Is Open Source killing entry level product startups?

After reviewing PAW yesterday, I was thinking if Open Source is really killing entry level product companies or if it is enabling them. I had this dilemma because what would prevent any one from implementing PAW in open source and give it free to every one! True, one may not be implement features such as PAW Exchange, but still the core product can be implemented in open source (as it is PAW itself is based on Open Source code base) and provided as a freeware, if some one decides to that.

Due to open source, lots of products (some tools, utlilities, UI libraries etc.)  as business ideas are no more viable. But more than that, may be due to Open Source, aspiring folks are not seeing traditional software product as a viable and this is creating a high entry barrier to product space. For some one to create a new product, they really need to invest more money and time, as one can get into this market only with medium/high end products.

Right now for a vast majority, only aspiration is to start a website (see http://www.suckystartups.com/), hope it will become hugley popular and users will flock to visit  and hopefully make some money some day. Open Source probably made it very easy to create these websites and made the entry barrier almost nil.

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