While everyone else on this planet was at E3, I hunkered down to Day 2 of the Open Source Conference at the University of Toronto. Today’s themes were business models and technology. This day ran over 12 hours long – from 8:30am to 9pm!
“Business Models Don’t Matter”
Bob Young, co-founder of Red Hat and Lulu.com and current owner of the Hamilton Ti-Cats, was even more pragmatic when discussing Red Hat’s business model; that is, they had none. Having just been laid off from being a computer salesman, Young’s goal was to feed himself. Their strategy was to listen to their customers’ needs.
Lamenting the free market: “Customers are evil. They always want more for less money. The second less evil people are your employees. The only people who understand you are your competitors.”
In the early years, most industry insiders predicted Red Hat was doomed to fail. In 1994, Scott McNealy joked that it was “hard to calculate a P&L without a P”. Despite this, Red Hat continued to flourish, because only at Red Hat could customers “get software that could do what they wanted it to do”. Red Hat ended up winning InfoWorld’s OS of the Year award five years in a row, from 1996 to 2000.