Comment by dang

FWIW, I've spent time at YC open-source events where later-stage founders advise earlier-stage ones, and this isn't anything like the advice they give. They would describe that as a terrible strategy and tell startups to avoid it.

An example of actual advice I've heard, using the terms of your comment, might be: keep "the nerds" happy with free open-source software that actually works, then charge money for things that companies (especially enterprise companies) actually prefer to pay for.

The "paid hosted offering" pattern is the most common of these, since technical users might want to run their own instances but IT departments typically do not.