I can't speak for other companies, but we didn't look at Heroku and think to just create an open-source competitor. We thought of the idea after interacting with companies that migrated to Kubernetes that wanted their Heroku experience back, and later decided to be open-source. So I don't think our core value proposition stems from the open-source aspect, but it made sense for a lot of reasons -- unique to our product/team we felt that open-source was appropriate for a tool in the cloud-native ecosystem and since all three of us are developers, it was our natural inclination.
On the technical side, being open source has come with a bunch of benefits thus far -- we get detailed bug reports since our users are developers, we get a channel where devs can keep tabs on our progress, it gives us a public log where we explain our decision-making in the specs for various features, and it forces us to be better technically. We had to create a development process rather than just push code (when we worked on projects in the past, we didn't follow best practices with regards to PRs, documenting issues, reviewing code and testing changes, because we were solely focused on immediate velocity, which we would have regretted if those projects ever got off the ground).