How Papermark reached $900K ARR with an open source SaaS model

Executive overview

Most SaaS founders hide behind proprietary code. Papermark's founders gave the core product away for free — and used that to out-compete incumbents who stopped innovating.

Marc and Iuliia bootstrapped Papermark, an open source document-sharing and analytics platform, from a weekend project to $75K MRR in 18 months. The business runs on an open core model: self-host free, or pay for the hosted version and enterprise features.

Open source is defensible when you make the incumbents' moat irrelevant by eliminating switching cost entirely.

Why open source worked as a growth strategy

• The launch tweet — "I'm building an open source alternative to DocSend" — got 40K views in hours; the Monday ship tweet hit 100K
• Zero barrier to entry means users arrive already sold; many convert to paid because they don't want to manage self-hosting
• Building in public is natural when there's nothing to hide: share progress even when features are incomplete
• Participated in Hacktoberfest to accelerate contributions and visibility; faster shipping made incumbents' slowness visible to users

Four advantages of open source over proprietary SaaS

1. Defensible — giving away the core eliminates the reason for a competitor to clone it
2. Scalable — no onboarding friction; users self-select into free, self-hosted, or paid tiers
3. Community-driven R&D — contributors find bugs and ship features faster than any internal team
4. Trust — any enterprise security team can audit the code directly; no proprietary black box to negotiate around

Business model and numbers

• Free tier: self-host the open source project at no cost
• Paid tier: hosted version on papermark.com (managed, no overhead)
• Enterprise tier: self-hosted with an advanced-feature license
• Year 1: $20K MRR; mid-year 2: $75K MRR (~$900K ARR)
• 30,000 users, ~1,000 paying customers, 60 contributors, 7,000 GitHub stars
• North Star metric: views on shared documents (800K at time of interview)
• Cost structure: ~80% people (salaries + freelancers), ~15% growth experiments, ~5% tools

Tech stack

• Two Next.js projects: marketing site and the open source app
• TypeScript, Cursor (AI IDE), GitHub, Vercel, PlanetScale (Postgres), Trigger.dev, Resend, Stripe

How to find open source opportunities today

• Target incumbents that stopped innovating and moved upmarket to enterprise
• CRMs are a prime example: build a simple, niche-specific CRM rather than a one-size-fits-all tool
• AI lowers the cost of targeting smaller niches that were previously too small to serve
• Ask: is there an open source alternative? Is the market large enough for multiple players?

Advice for founders building open source

• Reach feature parity with incumbents first, then out-ship them
• Aim to be the clear successor, not just another alternative
• Convert open source excitement into product momentum — users, then paying customers
• Start open source from day one; jump in and contribute to other projects to understand the community dynamic