Sushi Profitable

Paul Graham is one of the people whose advice I always welcome, even though I don’t always agree with it. Most of the time, however, he is spot on.

This week he posted an entry called “Ramen Profitable“. Ramen profitable means a startup makes just enough to pay the founders’ living expenses.

There was a time in the life of OpenNMS when we were ramen profitable. Heck, when I first started out I paid myself solely on commission, which means I was profitable from Day One (and believe it or not, that first year I only spent $5000 out of savings to survive).

Paul writes:

Another advantage of ramen profitability is that it’s good for morale. You feel like you’re finally earning your keep. A company tends to feel rather theoretical when you first start it. It’s legally a company, but you feel like you’re lying when you call it one. When people start to pay you significant amounts, the company starts to feel real. And your own living expenses are the milestone you feel most, because at that point the future flips state. Now survival is the default, instead of dying.

I love that last line: survival is the default. It’s something I’ve been trying to explain about our business model (spend less than you earn) but I haven’t been as succinct. Profitability gives you options. Profitability, especially in open source, means you have the time you need to build your product and your community, and you can remain true to both.

But as Paul mentions in the footnote, ramen is one of the cheapest foods out there. It is one thing to survive and another to survive in comfort. So I’m going to call us “sushi profitable”.

While we don’t pay the highest salaries out there, we are able to pay good salaries. While we work on used office furniture, we can afford new laptops. And if any one of our employees wanted to go out for sushi, they could without hardship.

Those of us who work on OpenNMS every day realize it is something special, and so we are willing to sacrifice immediate financial gain in order to help the company grow faster. That doesn’t mean that we aren’t comfortable. I’m not sure what the next phase after “sushi profitable” will be (Mercedes profitable?) but I’ll let you know when we get there.

New York

I’m writing this from the Admiral’s Club lounge at LaGuardia. It is on Concourse D, but my flight is leaving out of Concourse C. Unlike other airports, there is no way between the two concourses without leaving and returning through security, so I’ll be visiting the x-ray machine for the third time on my way out.

Despite that quirk, I’ve had a fun time in New York. I came up to teach a three day class on OpenNMS for Lime Wire. It has been a good trip and if the storms hold off long enough for me to get home on time, it will have been a great trip.

Lime Wire is in the process of moving into new offices in Tribeca. They are amazingly decorated, as if Pottery Barn and Crate and Barrel had a love child. There are some issues, however, such as a problem with the elevator buttons that resulted in a post on Failblog.

Friday night after class I met a friend of mine from high school, and he was kind enough to take me to a restaurant called Corton. After figuring out that Broadway was not the same street as West Broadway, I was able to meet up with him and dine on some very fancy dishes (the type where each little morsel comes on its own oversized plate that matches the shape of the food). We ate, drank and caught up on each other’s lives since we’d last met in DC, about 10 years ago. It’s the occasional night like this that makes the travel bearable.

Saturday night the Lime Wire guys took me out to the Odeon. It was a lot of fun, although Stuart (the manager) was they only one who got some of my cultural references, since we are both about the same age and somewhat older than the rest of the team. I visit a lot of companies and I’ve come to be able to recognize certain vibes, and from what I can tell Lime Wire is a great place to work. Plus, they’ve been using OpenNMS for a long while so they are obviously well above average in intelligence, and as you can see, extremely good looking.

Just before I came up someone pointed me to the Techcrunch article on the “Lime Wire Pizza” fiasco, so I was eager to get the whole story. Unfortunately, while some of the guys were at the party, no one was near enough to give me an first hand account. In the beginning of the story I was definitely sympathetic to the Dovecote guys, but when I got to “One of the Dovecote guys grabbed a whole pizza and tried to run away with it” that vanished. When one decides to escalate things to the point of theft, you’re kind of signaling that anything goes. But I guess when you think it is okay to publish stolen documents from Twitter, the theft of a pizza is nothing.

Even though I was asked to teach on the weekend, I had fun (well, as long as I make it home on time). Plus, it gave me a lot of ideas for decorating the OpenNMS offices when the time comes.

Purists and Pragmatists and Zealots, Oh My!

I didn’t make it to OSCON this year (thanks for everyone who voted for us for the CCA, by the way, even though we lost out again to Firebird) and I am quietly thankful for it, because it seems like the conference kicked off a new round of hyperbole and hypocrisy from the fauxpen source crowd and I’m going to try to stay out of it (instead of any kind of rational discussion, this round seems even more full of ad hominem attacks).

I’ve been labeled both an open source purist and a zealot simply because of my assertion that the term “open source” is defined by the open source definition. And while no one calls me a pragmatist, only a pragmatist could have kept a company like OpenNMS going through good times and bad without investment.

Heck, I’m even pragmatic about open source – in the realm of enterprise network management nothing works better, but that doesn’t mean it works for everything.

But no matter how successful we are, someone will think we aren’t successful enough. Luckily, I haven’t spent much of my life worrying about what others think, and we have been so busy lately that I can easily lose myself in helping our customers and our community.

However, at the risk of boring my three readers, I wanted to share an epiphany I had at dinner Thursday night.

We were discussing open source and I reexamined why a number of commercial open source companies see so little contribution that they resort to calling their users “leeches” and free loaders.

It is just natural that in a gift economy like open source, those who give back in a substantial fashion will be few. I’m am always grateful for any positive contribution while having the expectation of none. OpenNMS enjoys a wide range of contributors, enough so that I would never feel the need to refer to our community as leeches. I was wondering what was so different about us from other companies.

The answer came to me straight from Dan Ariely’s fine book Predictably Irrational. In it he talks about “Social Norms” versus “Market Norms” with an example from a day care center in Isreal:

A few years ago, [Uri Gneezy of UC San Diego and Aldo Rustichini of the University of Minnesota] studied a day care center in Israel to determine whether imposing a fine on parents who arrived late to pick up their children was a useful deterrent. Uri and Aldo concluded that the fine didn’t work well, and in fact it had long-term negative effects. Why?

Before the fine was introduced, the teachers and parents had a social contract, with social norms about being late. Thus, if parents were late — as they occasionally were — they felt guilty about it — and their guilt compelled them to be more prompt in picking up their kids in the future. (In Israel, guilt seems to be an effective way to get compliance.)

But once the fine was imposed, the day care center had inadvertently replaced the social norms with market norms. Now that the parents were paying for their tardiness, they interpreted the situation in terms of market norms. In other words, since they were being fined, they could decide for themselves whether to be late or not, and they frequently chose to be late. Needless to say, this is not what the day care center intended.

Vibrant open source communities operate under social norms. I am often approached by people who say that they really love OpenNMS, but then they sheepishly admit that they don’t buy support or contribute in any other way. They tend to smile when I say that I’m cool with that – just finding our work useful makes my day and they’re probably not a good fit as a support client in the first place.

But the open core realm operates under market norms. If some restaurant is handing out free food samples, rarely does one feel guilty about taking some. In much the same way, when users see a company that sells commercial software, there is no obligation associated with taking the free stuff and being done with it.

So the problem of leeches is one of their own creation, and as research has shown, once you set the basis for interaction based on market norms, it is hard to move back. This may be one of the main reasons a least one such company seems to be changing its message away from open source.

Once again, I’m just thinking out loud, and in that vein let me state that I’m thankful OpenNMS still seems to be operating under social norms. I’ll work hard to keep it that way.

Open Source for America

It’s been a pretty busy and interesting week. OSCON is going on out in California, and David and Matt are there for OpenNMS. As it is the probably the premiere open source conference it seems important to attend, but when I went a couple of years ago I really didn’t enjoy it.

Part of the reason is that I am not a developer, and the conference is very developer-centric. The other part is that while I maintain an e-mail correspondence with a number of open source “superstars”, the vibe is all strange at OSCON. If I meet these people in any other situation or conference we’re cool, but at OSCON it is different. I don’t want to say they are standoffish, as that isn’t the case, it just seems that it is harder for me to just walk up to them and start talking.

I know I’m not making any sense, so I’ll move on.

Oh, a big “congrats” to Brian Aker and the other winners for their Google O’Reilly Open Source Award. It is well deserved and I’m a little jealous, sort of the same way I felt when Tobi Oetiker got his SAGE achievement award at LISA. The jealousy stems from the fact that I’d love to get awards like this, but it should never happen. Not because I don’t work hard, but OpenNMS is such a community driven project that there really isn’t a single person we can recognize as being responsible for OpenNMS. I’m just a cheerleader, and my reward is being able to watch such an incredible team of people take the field.

Another announcement made this week was the founding of Open Source for America. This is a lobbying group designed to promote free and open source software in the US government. Their first goal is stated:

Aligned with our commitment to the four principles, our goals are to help effect change in the U.S. Federal government policies and practices to allow the federal government to better utilize free and open source software;

I think this is a great idea, but I was seriously confused when I read the list of founding members, which include such companies as Oracle, most likely involved due to its purchase of Sun; Medsphere, which sued its founders out of the company for daring to open source their “open source” software, and Alfresco.

I find that last company’s involvement amusing, since their most vocal employee often rants on about how “open source” is not free software, yet they helped found an organization, with “open source” in its name, blatantly based on the four principals of free software. It comes across as a little hypocritical and self-serving.

However, quite a bit of the organization reads like a Who’s Who of free and open source software, and so I asked one of the advisors to help me explain the discrepancy. He replied:

.. the companies involved wanted the biggest tent possible. Also, there are no dues being charged, so there’s no reason for people to think twice about joining up. The belief of the parties putting this together … is that the Administration will not speak to individual vendors, but will greet an association in proportion to the size of its membership, so they are bulking up.

Makes sense.

I am one of those guys who always thinks twice about signing up for stuff, so I am going to wait awhile before getting involved (I am also surprised that they didn’t involve Mark Taylor of Sirius IT who has a lot of experience with promoting FLOSS in government for the EU).

Unfortunately, this “thinking twice” gets me labelled some sort of free software zealot, and I’m not invited to cool parties with lots of shrimp cocktail and free drinks. It did land me a free sushi lunch with Andrew Oliver, a board member of the Open Source Initiative.

We met yesterday in Chapel Hill and the one hour lunch turned into more like a four hour gabfest on free and open software (those that know me are probably not surprised).

One of the cool things he brought up, and which I had not considered, came up during a discussion of venture capital. VCs usually fund rather novel ideas (well, for certain values of “novel”). Perhaps the idea of an open source company has grown past that novelty stage and is more mainstream than we think. For example, no one would go to a VC firm if they wanted to open up a restaurant. They’d go to either the bank or to individual investors, most likely family and friends. Heck, that’s what we did with The OpenNMS Group. I think it would be an indication that open source has arrived if the idea of starting an open source company did not immediately begin with “get VC money”.

He also complained about our lack of marketing with respect to OpenNMS. I have often resisted doing any kind of formal marketing because it is hard to reconcile my core beliefs of transparency, openness and no bullshit with what usually passes for marketing. Yet it would be great to be able to communicate that OpenNMS is a real company with real customers and a long track record of delivering the highest quality management solutions, and not just a bunch of open source zealots hanging out in North Carolina.

So I was happy to find a company called Bold Interactive that does marketing but shares our ideals that clients are partners and not checkbooks, and that doing good, besides being the right thing to do, has positive financial benefits. We are just getting started on what will be our first ever formal marketing effort, and I expect the community to provide feedback and keep us honest.

In addition, Bold introduced us to a really talented public relations person named Margaret Gifford. She has an amazing amount of marketing experience coupled with the same attitude we look for in all of our partners (she resigned from a very powerful position due to quality of life issues) and we are happy to have her apply that experience to getting the word out about OpenNMS.

Well, if you’ve read this far you really should get a hobby, and I want to apologize for the rambling and newsy nature of this post.

One Million Miles

I travel a lot, and I tend to travel on American Airlines. Not that they are really any better or worse than the other airlines, but from Raleigh they are convenient and they tend to be competitive in price.

Last month I broke the million mile mark on my frequent flyer account.

Note that this was not “in seat” miles but the total of all miles from all promotions that I’ve logged with the airline.

The last time I checked the AAdvantage website didn’t have much on what happens at the million mile mark (or marks, I’ve seen some travelers with 3 and 4 million miles). So I thought I’d post the letter one gets when you hit this milestone.

The one really cool thing is that it appears I am “gold” (the lowest elite level) for life. I’ve gotten used to things like boarding early, so I appreciate that. Perhaps at two million miles you get to be lifetime Platinum.

I am simultaneously eager and scared to find out.