“Starting in the mid ’90s, a few brave pioneers like Benchmark
invested in an open alternative to proprietary software and made a
fortune. By the end of the decade, everyone wanted a piece of the
action. A second wave of VCs rushed in at ridiculous valuations and
got their clocks cleaned. In 1999 and 2000, over-capitalized,
over-valued open source companies burnt through hundreds of
millions of dollars. Shame on the dumb money that gives efficient
markets a bad name. Then, the bubble burst, and we entered nuclear
winter followed by the trauma of 9/11. Valuations plummeted to the
ground. Investors panicked and ran for the exits. Things hit bottom
when the vulture capitalists waited until the CEO of SuSE Linux was
in a cab on the way to file bankruptcy before agreeing to invest at
a valuation set at 1% of SuSE’s peak value in 2000.“In retrospect, the SuSE recap was the turning point…”