Originally Published: Sunday, 15 October 2000 Author: Emmett Plant
Published to: daily_feature/Linux.com Feature Story Page: 1/1 - [Printable]

It's Never About The Benjamins

A friend came up to me last week, and told me about the incredible pains that have put his Linux company through the wringer. Investors wanting to rush to the market for the quick buck, and having to drop staff members to find the fastest route to profitability. This certainly isn't what he had in mind when he started his company.

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A friend came up to me last week, and told me about the incredible pains that have put his Linux company through the wringer. Investors wanting to rush to the market for the quick buck, and having to drop staff members to find the fastest route to profitability. This certainly isn't what he had in mind when he started his company.

It seems that the problem is that investors are interested in quick money, especially in the tech industry. The drive to move companies to the stock market as quickly as possible is put forth by investors, not by technology or the community. Investors need to move on the hot and popular, and the same hype that got Linux on millions of desktops is the same hype that is helping to destroy and dismantle the smaller Linux companies that started with a dream. My friend has a company that was originally intended to be owned by the community, not by the market.

I've met a lot of people who have started Linux companies, and very few of them are motivated by money. They're motivated by ideology, community and technology. A lot of them had more than enough money when they started their business. Moving to the stock market isn't just good for getting IPO cash to get more staff and equipment, it's also good for Linux as a whole. If Linux stocks continue to perform well, Linux becomes more of a viable option for big-iron tech investment.

I've been told that Red Hat (not my friend's company) was rushed to the market before they were ready. I wouldn't be surprised; like I said before, this is all driven by investors, not by the natural organic growth of a company. Some of the greatest companies in the Linux space are privately held, and expect to be so for a very, very long time. This means that the people running the company make all the choices, find investment on their own terms, and generally do moderately well. Unfortunately, this also means they don't have a huge money warchest, and might miss payroll occasionally.

You know, I always thought we had to take back software from proprietary interests and monopolistic tendencies; I never thought we would need to take back Linux from the stock exchange. The initial run of big IPO's, like Red Hat, VA Linux, Cobalt and (then) Andover made a big impression on Wall Street, but I'm actually looking at next year's new Linux companies for some sound reasoning and strong business development.

My friend needs to rebuild his company from the ground up. It's sad, but most of the work he has been doing for the past year needs to be reconsidered and redesigned for a push towards profitability. Not 'better product for his customers,' not 'better conditions for the staff,' but 'profitability.' Linux needs to come from the community, and it needs to be motivated by technology and the industry. I don't know if this is the secret to super-big Wall Street investment returns, but it's the secret for building a strong operating system. The more focused we are on good technology, rather than big money, the better off we'll be.





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