvesting in you know, contributing to an Open Source projects as opposed to amuch clearer sort of, you know, internal model of, of developing software.
Gab Columbro: That said, especiallyin an industry like financial services, we are putting a lot of effort intotrying to quantify roi. You know, not only at, to your point, cost saving level,but also at talent acquisition and retention level. Open Source is a huge wayof nurturing a more open ecosystem of talent, especially in financial serviceinstitutions that are in a major sort of talent crunch right now.
Gab Columbro: Yes, there's no uniquemodel to measure ROI of Open Source. I think it's very much dependent of thespecific project and of the specific foundation that you're working in, butideally, the ROI that the industry, and of course, particularly our members isgetting out of Open Source is ultimately, The metric that I care about, onesort of very direct proxy for that is adoption is literally how many people areactually downloading our projects because they're making use of it.
Gab Columbro: And so we are more andmore tracking. Wild earlier in our stage sort of earlier in our life cycle whenwe were trying to build our community. We. More metrics around contribution andsort of how many new projects or how many new contributors are entering ourcommunity right now as we have over 50 projects and we're more mature, it'sless so about continuing to bring in projects and more so about.
Gab Columbro: You know, seeing thisupward trend in adoption of our projects. And so then down the line, there'scase studies and success stories being able to actually surface this adoptioninto, you know, production use cases. There's gonna be a big focus of ourconference in December, the Opensourcing finance file.
Mike Townsend: Interesting. You know,it's almost like crypto and Web3 have taken, I almost look at Open Source andwhat you're doing as like the bridge between web two mentality and Web3. Youhave this governance model, your nonprofit you know, you have these differentlevels that people can buy into and contribute to the project.
Mike Townsend: Yep. It's, it's OpenSource and sense that anyone anywhere can contribute. And then it's like QA isdone internally, so people obviously can't, like, submit viruses or, you know,major flaws. Absolutely. So I almost think like Web3 feels like open soy orOpen Source by default. Root level contribution, root level foundationalbuilding is Open Source.
Mike Townsend: Yeah. And obviouslythe protocols themselves are just that, that's, that's the, that's the piece ofit. That is the magic aspect of it. Like blockchain operating on everyone'sdifferent node makes it so that it, it gives us the properties that we getexcited about. Do you see like do you see foundations existing?
Mike Townsend: I mean, foundationsexist today in Web3. A group of people of started LLC for profit company. Theyraise money for investors. Investors usually buy ownership in the tokens,although sometimes they buy ownership in the LLC and they get like, you know,some discount on the tokens. The tokens are launched, presale sale, everyonebuys into the tokens.
Mike Townsend: So now you have allthis money that goes somewhere. So then they create a, a foundation, anonprofit Yep. That, that owns the decision making. On how to allocate thatmoney to grow the protocol. And eventually people say, we wanna dissolve thellc. It's like LLC is the spark plug that starts the engine and then we getready to spark plug.
Mike Townsend: So I almost see the,when I've talked to founders, they, they sometimes will, when they're honest,express a frustration in the, in the challenge of how do you allocate money to.Actually grow the protocol. And what kind of the first wave of, of doing this,and I'm curious to get your feedback on it because it's something that likecrypto seems to universally struggle with, is like when you have a, you know,large project you know, Solana or Ethereum being a very, very large one.
Mike Townsend: Yeah, even, even someof the smaller ones, you know, they're managing sometimes tens of millions of dollars.They give money to developers who submit grant proposals to build apps on topof the protocol. So the success of the protocol is determined by how many appdevelopers build on top of that protocol, and then how many people use thoseapps.
Mike Townsend: So it's like you'rekind of like, what do you do? How is money best useful? And the problem is thatoftentimes developers will just submit proposals for grants to every project.They get money from everyone and then they go to the beach and drink Kool-Aid.Or maybe they like half ass, some, some project.
Mike Townsend: You know, it's like,it's not a genuine proposal to actually, it's not working is my point. It'slike we're giving money developers, there's, you know, they're kind of, it's alittle bit of a, like a show and tell and then the money just dissolves and,and like apps don't get built on it. And we're kind of in this place now, youknow, early September, 2022 of like the crypto market is not like we have theseprotocol.
Mike Townsend: and there's a coupleapps here and there, but it's not really like, and high gear, and I almost viewthe Foundation's work is to somehow better allocate money. So I'll pause thereand let you reflect on how you, what you've learned and how you sort of seemaybe words of wisdom on going forward with these foundations at Crypto Man.
Gab Columbro: I feel like thissubject that you brought up maybe warrants a whole other hour of conversationbecause I gotta say we started pH in it sort of previous embodiment called theSymphony Software Foundation in, in 2016, and that was, Really just pre sort ofICO and, and you know, one of our now sister foundation's, Hyperledger, whichis very much focused on blockchain, started very much at the same time.
Gab Columbro: And I've seen them, Iwas so envious in the first year for how quickly they were growing, and Istarted really toying with this idea. You're absolutely right. I've saidmultiple times that the blockchain ecosystem, the webre ecosystem, is actuallyOpen Sourced by default. You know, despite, of course, there are valid attemptsto private blockchains or even close source blockchains.
Gab Columbro: You know, think aboutRipple as an sort of, I think a main example. You know, generally, you know allthe way from Bitcoin. , you know, Web3 is Open Source. What it's not, I thinkis, and that's my hypothesis, it's not openly governed necessarily. The fact,one of my pet peeves at the beginning, like, Well, why is every single coinstanding up their own foundation?
Gab Columbro: And to your point, itis more about the disbursement of money and operating the network. Thennecessarily about hosting the code. So it's important to make thisdifferentiation. Foundations like us are primarily. About sort of sta managingthe static part of the code. Meaning the code itself, who has access to it, whocan download it, the ip, and you know, sort of resolving disputes, which to anextent prevent forks.
Gab Columbro: You know, if Bitcoinwas under a foundation, maybe we wouldn't have forks every six months. Serve asan example that said what you're talking about, like foundations to actuallyoperate networks in a more. sustainable in a more openly governed way. I thinkthere's a huge potential there, and there's a huge potential for notreinventing the wheel because let's be.
Gab Columbro: It is hard to stand upfor foundation and it's not easy to get it right. In fact, the LeonardFoundation two years ago launched a new concept of foundation called GovernanceNetworks. So it's really a blueprint, not necessarily to manage code as much.It is a blueprint to manage. A production decentralized network.
Gab Columbro: So it was reallydesigned with the idea in mind to actually, you know, provide support for manyof these you know, coins, blockchains, tokens and creating again, an ecosystemwhereby, to your point, not just the location, but also how do we engage the rewarddevelopers and how do folks have a specific role in standing up a node and inthe network you know, could be managed in a more centralized way.
Gab Columbro: And again, we mightstart the whole religious conversation here versus, you know, whether it shouldbe a DAO or a centralized organization to actually manage the developmentoperation of a decentralized network. I absolutely agree that there's a lot ofpotential there and it's one of my sort of major, I think, pet peeves.
Gab Columbro: We think that we canhelp some of these organizations that yes, sort of, some of these projectsactually do start Open Source, but not having sort of a clear open governancefrom the get go. , you know, raises eyebrows and, and sort of creates actualfriction in the adoption and the trust that people can build on that project.
Gab Columbro: I wanna close on, onone point you sort of touched as potential, you know, also sort of as OpenSource as a sort of bridge from web to web to web to Web3. I honestly couldn't agreemore. There's a very interesting article from Angela Strange partner at AndreenOvitz from. I think it was earlier this year or late last year, was talkingabout how Open Source is coming finally to financial services.
Gab Columbro: So I'm glad to see theVCs also waking up to this idea that there's a huge potential for Open Sourcefor fintechs, sort of jumping into sort of the commercial Open Sourcebandwagon. The reason why I mention it is I think her vision was compelling tome as she's basically saying, Look, we're moving.
Gab Columbro: You know, firstgeneration mainframes, second generation sort of siloed, SAS sort of web twotype platforms. next generation is actually having Open Source components thatare sort of these basic primitives that can be combined and can be put togetherto really create a new financial system, which is basically saying is that thiscould be a bridge between sort of the legacy world of banks into actually the,the world of FinTech and.
Gab Columbro: Again, I couldn'tagree more that I think Open Source has a major potential to bridge, you know,legacy and FinTech, Web two, web two and Web3. We really have to, to startconsolidating a little bit. Otherwise, we're gonna move from a. You know,siloed, centralized mess to a completely decentralized mess where you reallyneed point to point integrations and that's not gonna be better for end usersultimately.
Gab Columbro: Yeah.
Mike Townsend: Yeah. It almost seemslike you're, you're really embodying a lot of the characteristics of the onchain governance mechanisms. You know, you have these different, like you, youcan buy into different levels of contribution on the board. Well, how it happensin, in on a Dow is like, the more tokens you hold, the more votes you have.
Mike Townsend: It's, it's the sameconcept, and then there's like, okay, you guys have, you know, three or 4million bucks coming in every year. How do you spend that? I would imagineyou're thinking about people, you're thinking about, We need a person to dothis, a person to do this. You're not, you're not, you're not building aproduct per se, so you're, you're really, I, I would imagine you're agreeing islike you're spending it on people to solve specific problems for thefoundation.
Mike Townsend: The, I think there'skind of an open question mark is like, what do people who are runningfoundations or you know, leading contributors to foundations how do they spendthat money? Do they just keep it in a reserve? Like how do they, do they,should they give it out in grants? I don't know. Yeah. I mean, I, I, you, soyou guys would not give money to, Would you ever give, do you guys give moneyto developers to build.
Mike Townsend: Or is that pretty muchall, you know, volunteers and companies sponsored? And do you think that modelworks?
Gab Columbro: Very good question.Yeah, very good question and not, you know, I think sort of the answer to thequestion has some religious connotations, meaning. Some Open Sourcefundamentalist, and maybe that was me a few years ago.
Gab Columbro: You know, I had thered looks. I, i, as much as I say I'm not an Open Source hippie, theredefinitely used to be one. But the reality is that yes, some will tell you thatif you are paying the developers, then it's not really Open Source. The realityis that as we were discussing before, we are here to make sure that theecosystem can be sustain.
Gab Columbro: And we will dowhatever it takes. Again, assuming that there is interest on the project.Mm-hmm. , assuming that there is adoption of that project, wanna make sure thatall our downstream consumers, Yes. It's not a product, you know, I don't offercommercial support for my projects. That's, I think, the fundamentaldifference.
Gab Columbro: That said, the ethosand the desire to See our adopters, you know, championing our projects andshowing off how they're using and why they're getting it. It's really sort ofback to the metrics, sort of our ultimate goal. And so we do in certain casesfund specific development and there are different ways we can do that.
Gab Columbro: I. Certainly adiscretionary funding that I've agreed with the board about 200 K that I canspend throughout the year on specific sort of project augmentation initiatives.The Linux Foundation actually has a crowdfunding platform there. You can easilycreate those initiatives. You can have even people sort of chime in outside ofwhat PHS can sort of put in there from the, from the operating, from ouroperating budget.
Gab Columbro: So we do you. As muchas you have to be. Of course, be careful not to sort of pick and choose, youknow, who not to pick winners. But yes, we do definitely accelerate strategicdevelopments when it's something that actually delivers value to the wholeecosystem. And make you an example. One of our main standards is called FDCthree is about interoperability on the trader's desktop and across buy side andsell side.
Gab Columbro: And it's an openstandard, so there wasn't yet an Open Source piece of code implementing it.We're now building a conformance framework to make sure that anyone that saysthat it's compatible with the standard is indeed compatible with the standard.And that if you think about it's more of an offering that PHS as a foundationis building then necessarily.
Gab Columbro: you know, an OpenSource thing. And yes, so we actually took some money and invested it on aconsulting company that is building this conformance framework for us. Thatsaid, that is also built in the open because, you know, we're not gonna we'renot gonna go, we're not gonna become the ar beat. So ultimately the maintainersof the project need to see themselves that this is a good conformance framework.
Gab Columbro: But yes, we are payingfor developing it. And I do think that increasingly. We're gonna see more andmore of this. As, you know, the industry and the technology industry at largegrapple with the sustainability problem. In fact, I do think to the previousconversation that like, I think sort of Web3 and, and these Open Sourceprojects have something to learn from the experience of foundations like us.
Gab Columbro: I think we havesomething to learn. Yeah. Yeah. In terms of, to your point, how do you moreeffectively this births money? You know, that's part of me that. Well, itshould be a complete Dao. Who am I or who is the board, you know, to betterallocate that money. You know, there might be a better sort of community drivenway to do so.
Gab Columbro: And so I really lookforward to a potentially sort of two way learning process here.
Mike Townsend: Yeah. The one thing Ithink Web3 has that traditional web two nonprofit Open Source projects wouldn'thave is the element of. Like on a Dow, there's no trust. Like I don't, I don'tneed to believe the board members are opera.
Mike Townsend: You know, it's like Ivote and then I see my vote and I see everyone else's vote, and I know thatthere's a foundational technological framework that, that I trust. And if youtrust that, then all that matters is like, do do the people carry out theorders of the vote? Like there, there's definitely, that's always the, the off,off chain on chain world.
Mike Townsend: But at. Yep. There'sthat. And I don't know. I have no clue. And I bet it's hard for you to evendetermine like how much backdooring kind of shadow moving money is operating andopen. I'm sure it happens, right? Like humans are humans, but when you move tolike tokenized voting governance first, it it's at least for moves Yeah.
Mike Townsend: The, the potential forthat to happen. So I don't know, maybe, maybe that's the future in some.
Gab Columbro: Oh, don't get mewrong. I'm much rather deal yeah. Computers than with humans. don't, don't,don't, don't get me wrong. Like humans. We, we are the problem now. But look, Ithink it does depend on the mat. It goes back to sort of the maturity look,when we started five years ago, you can just imagine the, the 12 largestinvestment banks in the room.
Gab Columbro: you know, I was caughtin the crossfire of who's the, what's this bank doing? And I was like, Dude, I,That's literally what I'm not supposed to tell you. Like I'm a trust like you.You touched on trust and there's no doubt in my mind that trust is. the mostimportant, important, that's what you're selling, The most important currencythat I have with them.
Gab Columbro: But I had to build it.Right. And so, you know, it would be nice, yeah, to live in a zero trust world.But I also do believe that it takes, you know, mature folks. And so there mightbe, you know, a time where the sort of personal touch can help. Certainconversation, you actually can align drivers. I really, as a foundation chiefexecutive, I see myself as a sort of a chief aligner of, of forces and driversin the sense that, you know, two companies might be competing, but if you breakdown sort of the, the, the components, well, there might be a part that is sortof going in the same direction.
Gab Columbro: What my job is toidentify that part, sort of amplify it and, and see if we can sort of make acollaboration happen. And some of these maybe can't just happen yet on a fullysort of tech driven zero trust way.
Mike Townsend: Yeah, Yeah. Yeah.Super interesting. I, I really enjoyed hearing your story. Where are you both,where are you online?
Mike Townsend: Are you on Twitterwriting? Medium or somewhere. And then also tell me, are there any people inparticular that, or books that have inspired you along your journey?
Gab Columbro: Yes. Well, so I amavailable on Twitter. @mindthegabz actually mind the gabs is my Twitter. Sothink about Mind the Gap, just change a b for a P and, and, and add the z I'mavailable in GitHub github.com/mindthegab/ you can time me on LinkedIn and mostof my writing is actually on the, the pH blog, so ph.org/blog would be the bestplace to, to follow me. Actually, Next week I'll be in Dublin for the OpenSource summit in Europe. There's gonna be a sort of a big announcementregarding sort of my future.
Gab Columbro: So stay tuned there.In terms of who has massively influenced me you know, I could mention a lot offolks, but I think Norm Chomsky is one of the, the main ones I. , You know, Istudied computer engineering and when I was, you know, studying language theoryit was the first time that I sort of came across Norm Chomsky.
Gab Columbro: And you know, it, it,as I was studying, you know, in a very sort of geek you know faculty, Well, Istarted realizing that Chomsky had written the same, the very same languagetheory actually for languages for, for spoken languages. And it just reallyoccurred to me like how these, you know, there are people that just really cancross disciplines and cross boundaries and having a major.
Gab Columbro: Again, not just onsomething so geek, so left-brained as, as I'm used to, but they actually kindof span across, you know, the whole sort of I'd say range of, of disciplinesand subjects and cultures. So he certainly has been one that has reallymotivated me to. You know, try to make an impact beyond just the technicalnature of, of what we do.
Gab Columbro: And in terms of booksnot sure if necessary has influenced me directly, but 1984 from George Orwellis one of my favorite books. I , you know, definitely hasn't influenced me howI run the foundation. Mm-hmm. , nobody likes a big brother. But it, it iscertainly to me a really interesting reminder of, you know, people dynamics andyou know, how.
Gab Columbro: Quickly things can gosouth. You know, if you don't sort of build that, that trust that we weretalking about.
Mike Townsend: Yeah. Amazing howinfluential that book is. I read it recently as well, and it seems to just beso in the front of collective global consciousness for a reason.
Gab Columbro: Yeah. With great. On50 years later or 60 years later.
Gab Columbro: I think that was,Yeah. Maybe 80 at this point.
Mike Townsend: Yeah, yeah, yeah. Ithink you're right. I think it was written in the thirties or forties.
Gab Columbro: Yeah. Thirties orforties.
Mike Townsend: Yeah. Yeah.Fascinating Gab. Well, congrats on all the progress, man, and hope to have youback on someday.
Gab Columbro: Thank you so much forhaving me here. I really appreciated the conversation.
Mike Townsend: Of course, man.