Founder Stories: Guillermo Rauch, Vercel

How he turned open source code into a billion dollar business

He gave his software away for free.

Now his company is worth $3.25 billion, powering websites like TikTok and ChatGPT. 🤯

How a self-taught programmer turned open-source code into a billion dollar business 👇

At 16, a young coder from Buenos Aires was already making waves online. In 1990s Argentina, there wasn’t widespread access to high quality formal education. Like many, they turned to the Internet to learn.

Guillermo Rauch taught himself coding by hacking on Linux and experimenting with web development. He started building fast, dynamic demos that would go viral on platforms like Digg and Reddit.

Here’s where it gets interesting. In his time with the open source community, Guillermo learned a powerful lesson: this wasn’t just about using free tools. It was about breaking down pre-installed systems and rebuilding them into something better.

Open-source was his playground—a place to learn, contribute, and challenge the default.

After selling his first startup to WordPress, he set out on a new mission in 2015: make cloud deployment effortless.

What he really wanted was a seamless way to create and deploy software without the headaches of hours of setup and endless configurations. The clunky systems he encountered felt like chains, and Guillermo couldn't accept that as the norm. There had to be a better way.

He wanted to create a tool that could transform the entire developer experience. In 2014, he outlined his vision for a new web development framework called Next.js that made building web applications faster and easier. It had features like server-side rendering for faster load times, automatic code splitting for optimized performance, and file-based routing to simplify navigation setup.

And then he did something unexpected.
He gave it away for free.

His friends thought he was crazy. "How can you build a business by giving everything away?" they asked.

But Guillermo had a plan.
Next.js exploded. Developers around the world fell in love with its simplicity. Soon, major companies were using it to power their platforms.

Yet, he still wasn’t charging a dime for it.

So, how was this sustainable?

Enter Vercel. While Next.js remained free, Vercel offered premium hosting and deployment services optimized for it. Companies gladly paid for the speed, scalability, and convenience Vercel provided.

He had turned free software into a thriving business model.

Fast forward to today. Vercel is now valued at $3.25 billion, and Next.js has become the backbone of countless websites globally.

His journey proves that open source isn’t just about sharing code—it’s about creating an ecosystem that lifts all boats. Guillermo rewrote the rules of business by focusing on giving more than he took.