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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."
Why does every company have to become $100M+ in size. Why can't they grow the market that they serve now? It's this need for disruptively fast riches that's driving the WorldCom silliness. It's really OK to be a small to medium company with steady growth.
My prediction is that they'll take on huge debts & expenses to try to expand, fail in 90% of their new "expansion" markets, and die completely or settle back to their same growth curve and niche only saddled with several times more debt. Are there any studies on companies trying for excessive growth?
This model for building a tech company has been basicly the only way to create a company here in the US since the 60s - the VCs understand how it works, the execs, the engineers all know how it works. Most of these companys die - maybe 2 out of 10 live to go public - it's the risk you take building a startup - it's also effects the scale of things the VCs try for - they need those 10-20% of BIG successes to pay for all the investments that fail. The basic business model for people starting this sort of company is "we will build a company that's worth something and sell it on the stock market". You make money from an ever increasing stock price.
Of course it's not the only way to build a company you can start a small company and grow it slowly financing it out of profit - this is really hard to do (I know I've tried :-) - but not impossible - I've known a number of people who've built such companies - you have a completely different model for your business "we will sell the stuff we make and take home part of the profits". You make money from your profits.
The big advantage of the DIY company is that you can stop growing at any point. Besides, because you're living directly off your profits you don't have to grow for ever to keep making money - you can stop at $1M or $5M or wherever you're comfortable. The big downside is you're probably spending your own (very real) money, not some VCs.
Neither Larry nor Guido are ActiveState employees. They are on the Technical Advisory Board. However, Sarathy (former Perl pumpking), myself (Tcl core release manager), David Ascher (Python notable) and many other notables are developers at ActiveState that do spend time contributing back to the core of our respective languages. It is, was, and will still be, part of our business.
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
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
I was at the final "let's get rid of Dick Hardt" board meeting fiasco. What a mess. . . here's what happened.
/^(f[uc|rea]k)ing m.*dia.*$/$1 you/" and Rossum starts shouting about how no-one respects his space and how it was time for something completely different, blah, blah, blah. ESR starts mumbling to Guido about how Ovitz is finally going to get whacked, and then it really gets weird. . .
.
Everything starts out ok. . . typical boring board minutes stuff, somebody announces that we have a special guest and then who walks in? Fritz Hollings, Michael Eisner, Kenneth Lay and the DVD Consortium, trying to jack the whole proceedings! Well, Van Rossum and Wall completely freak out. Wall is like "get out of here you
The whole room goes silent, the lights dim, this evil-looking powerpoint starts playing and this menacing voice starts calling for the elimination of Dick Hart. . . When I saw who it was, I couldn't believe it. I always kinda figured Microsoft's investment might sink the company, but I never knew who was behind all of this - most of the other ActiveStaters never would've guessed it either...A cloaked figure emerged from the break-room shadows and revealed himself to be. .
Cowboy Neal.
(did you guess right?)