CyanogenMod is now a business. I hope it’s next WordPress/Automattic or Xiaomi, and not Twitter/Obvious

CyanogenMod – one of the most popular Android ROMs, is now a business. The team behind this Android ROM has formed a company, Cyanogen Inc., and raised $7 million from Benchmark Capital and Redpoint Ventures.

Their goal?

To become the third mobile operating system, ahead of Windows Phone and Blackberry, no less.

Can they do it?

Maybe.

While #1 and #2 slots among mobile platforms are firmly held by Google and Apple, #3 is certainly in flux, with no less than 4 viable contenders –Windows Phone, Blackberry 10, Firefox and Tizen –  vying for the spot. And, according to some metrics, e.g. number of active users – which Cyanogen estimates to have 20 million of – they are already a solid #4. And that’s with a horrific installation process that only works on a fraction of available Android devices, and may require 23 steps, that only really dedicated geeks can get through.

If history is any guide, it shows that no amount of previous experience, developer and financial resources is a guarantee of success in this this business. Microsoft has been trying to break through with Windows Phone for 3 years now, and their user base is comparable to what a team behind CyanogenMod achieved.

So how will Cyanogen do it?

Basically, by doing the same thing they have been doing since 2009, only better and faster.

Most of the key ROM developers are now part of Cyanogen Inc., as founders and/or employees. With Steve Kondik as CTO and Koushik Dutta as VP of Engineering, and a total team of 17 working full-time on CyanogeMod.

You may have noticed an increased pace of CyanogenMod development in the past few months, with new versions, updates and new phones appearing faster than ever. Well, that’s the result of Cyanogen becoming a business and having a full-time paid staff working on stuff. They closed the financing deal in April and have been quietly hiring and building since then.

Now they are almost ready to deliver the first product – CyanogenMod installer - to Google Play, and decided it is time to announce themselves to the world. The installer should drastically simplify ROM loading process on Cyanogen friendly Android phones.

CyanogenMod installer

Future steps include growing the list of compatible devices, expanding user friendly features of CyanogenMod and no plans to charge the users. A deal with hardware manufacturer is almost ready to go, too.

But how will they make money if CyanogenMod stays free?   

That’s a good question. And the answer is – they will, hopefully, figure it out. Eventually.

According to Kirt McMaster, co-founder of Boost Mobile and CEO of Cyanogen Inc.:

“If you’re the default OS on a device and you have 50 million users, there are a lot of ways to make money. It’s not just about building a user base. It’s about building great services you can’t get anywhere else.”

And he’s right. But way too modest.

There’s no way to make enough of return on that $7 million venture capital investment with just 50 million users, especially if you already have 20 million of them. To raise that much money and not to give all the company away, Cyanogen’s valuation now must be around $20-30 million. And venture capitalists look for at least 10x return on that investment. So the plan is for Cyanogen Inc. to be worth at least $300 million, with an optimistic goal of $1 billion and more in a few years, when it goes public or gets bought.

And, in such a hot sector as mobile, there’s a good chance they will get there. Just look at Xiaomi, which started more or less the same way 3 years ago, by making their own Android MIUI Mod, and is now profitable and worth $10 billion.

So, if I’m current CyanogenMod user, a big fan and/or contributor, this is a good thing for me, right?

Short term – most definitely, yes. You can expect new versions, new features, easier installs, new compatible devices,  appearing way faster than before. Better support than anything you experienced to date. And, if you are a developer and contributor to CyanogenMod, you can even land a job at a hot new startup, with options worth loads of money down the road.

Long term? Who knows – it can go either way.

Cyanogen is now a business, after all. And a popular project/platform, becoming a business- can be a great thing. My favorite example about how an open source hobbyist project becoming a business turns out the best thing to ever happened to it, is WordPress and Automattic Inc.

WordPress started as a hobbyist project in 2003. In 2005 it became a business called Automattic, raised venture capital, and now is a profitable company with 190 employees, worth almost $1 billion. It is still the driving force behind WordPress. And WordPress itself is now the dominant publishing platform running a significant fraction of the Web, with a thriving ecosystem of businesses built around it.

But promising popular platforms with thriving developer ecosystems can go bad too, screwing early enthusiasts and contributors, once they become too focused on the business opportunity in front. Twitter, to me, is one of more glaring examples.

Before it exploded into mainstream, Twitter was a very basic service with thriving ecosystem of apps, services and even businesses built around it. At then they reached a point in their life where they had to decide what kind of company they want to be. They discussed two options:

  • become an API for real-time Web, focus and technology, enable ecosystem of apps and services around it, and figure out how to make money down the road
  • become a media company, and focus on driving an advertising revenue

They chose the latter. And, despite the exploding popularity, it was all downhill for early enthusiasts like me, or a lot of developers that invested in Twitter platform.

Twitter closed or severely limited their API to any developer or business that conflicted with their media company goals. They bought out most popular client apps and then neglected and/or screwed up most of them. My desktop Twitter client experience today is way worse than it was  3 years ago. I don’t even bother to check official mobile Twitter apps anymore, because I have this impression that every single update they made to them, made my experience worse. Heck, I still have deprecated Tweetdeck Air version running in the background, just to have new tweet desktop notifications popping up  in the corner, while I work.  And the developer of my favorite Android Twitter client- Falcon - has to jump through hoops to keep it available, just because the app became too popular.

Granted, Twitter was never open source. But, with it’s thriving developer ecosystem, it held a lot of open source like promise in its early days.

So let’s hope Cyanogen Inc. goes the WordPress, and not the Twitter way.  Which seems very likely today, since its origins and founding team’s values are much more like that of Automattic than of Obvious Corp.

Via: Cyanogen Blog, TheVerge, Engadget

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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