Linux... Up Against the Wall
The small-town bar was filled with the light of the afternoon sun pouring in from the front windows. There were the usual furnishings: the bar itself, various high tables with similarly heightened chairs, a jukebox... and on one wall, a flat monitor screen, encased in metal and displaying advertisements for local arts and music events.
Across from me is the man who invented that monitor and the content delivery system that runs it, Eric Kanagy, CEO of RedPost, Inc. I have traveled all of 40 minutes to Goshen, Indiana to meet Eric and find out what's the big deal about an electronic bulletin board that runs Linux.
The first thing I should mention about Eric is that he seems to be the most laid-back entrepreneur I have ever seen. Most of the time, when I meet up-and-comers in the software business, I find people who are highly charged and excited about what they are doing. Sometimes I suspect that this is an attempt to pass that excitement onto me.
Not so with Eric. He seems relaxed and very confident in what his four-man software company is trying to achieve.
That's correct, software company. Because even though RedPost makes standalone PCs that hang on walls and deliver ad content, the real drive behind this company is to sell software.
You would not know it upon examination, because at first glance, this looks like a small boutique hardware company with aspirations of becoming an advertising company on the side. But in talking with Eric, I learned what was really going on.
First, the box itself: before coming over to grab a bite to eat for the interview, Eric had cracked open one of the cases to show me what was essentially a solid mini-PC. No fan, no spinning hard drive, just a 200MHz fanless CPU and a Flash drive connected to a 19-inch LCD monitor and a WiFi card. When reassembled, it looks like what the early media reports were calling it: a do-it-yourself electronic picture frame.
Here's where the open source comes in: RedPost is shipping these boxes out to anyone who wants to hack them and add desired functionality. This is made all the more easier by the fact that the box is running a modified version of Damn Small Linux (DSL). Developers, both of hardware and software are invited to play with the RedPost/Kit box and download the DSL software to tweak to their heart's (or business') desire.
To further demonstrate the capabilities of the RedPost product, the company has initiated a proof-of-concept pilot program in Goshen, with six RedPost machines placed in local venues to advertise arts and community events in the Goshen area. Local vendors pay a nominal fee to get their event ads rotating on the RedPost boxes--ads that RedPost's delivery management software distributes to all the machines on the network.
And it's there, really, that RedPost is basing its revenue model--sales of the content management software for the system. RedPost does not want to be an advertising company, but it is willing to sell its software to advertisers, festival managers, hospitals... any organization that needs visual information disseminated in a timely fashion.
Eric believes this strategy is going to work, because this is an area that's wide open right now. There are other digital advertisers out there, such as Scala and Minicom, but these companies are focused on selling their hardware and keeping the distribution software in-house. Their customers, in other words, buy the machines and rely on the ad agency to sell and send out the content, giving the customer a cut of the ads that ultimately will pay back the initial cost of the video machines.
Eric's model flips that around. The boxes are still sold, but they come in at a far lower cost than the huge plasma screens digital agencies use. And the customer gets to sell ads and keep the revenue all to themselves. If that's what they want to do with it. As I wrote earlier, cultural organizations and health-care agencies can uses these machines and the deliver software, too.
Right now, RedPost is building slowly. While he has had several offers to set up large networks for paying customers, Eric prefers to take things slow, and use the RedPost/Goshen pilot program to work out the bugs first.
It will be interesting to see how fast this Hoosier company takes off once the brakes are let loose.