Danny Rimer: How OpenSource became a legitimate force

TL;DR

Investing in open source during the Y2K phenomenon proved to be a successful and profitable trend.

Transcript

so you went to the UK one of the big theses that you sort of seized on very early on and I think at exactly the right time was open source and this is when you and I met because I was a business week covering software and I was writing a ton about open source sort of be trying this legitimate force in the industry and I mean but you basically every... Read More

Key Insights

• 🤗 The Y2K phenomenon sparked a refresh in corporate infrastructure, creating an opportunity for open source solutions.
• 🤗 Open source projects in Europe, such as Linux and MySQL, gained traction and disrupted the market.
• 🤗 Open source companies faced cultural, business model, and acquisition challenges.
• 🤗 Investing in open source proved to be profitable, with successful ventures like MySQL generating significant returns.
• 🤗 Professional management often struggled to understand and manage the distributed nature of open source companies.
• 🈺 Open source projects cannibalized traditional business models, making them attractive targets for strategic acquisitions.

Questions & Answers

Q: Why was investing in open source considered a surprising thesis at the time?

Investing in open source was surprising because it was a cost-effective solution that emerged during the Y2K phenomenon when companies were refreshing their infrastructure. The model of sharing code with the world and getting paid for it went against the norms of American capitalism.

Q: What were the key drivers behind the rise of open source?

The Y2K phenomenon and the implosion of the market led companies to seek alternative and economical ways to build their infrastructure. Open source projects, particularly Linux and MySQL, gained popularity due to their scalability and cost advantages.

Q: What challenges did open source companies face?

Open source companies faced cultural challenges of aligning with the community and existential crises about their contributions to humanity. Developing a viable business model and proving themselves before getting acquired were also significant hurdles.

Q: Did investing in open source prove to be profitable?

Yes, investing in open source has been profitable. While companies faced challenges, successful investments in MySQL and other open source ventures have yielded positive returns. Open X, a marketplace for advertising, is another example of a successful open source investment.

Summary & Key Takeaways

• The Y2K phenomenon caused a refresh in corporate infrastructure, leading to the rise of open source as a cost-effective solution.

• Open source projects in Europe, particularly Linux and MySQL, gained traction and showed potential as disruptive forces in the market.

• Open source companies faced challenges in cultural alignment, business model development, and strategic acquisitions.