Open Core: Making Money with Free Code – Philip Isik (TipTap)

About this episode

14 million downloads, 34,000 GitHub stars, top 730 of GitHub repositories worldwide – and TipTap is used by companies like LinkedIn and Claude. Philip Isik, Co-Founder and CEO of TipTap, has built an open-source editor framework that has become the invisible infrastructure behind content editing on the internet.

Open Source as Distribution Strategy, Not Business Model

Philip makes a crucial distinction: "Open source is not a business model, but a distribution strategy." This insight is fundamental for any founder considering open source. Open source works by design as top-of-funnel – it builds trust, attracts talent, and creates a stronger moat than patents.

Choosing the right license determines success. TipTap uses the MIT license, which offers maximum freedom: anyone can use the code for anything – even for competing products. "The MIT license is a no-brainer for developers," Philip explains. This liberal approach has made TipTap the market standard for web editors.

Four Ways to Monetize Open Source

Philip identifies four main models for how open-source companies make money:

Open Core: The open-source core is free, enterprise features cost extra. TipTap monetizes through real-time collaboration, AI agent access, and DocX export as premium features.

Hosting/Cloud: Offering managed services for your own open-source software – similar to GitLab or MongoDB Atlas.

Dual License: Different licenses for different user groups, often with a more restrictive commercial variant.

Support: Professional support and consulting around the open-source software.

TipTap: Seven Years to Overnight Success

What looks like overnight success today was a seven-year journey. TipTap started as an editor framework and is now the invisible infrastructure behind content editing at LinkedIn, Claude, and many other platforms. The success is based on a clear strategy: building in public and a community-first approach.

"We don't have a marketing department and grow purely through inbound," says Philip. Instead, the team invests time in Discord, practices building in public, and builds a loyal developer community that even defends TipTap on Reddit.

AI and Open Source: Where's the Real Moat?

When asked whether AI tools like GitHub Copilot will displace open-source projects, Philip responds pragmatically: "The buy-vs-build decision remains even with AI." The key question is "feature or platform?" – complex platforms and frameworks are hard to fully replace with AI.

The real moat lies in data, not software code, in the long term. While code becomes increasingly replicable, proprietary datasets and understanding of specific use cases remain the decisive competitive advantage.

KPIs and Community in Open Source

In the open-source business, different metrics matter: GitHub stars, NPM downloads, contributors, and community engagement. Tools like the LFX Insights platform help measure project health. Philip emphasizes: "As an open-source founder, you have to live on Discord and practice building in public."

When Open Source Makes Sense for Startups

Not every startup should choose open source. Philip recommends a clear analysis: Is the product developer-friendly? Is there a clear path to monetization? Is the team ready for intensive community work?

Successful examples like Red Hat, MongoDB, GitLab, and Docker show: open source can work – but only with the right strategy and long-term commitment.

Future: Standards Remain, Even with AI

Despite the AI revolution, Philip predicts: standards and established frameworks will persist. "Vibe coding" – intuitive development with AI support – will become more important, but fundamental infrastructures like TipTap maintain their relevance.

The lesson for founders: open source is a powerful tool, but not self-sustaining. Those who use it correctly can build invisible but indispensable infrastructure – and grow profitably while doing so.