GNU/Linux.

Aware of any cottage GNU/linux-like industries where people earn a living besides consulting?

Are there businesses built on open-source? I think I heard of such a thing but I haven't researched it.

Yes, the most notable one is RedHat:

https://www.redhat.com/

Some more are listed on the FOSSjobs wiki:

https://github.com/fossjobs/fossjobs/wiki/resources#employer...

Not many successful ones in comparison.

It's a prisoner's dilemma type situation.

Also known as the natural order of things.

Sounds like an engineering challenge.