The faster the better? Innovation speed and user interest in open source software

Abstract

It is often believed that for open source software (OSS) projects the faster the release, the better for attracting user interest in the software. Whether this is true, however, is still open to question. There is considerable information asymmetry between OSS projects and potential users as project quality is unobservable to users. We suggest that innovation speed of OSS project can signal the unobservable project quality and attract users’ interest in downloading and using the software. We contextualize innovation speed of OSS projects as initial release speed and update speed and examine their impacts on user interest. Drawing on the signaling theory, we propose a signaling effect through which a higher initial release speed or update speed increases user interest, while the effect diminishes as initial release or update speed increases. Using a large-scale panel data set from 7442 OSS projects on SourceForge between 2007 and 2010, our results corroborate the inverted U-shaped relationships between initial release speed and user downloads and between update speed and user downloads.