Linux Today Editor Paul Ferris caught up with Bruce Perens at
The Bazaar in New York during a party at FAO Schwartz. Bruce is one
of the founders of the Open Source Initiative and is well known for
being able to hit the eject button and leave projects, usually in a
Bruce has been more than just involved with Linux from a
publicity standpoint, his credentials loom large on their own,
having worked for several years for Pixar and on Debian GNU/Linux. He's a unique
individual technically as well as a warm person emotionally.
Linux Today: I finally caught up with
Open Source founder Bruce
Perens at a party in FAO Schwartz -- Everybody knows about this
place but me!
Bruce:The Greatest Toy Store in the World, Bar
None -- But the most expensive...
Linux Today: Clearly a free endorsement by
Bruce: Is this going to be audio?
Linux Today: No, it's going to be text on
our web page.
Bruce: See, I'm a banker now, I can't swear any
more! I have to be respectable.
Linux Today: OK.
Bruce: I can only swear when I'm golfing, for
example. But unfortunately, I don't know how to golf.
Linux Today: Bruce, you're into some really
cool stuff right now. Could you start at ground zero and tell us
what you're doing?
Bruce: OK, back in September or actually late
August I was approached by Linux Capital Group, saying "Would you
come be our president?" and the idea was to run an investment
company in the vein of Internet Capital Group and CMGI. And also
Safe-Guard Scientific is an example, where a company is not the
conventional capital firm, which is guys who are already rich want
to get obscenely richer. And so they have like ten or twenty or a
hundred million dollars and they re-invest it in more
Instead, what we are supposed to be doing is taking our capital
group public and then you the open source investor buy a share of
stock and that stock is re-invested by me in start-up Linux
companies. So this is a way for you to get in on the ground floor
of a start-up Linux company and for you to have somebody who's big
experience in open source goes back to like 1994, and also Ian
Murdock who goes back to 1993 when he started working on
We will be finding companies who we think are good, have
marketable prospects, invest your money for you and then eventually
those companies will go public or fall flat on their face -- one or
the other. And when they go public, you have the chance to make the
money that a VC makes rather than an investor.
I'll give an example here: Sequoia capital bought Red Hat at $3,
and they can now sell Red Hat at $300, because they got in many
months before the IPO. That was what you could buy Red Hat for at
that time. Now the first time a conventional investor was able to
buy RedHat was at $43. That investor could sell Red Hat at $300
they would have a 6 times profit, and that's quite a respectable
profit. But look at Sequoia, they had a hundred times profit, well
So, there is tremendous potential for profit in the venture
Linux Today: So, I have to ask you, will
anyone be able to buy this stock? Will it just be us.
Bruce: Once it's a public company, anyone who
can buy stock will be able to.
Linux Today: Next question then is what
happens if the Venture Capitalists pick up on what you are doing
and like buy your stock instead of for example VA Linux.
Bruce: OK, there is still some small chance
that Linux Capital Group could never go public for a number of
reasons: because it fails, because people give us hundreds of
millions of dollars and we simply don't need to go public, etc.
If that happens I will not have realized my goal of opening the
Venture Capitalist business in a sort of open-sourcey way.
Linux Today: Wow! So you're not just
changing software, you're changing the financial world!
Bruce: I'm attempting to Open Source venture
capital. In other words, I'm trying to let people get in earlier
than they would otherwise get in, where the only people who are
allowed to get in that early right now can invest a minimum of one
hundred thousand dollars and have a two hundred thousand dollar a
year income so that if the business fails it's not going to blow
That is the qualified investor that I actually must solicit now,
but when LCG goes public it will have what we call portfolio
companies, companies that we own that are not yet public
themselves. When you buy a share of LCG stock you will get some
ownership of those companies, then when those companies go public
we spin them off the way any corporation does a spin-off, and you
the LCG stock holder gets a share of the stock of the public
company too and you get to keep your LCG stock. We get some of the
stock also, we sell that stock eventually and we use that to
re-charge the process that gives us more money to found more
companies that eventually either go public or fail.
So the idea is that if you buy this stock, and if we work it
right, you every few months or few years get stock in another
public company as we spin it off. You can hold onto that or sell
it, that's your choice, but the idea is that you're getting in
earlier than you would otherwise. You can now do this in the
Internet business sector with Internet Capital Group. You can look
up their prospectus and things and see how they're doing and
extrapolate. We're going to be kind of like that, but, of course,
we're in Linux where you have to do more than just stick an "e" on
the beginning and a .com at end to be marketable.
Linux Today:Basically you're lowering the
barriers to investment in a similar way that Linux lowers the
barriers of entry to the people who would like to play with an
Bruce: I guess I'm a populist at heart. I do
all of these populist things and Linux is one of them. And then
there's this whole HAM radio thing where I'm sort of positioning it
as a way for people to learn analog electronics and technology. See
Nocode.org and that will tell you something about what I'm trying
to do with HAM radio for peoples' education, and also see my
personal web site.
So essentially one of the things that makes me tick is
empowering the little guy. Why should you be a big corporation to
make technology? Why should you be a big corporation to invest in
something? Why can't the regular guy have a big part in the
development of all these cool things in our future instead of
someone having to go to work for some tremendous corporation just
to do cool science and to do investment, etc.?
Linux Today:If I'm like an open source
developer, and I'm getting ready to do some investment, or I need
venture capital, why would I come to you?
Bruce: The kind of person I'm actually looking
for is someone who doesn't really have a business yet. They have a
great idea, and they are a rocket scientist or someone reasonably
skilled in software, open source, etc.
Linux Today: They should be able to do
something more than say, Visual Basic, and make some dialog boxes
Bruce: Yeah, for example, one of the guys I'm
talking with is talking about an open source approach to medical
records where obviously the data will not be open source but the
ways of explaining it, exchanging it, rather will be.
People are talking about various technologies that have nothing
to do with software but where the concept of open source is
interesting because you use computers for everything these days. So
people approach me with an idea and we decide whether to fund them
or not by having the people that I have funded -- the presidents of
other companies -- look at their ideas, other technical people who
I think are good, our financial people. And if they like the idea,
we might make them an offer. What happens is that they get some
amount of stock in their own company and they get to be president
or Chief Technical Officer, or if they're really bad people
Linux Today: [At this point I broke into
hysterical laughter, because my degree is in Engineering -- LT ed.]
So, what are you trying to say Bruce?
Bruce: I'm trying to say that not everybody can
be a President or a CTO because there's a large amount of public
Linux Today: I understand --
Bruce: So you can be someone who has a lot of
stock in your company, even if you're the kind of person that hates
people a lot. But you should understand that if you hate people a
lot you're not the kind of person that should be the president.
So we start up your company, we give you capital, we do all the
things for you that are boring. That are not your technical dreams.
So we free you to pursue your technical dreams. We pay you a salary
so your family and your rent is taken care of. We provide your
personnel department, your chief financial officer, your marketing.
It's a nasty word, but you still need a little of it. In this kind
of organization, however, engineering drives marketing and not the
other way around.
Just all of the things that a business needs to function that
most of these open source people with ideas might not know a thing
about. We have some very good financial people who provide that
side of the guidance while I provide technical mentoring, helping
So essentially, this is the dream job for me because if you look
at my career you may notice that I'm actually better at starting
things and then having other people finish them. I like the idea of
sort of advising these people and helping one business get together
with another and in general doing what I think are the really fun
parts about the business. Then there is somebody who programs --
who loves to program every day.
But unfortunately you know I haven't gotten to write much
software lately. I'm going to take some time to write some, just so
I don't become some sort of non-programmer. But I make deals. I
spent lunch time on Madison Avenue talking about 10's of millions
of dollars in investments.
This is just such a buzz because I've been a Unix systems
programmer since 1981. I went to communication arts college so I
also have a broadcasting background. And now I'm getting to learn
this entire new career and I never in a thousand years would have
imagined that consequences in the OS community would make me into a
All of the most important things about disciplines are about
where they overlap. Like computers for computers for computers sake
are not nearly as fun as taking a computer and doing something
useful with it. And to do this in general you need to know how to
program the computer and some other field, like accounting or
painting images or something like that.
So here I am at the interface between software and finance and I
really like where they meet. As I liked it at Pixar for 12 years
being where software met art.
Linux Today: I think you're doing a
terrific job. And maybe some more people will be following in your
footsteps. How do you feel about that?
Bruce: That's why I'm there. I want to mentor
people to be company presidents and then spin them off. When their
companies go public, they are on their own. And I want to have them
be communities of companies where they do business together and
cooperate -- it's like the open source community made of
It's being a whole lot of fun. I think one of the nicest things
for me is like a year ago people didn't know how to get paid to do
what they love. Now I think there are so many jobs for open source
hackers, that we're all having opportunities to be paid to produce
open source software. I'm glad of that and I think there's going to
be a lot of good open source software coming out of the things that
these companies are doing.
Linux Today: How about companies that want
to develop for the BSD license? Is your capitalist firm only aimed
at just a certain type of license, or is it everybody?
Bruce: The company's name is Linux Capital
Group, because it makes it easier for the investor to understand
what they are investing in. However, BSD is free software/open
source, at least the new BSD license without the nasty advertising
clause. Richard Stallman accepts it as a free software license and
it's compliant with the open source definition. And Free Software
and Open Source are really the same thing. So BSD really should be
part of the fold.
Eric Raymond said at the conference that he things BSD should be
more successful because a mono-culture is not healthy and if it's
all Linux, you know, something happens to Linux and then we've got
no system. If we've got Linux and BSD, that's nicer.
As far as I can tell, almost everything that's being written for
the BSD system is also being put on Linux. So I think that an
investment in something that's BSD oriented is not out of the
Linux Today: Once Linux gets in a high
spot, it pretty much opens the door for anything else, because
we'll force standards to be open and well defined and documented. I
myself am not advocating proprietary products, but if Linux
succeeds, something like proprietary BeOS can be a possibility. But
it doesn't stand a chance without Linux opening the door.
Bruce: I'm not sure I can help you there. When
you're making a new operating system at the same time that someone
else is making a really good, really stable, free operating system,
it's kind of hard. I'd like to help the BSD and Linux people more.
But open systems are really only a part of what we have now,
because there are a lot of open protocols that even have patents
embedded in them, and there are no open software implementations,
etc. And so we really want a world of software that you can really
re-distribute, modify, etc., to solve your own problems.
Linux Today: How soon will this be
Bruce: It's LinuxVC.com. We have agreed to fund
our first company, which is Ian Murdock's Progeny Linux Systems and
then we're talking with some other ones and we have an escrow
account open and are collecting investments from qualified
investors which unfortunately is not yet everyone. But when I can
collect them from everyone, I'm sure you'll know. So it's on-line,
it's going and we're off and running.
Linux Today: Do you have anything else to
Bruce: I'm really happy to be at this
conference and see Richard Stallman here and hear people talking
about the virtues of Free Software and you know I use the words
Open Source a lot, but I'm really talking about Free Software. It's
nice to hear people say it here.
We coined the words "Open Source" in part because we thought the
words Free Software would scare business people away. You can't
scare business people away any more -- the smell of money is too
So, I think we can call it Free Software and we'll still get the
Linux Today: So back to focusing on the
freedom and those aspects? Help make people understand that that's
why we are here? Why we are successful, is because of the
Bruce: Why we're successful is because we
decided to break the paradigm where people were prisoners of their
software! You know it's so funny, until people like Richard
Stallman started saying that, no one even realized that
they were prisoners to their software. It's like having really bad
fitting shoes and not knowing it. And then one day you get really
good sneakers and you want to run around. There's this exhilarating
feeling that people have when they finally understand this. I'm
seeing it all around me here.
Linux Today: You definitely can run with
Linux and run fast! That is something exhilarating and it's an
incredible feeling. Basically, all of this has been an incredible
work on your part and I want to thank you myself
Bruce: Of course, I could not do this without
people that promote this. So I'm appreciative of the work of Linux
Today and your personal effort.
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