--- Shannon Roddy <[EMAIL PROTECTED]> wrote: > > It was in the money section no less.... I imagine a > few more articles > like this and the investor types will start looking > into this again. I > bet people will start looking for another VA Linux > type IPO. > > Shannon
IMHO I think that most Open Source commercial companies would do better to stay away from Public Offerings. In the end, Public Stock offerings are a vehicle to raise money. That money, like all investments, comes with strings attached. First, you are a publicly traded company with all of the public scrutiny that implies. While that may not seem like much of a burden, the company bears all of the costs for that accounting. Win, lose, or draw, the accountants and lawyers get paid. Their services do not come cheap either. I would put that under overhead you can live without. A second string is loss of control. A public company is answerable first to the creditors, then to the stock holders, then to the market, and lastly to the employees. In the Open Source model that puts the cart firmly ahead of the horse. That is enough really to damn the publicly traded model for most Open Source companies if you are honest. But I would be remiss to ignore the other strings. If you are publicly traded you are "on the map" for press attention. Any attention is good attention for advertising purposes, but if your books are open to the public and you keep having to guesstimate how much money you will make in a public arena with your books face up on the table, it makes life harder than it has to be. If they can see your ledger, they can swamp you with FUD, you have to spend real money fighting. In a low margin environment, anything that detracts from your core compentencies is wasted effort. There is a reason over 70% of the people in this country work for small businesses. Think about it. In a low profit margin industry (most all established markets are low-margin by definition), there are three key factors to staying in business on the macro scale: agility, flexability, and control of costs. Those are marketing terms with concrete meanings. Agility has to do with how fast you convert a business plan into action. If I do not have to answer to a board of directors and seventeen exchange bodies, I can do it tomorrow if I have cooperation in the company. Flexibility has to do with how fast I can react to market forces, via lay-offs, hiring, shifiting of contracts, pay packages, inventory reductions, increases, etc. As a small business, my accounting overhead is between me and the tax man. I can accept any loss I can live with as the only profit taker. If I need to take a personal loss for a bad decision, and thereby shield my employees, I can. If I choose to reduce my profit to share it with the people that actually earned it for me, I can. Control of costs means I have drakonian measures available in hard times publicly traded companies do not have, especially in "right-to-work" states. I also have the ability to reward performers beyond what I could do as a publicly traded company. Take a look at the local companies in the IT sector. Name one that is a publicly traded company. EMCO is a local privately held, locally owned, and operated company that has braches in Houston, and California. they are lean, responsive. IMHO, it is not the company it used to be, but it has wandered from it's family roots as it has grown. The nice couple that started it would not have let some of the people they let go leave the company, and it has changed. It is still here, and feeds a lot of local families though. Perhaps Ms. Janice has been right. It is real hard to argue with success. Some of the people that no longer work there were really good people and very good at what they did, but does the fact that Gary Lauve no longer runs the PC Shop hurt or help the company? Since I no longer work there I can't say, but I know twenty good men and women that would not be able to feed their families if EMCO were not doing OK. More to the point, it is nobody's business but MS Janice what the ledger looks like. She could run that company out of her personal bank account for ten years without losing sleep. EMCO is not her only source of income. She has the capacity to weather the lean times, and the ability to capitilize on opportunities, because she runs a small business, and she is one smart lady. (Never, ever play poker with Janice.) As far as I know she has never played poker, but just as someone who has sat through some negotiating sessions with her (on both sides of the table), don't do it. Her eyes have steel shutters. She is a fantastic lady, and she is very much a lady, but have no illusions, she well educated, and very savy. Take a look at an Open Source company, Libranet for instance. They sell a Debian desktop. Debian, for the love of God. If ever there was a geek's distro, debian is it. Debian is free. Debian is not for everybody, but it is at the high end of Linux. John and Tal make a living programming Unix apps and providning a really sweet Debian desktop. No, that is not an oxymoron. They are a family shop doing something they love for a group of people that one can only describe as dedicated, and they make money doing it. They could never make it as an IPO, the over-head alone would kill the distro. Which is my point. Open Source vendors do not have to starve, but they have to realize that the conglomerate International Corporations cannot compete in this arena. Open Source is about a lot of individuals. Loyds of London did not open the United State frontiers. They would have if they could have figured out a way to make money at it. But the trading posts and way stations were out of their kin. Open is source is about people relating to people, and that is a Small Business model. I trade emails every week with people I did not expect to write back. You have a problem with webmin, write the guy, just be sure to try and find an answer on your own first. Heck, Peter Jennings personally answered the email I wrote him congratulating him on becoming an American citizen. The Internet has made the world small enough that the mom and pop shop can compmpete. Why give up control for a few bucks. take out a loan, issue a bond, take in a partner. Stock can be a real stupid way to go. A lot of people will be looking for Linux shops to invest in, but if I were a Linux shop, I would sell them long-term, low-interest bonds, with a premium, a nice fat premium, maybe even a 108%. ===== Warmest Regards, Doug Riddle http://www.dougriddle.com http://fossile-project.sourceforge.net/ http://www.libranet.com -- "Firearms are second only to the Constitution in importance; they are the Peoples' Liberty Teeth." - George Washington -- __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com
