In a concerning trend, venture-backed startups are increasingly weaponizing open source software licenses, particularly the GNU Affero General Public License (AGPL), to create stealth vendor lock-in while maintaining the appearance of open source principles.
These companies release software under AGPL as a marketing strategy to drive adoption, but structure their approach contrary to open source values. While technically using an OSI-approved license, the implementation creates barriers that effectively prevent competition and user freedom.
The AGPL license, originally designed to protect user freedoms, is being leveraged by startups as an implicit non-compete agreement. Cloud providers and businesses hesitate to integrate AGPL-licensed software due to legal ambiguities and compliance risks. Startups capitalize on this uncertainty, knowing it makes competition impractical.
While these companies claim to offer alternative licensing options for those who cannot use AGPL terms, such alternatives rarely materialize in practice. Instead, customers are funneled toward paid cloud and enterprise offerings as the only viable options.
This approach allows startups to benefit from free labor, viral distribution, and product-led growth while maintaining control. When startups fail to achieve profitability, they often remove features from the core product or change licensing terms entirely.
The consequences become apparent when these companies shut down - enterprise editions and proprietary cloud features vanish, leaving customers stranded without continuity options. This outcome reveals that user freedom was never the priority.
Industry observers note this represents a concerning shift away from authentic open source principles toward using "open source" merely as a marketing term to facilitate vendor lock-in. While the AGPL license serves legitimate purposes for libraries and infrastructure, its current application by some startups undermines the collaborative spirit of the open source movement.
This pattern raises questions about the future of open source software and whether additional safeguards are needed to preserve its founding principles of transparency, collaboration, and user freedom.