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Linuxcare Business Shuffle (UPDATED)
We've heard rumors that Linuxcare's upcoming IPO has been shelved for now, and that Linuxcare's CEO and CIO have been removed. This comes right after the roadshow was delayed, which now appears to be cancelled. At this time, I haven't heard back from Linuxcare, so haven't heard their side of the story. However, several reliable sources have said that there've been "irregularities" in revenue recognition, something that the linked article also touches on.Update: 04/07 11:22 by H :I've talked with Art Tyde, Founder of LinuxCare. He confirms that the IPO has been delayed - but that they believe an IPO is in their future. He also did confirm that the CEO, Ferdinand Sarrat, has parted ways with Linuxcare, but that the CIO has remained onboard, and that the management team remains committed to the values of the community and what the company was founded on.
Rumor no more .
Bikeworld.com/weathertools.com/gpstools.com did over $4M in sales last year ($1M in December alone) and we've never had an unprofitable year.
How do we do it? The formula is quite simple:
1) Don't piss away money. We don't have fancy-shmancy offices with pinball machines and conference rooms full of $900 Herman Miller chairs. Nope, we build most of our own office furniture.
We don't waste tons of cash on super-duper high availability server solutions. We don't have fibre-channel disk arrays and loads of CPU power? Why not? Because we don't need them. You don't need a highly dynamic, CPU intensive e-commerce application to sell a lot of product. We use static HTML for the most part, which helps us save on equipment costs.
We don't hire five people to do one person's job. You see this all-too-often at internet startups. When you hire tons of people, they tend to get *less* work done. They spend most of their day in meetings argueing about trivial things.
2) Pick a business model that actually has a chance of selling something.
If your business model relies on advertising for revenue, give up now.
That blowthedotoutyourass.com thing had it right on the dot (no pun intended). "ButIdontwantmytoothpastedelivered.com". The only things that people will buy on the Web are things that are not readily available in their local market. Amazon does so well because comprehensive book and music stores are still somewhat of a rarity. We do well because most local bicycle shops have very small inventories and ridiculously high prices.
3) Never forget that you make money one sale at a time. Every sale and every customer counts. Unless you deliver customer service that is ABOVE AND BEYOND the ordinary, your customers will shop elsewhere.
4) Be weary of outside investment. It's a lot easier to piss away someone else's money than your own.
I was an early employee of Linuxcare, fired by Nassaur last November. I think others can now see why I consider this a peculiar sort of honor.
:)
I hadn't suspected that the CEO was on the way out, but I knew that the CIO was likely to be. His very expensive infrastructure was completely inappropriate (and unnecessary) for a Linux services firm, and all the geeks knew it at that time. Instead of focusing on Linux, he focused on expensive, proprietary software and ridiculous hardware implementations. It was the geek equivalent of buying a Lamborghini when you really needed a Honda.
This is the main part where the article erred -- Sorcerer wasn't the "heart" of the business at all. Nassaur *wanted* it to be. Of course, he would go into a company, spend a bajillion dollars and be out in a year (read the S1/A for his history if you don't think so...). What did he care? He had his equity and his high salary and was out of there.
What Linuxcare desperately needs, if it is to survive, is a CEO & CIO who care about the Linux space AND about actually building a Linux services firm that serves its customers, not a few people at the top. My resume is in the mail.
I'm sure, given appropriate people, that Linuxcare can be a much better company after this. My heart goes out to all my friends there after this shocking blow.
Breathe deep folks,
_Deirdre