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ActiveState Founder Steps Aside
Lumpish Scholar writes "ActiveState founder Dick Hardt has quit. Or, as the press release puts it, "ActiveState Expands Board & Founder Steps Aside." No reason for the resignation was given, unless you count, "The company is looking to become a $100 million company, and they're looking for someone ... that [sic.] has that experience." ActiveState (profitably!) distributes its own proprietary products, and also both free and commercially supported versions of Perl, PHP, Python, Tcl, and XSLT, having given back significantly to the free / Open Source communities associated with those languages."
It's worth to say that Larry Wall (perl founder) and Guido van Rossun (python founder) are now in their payroll. So this is an important contribution to the open source community
Only idiots use "that" to refer to people. "That" is used for essential clauses, "which" for nonessential. Using "that" for "who" is like using "who" where you should use "whom." Sure, people do it because they don't know the proper grammer, and it's "accepted," but it sounds stupid. Hell, this is worse than the who/whom thing.
The purpose of a corporation historically has been twofold:
First and foremost, to survive the creator. It's easier to avoid inheretance and contract problems when a founder dies if there is a corporate entity as opposed to individuals.
Second: separate liability.
In the case of MSFT and others who don't pay dividends, you are buying a portion of the assets of the company. You assume that through wise action of the company, the company will gain assets, thus you will gain assets.
But MSFT really should pay some dividends. It would increase the value of their stock, and set a new model that other tech companies would likely be unable to follow, lacking in cash as they are.
Jesus was all right but his disciples were thick and ordinary. -John Lennon
Tarballs, zips and diffs of all recent ActivePerls are here.
Why does every company have to become $100M+ in size. Why can't they grow the market that they serve now?
Actually the answer is quite simple. Whether you think it is sensible or not is up to you.
ActiveState are a Venture Capital financed company. This is the list of their investors:
Greg Aasen, Kevin Huscroft, PMC-Sierra; Matt Dion, Crystal Decisions; Haig Farris, Fractal Capital Corp; Paul Lee, Don Matrick, Electronic Arts; Amos Michelson, CREO Products Inc; Tim O'Reilly, O'Reilly & Associates; Hadar Pedhazur, Opticality Ventures; Michael Tiemann, Red Hat
I don't know how much money was put into the company, but a good guess is the $10 million - $40m range; perhaps more. The basic math of VC funding is something like this:
1 in 10 VC-financed companies make it. Therefore 9 in 10 fail. To break even a VC has to make 10 times their investment back. Therefore for a $25m investment the company has to be sold (through IPO or merger) for at least $250 million. To attract investor money that otherwise goes to the stock market or bonds or whereever you need to do better than break even. You need to have 2-3 times returns at least. So you need to be able to invest $25m and get back $500-$750 million at the "liquidity event".
You want to sell a company for $500 million? You're going to need to be making profit and have revenues in the $100m/year range.
Venture Capital is a high-risk high-reward deal, where the vast majority of investments fail. The handful that succeed have to succeed big in order to support any VC money at all.
If a company wants to start small and grow slowly it should not take VC money; there are lots of other sources of financing, but they will be for much smaller amounts. Once you've taken VC money, don't start moaning when the investors want you to live up to the other end of the bargain. They give you $25 million, you give them back a company with huge revenues.
Sailing over the event horizon
Thought I would post to clarify why I stepped aside. ActiveState is doing very well right now and we are about to grow out our management team and capitalize on our new product line PerlMx, an anti-spam, anti-virus and corporate communication policy server side solution. I have never run a large management team and in discussions with my board, we decided ActiveState was more likely to be successful having me be part of the management team rather than leading it, allowing me to focus on growing product capabilities. ... and if anyone thinks they have an original joke on my name, I'd like to hear it
2. Call me Dick.
3. Corporate Communication Policy enforcement are often tasks such as scanning outbound email for profanity or intellectual property leaks. The scenario you talk about is what Exchange and Notes do :)